The Future Of Web Advertising Is Death
Take a look at what happened to the revenue stream of newspapers, magazines, and television over the last few years, and then consider how the majority of non-personal, non-commercial websites manage to keep their heads above water. It’s easy to imagine that the same incomeocalypse could apply to the digital version of the same industries: the death of advertising.
All of the industries that were dependent upon entrenched behaviors and income acted surprised when technology changed their entire business model, despite having known for years what was coming. Even worse was their childish, whining reaction to the latest innovations, rather than adopting them, turning a potential revolution into their downfall.
Currently, most of the major websites, such as Facebook, Hulu, and True/Slant, depend upon advertising, in one form or another, to exist as a free service to its users. As television continues to decline, it’s fair to assume that video/media delivery outlets will see a rise in advertising revenue, just as other sites can expect greater sums for their increased popularity. This, however, is a fairy tale not made to last.
It seems inevitable that a newer, more popular form of technology will arise to overtake the Internet in the semi-near future, even if it’s just an evolved form of itself, and with it will come a different profit model. As difficult as it may be to accept, services cannot continue to be free of charge if the advertising drops off, and it’s far better to consider this problem now, in order to plan for it, than it is to feign surprise in the future. Whether this calls for a pay-for-premium, subscription, or hybrid model would depend on the service and its particulars, but the message is clear.
To assume that advertising will support the financial interests of all current and future web-based enterprises is naive at best, considering the similar situation Old Media found themselves in. Every day seems laden with reports of lower subscriber numbers, less corporate profits, and the general sense of a collapsing industry as the world migrates to a more digital medium. This digital medium, however, is not exempt from the rules of both reality and business.
Just like the print publication, music, and publishing industries, the Internet has fair warning – the question is whether or not those with the power to act will do so.
Kyle can be found on his blog, on Facebook, via email, or on Twitter.
Post Your Comment
You must be logged in to post a comment
T/S Members
Log in with your True/Slant account.
[...] piece adheres to the Code of Ethics subscribe to Self posts: rss – email New column at Technotainment Revelations on True/Slant: Take a look at what happened to the revenue stream of newspapers, magazines, and television over [...]
Here is hoping that sites like Facebook and TrueSlant don’t start charging, right now a lot of us just have nothing to spare, but business is business as you say.
Well, it wouldn’t be immediate – it would happen in 2011 or later, in all likelihood.
That being said, it seems probable that places like Facebook and Hulu would move to a “pay-for-premium” model, where you get more content for the money. For example, if you were to pay Hulu, you might get access to the entire archives of shows and movies, where the free users (like now) often only get the most recent 5 episodes of a show and whatever movies the studios feel like sharing.
See these posts if you want to look into it more:
http://trueslant.com/kylebrady/2010/01/07/netflixs-dvd-agreement-sets-bad-precedent/
http://trueslant.com/kylebrady/2009/12/27/tech-and-entertainment-predictions-for-2010/
–Kyle
In response to another comment. See in context »i agree that premium options may reduce free availability of content. however,there is no way it will change the situation much. any site with free content via advertisers will dominate just as freeware still dominates downloads. i don’t need anymore from most sites but their basic service and doubt i’m the exception. sites and advertisers will still will still see this bottom line.
True, but it will probably happen, if ever, all at the same time – much as the newspapers are all putting up online paywalls within months of each other as we speak.
–Kyle
In response to another comment. See in context »[...] upon advertising may not work as well, in the longrun, as Twitter and others may believe – if it works at all. For the moment, Starbucks and others may find promoted and injected Tweets appealing to [...]