The I-Way Is No Road to Riches

John C. Dvorak

Okay, I admit it: I have a conflict of interest. I want to make money, and I'm being stifled because a system that was promised now looks as if it may never materialize. My conflict of interest involves the notion of writers getting paid by the "hit" on the World Wide Web--not, as is the case with print publications, by the word or the column. This is where the conflict of interest comes in. Being a competitive guy, I'd love to go out there, word processor in hand, and start slinging mud. The more provocative the column, the more hits the site would receive and the more money I'd make. Wouldn't that be cool?

The trouble is that this model requires some sort of accepted cybercash system, a development that has so far eluded the Web and may never happen if the Internet continues on its current course. People have come to expect something for nothing on the Web, and publishers of online content have turned to advertising rather than imposing user fees. In other words, the only difference between a typical magazine on newsstands and the Web magazine of the future will be the delivery mechanism. That stinks, and not just because I won't be getting rich.

With that personal gripe out of the way, let's look at the issues surrounding the idea of making money on the Web. There are three possibilities: (1) Use the magazine model and sell loads of advertising, (2) charge subscriptions, and (3) charge a cybercash fee for viewing pages. There is also potential for a combination of the three, but nobody cares about that.

The advertising model requires new methods for auditing readers. With the right technology, the Web could improve on the print magazine model. Print magazines usually charge for advertising based on circulation, with certain premiums for preferred placement (facing a Dvorak column, for example). Web publishers could vary rates based on the actual number of people who visit a particular Web site. What exactly is the best way to gauge this traffic is still a matter of debate, but you can bet it's being worked on. In addition, there is the potential for targeting ads, based on your personal profile. You would receive only advertising you might actually be interested in. This would also benefit consumers by allowing smaller, specialty companies to play in the big, mass-market sandbox. The downside is a perceived loss of privacy.

The subscription model, on the other hand, is probably the simplest, but it requires a specialized product with information that people will pay for. I believe the typical Web version of a magazine will probably not attract subscriptions unless it's some weird porn thing. Web magazines are ethereal and will probably always be free. Real magazines still have to be printed, and this costs money, which is usually offset by subscriptions. While subscription models with flat monthly charges always sound great, they assume like an all-you-can-eat restaurant that you're not really going to get your money's worth. If you do get your money's worth, they will raise the price. Online services that will thrive on subscriptions will be mostly large, comprehensive commercial services such as AOL or products such as Stanford University's Electronic Library, which helps researchers and students sift through heaps of information.

But the pay-as-you-go cybercash model might also work if the price is right. For example, let's say you pay $3 for a 300-page computer magazine. Would you be willing to pay 1 cent per page of that magazine if you knew you would be interested in only 10 to 20 pages at most? In other words, you would pay only for what you want. The problem with the cybercash model is that it has no attractive hook. It lacks both the lure of free e-zines and the appeal of the all-you-can-eat subscription-based services.

This is bad news for people like me who were hoping to cash in on cybercash. When I first heard the concept of penny-a-hit fees on the Web, I thought it was a cool idea and technologically feasible. Now, I realize I must have been temporarily dazed and confused. Cybercash may turn out to be nothing more than a means of collecting subscription fees and paying for T-shirts and CDs purchased online. Unless some marketing genius comes along soon to sell it to the world, I'm afraid that the Web of the future will be cluttered with advertising much like the billboards that blight the landscape. So much for early retirement.

Cashing Out: Cybercash lacks the lure of both free e-zines and all-you-can-eat subscription-based services.

Copyright (c) 1996 Ziff-Davis Publishing Company