The Whole Web Pays for Google and Facebook to Be Free

https://www.bloomberg.com/opinion/articles/2021-03-03/pay-for-twitter-super-follows-you-can-thank-google-and-facebook

by chewz • 5 years ago

240 128 5 years ago

docdeek2• 5 years ago

The same applies to Twitter and Substack, where signing up to just four writers’ output at $5 a month each is already more than the cost of a $17 New York Times subscription, which gives you a greater breadth of coverage.

Imagine I really like hamburgers. I might choose to $5 each week on a burger and be happy with the quality of a burger made by people who only make burgers.

The alternative is spending $4 a week so I could access a buffet with lower quality burgers (after all, it’s not their speciality) but also hot dogs, sandwiches, poke bowls and sushi.

Trying to convince me that the buffet is a better deal just because I have access to a wider range of foods when all I really want is a burger is not a winning argument for me.

rad_gruchalski• 5 years ago

You can't survive on a burger a week and you will eat other food too between your $5 burgers. So maybe it's worth spending the $4 / week covering "most of the other food" you gotta eat anyway.

docdeek2• 5 years ago

It’s not an exact analogy, that’s for sure.

Maybe I could save it by asking where am I likely to get a better quality burger: the place that charges me $5 a week just for burgers, or the one that charges me only $4 a week AND I get a whole lot of other stuff I don’t like but could still consume

nxpnsv• 5 years ago

Depends on the size of the burger I guess :D

HPsquared• 5 years ago

Paying for news has become something of a "luxury" product.

In these conditions, quality and satisfaction of a niche is more important than quantity (though quantity has a quality of its own)

jrumbut• 5 years ago

And, to strain the metaphor further, most of the $5 burger makers are just repackaging the $4 burgers since the $4 burger makers are the ones who gather the ingredients.

yerwhat01010• 5 years ago

Back in 2006, the New York Times charged readers an average of $534 for a subscription, while it brought in a further $1,064 per subscriber from ads.

Wait, what? Is this the yearly figure? A subscription to the NYT cost >$500/year? Who the hell pays that much for a newspaper?

tschwimmer• 5 years ago

It used to be that print newspaper subscriptions were quite expensive. Now that news is so heavily devalued subscriptions are a lot cheaper but even in the early 2000s a premium daily newspaper subscription could easily be $50 a month.

batiudrami• 5 years ago

$1.50 a day? It’s about what you’d spend on a physical newspaper.

CaptArmchair• 5 years ago

Yes, those are yearly figures for an all-in subscription (no paywalls on their site, daily paper, weekend edition, access to all apps). And they are in range of what you'd expect. I just checked the current subscription price for the NYT. Where I live, it would set me back EUR 715 yearly. I compared that to one of the big newspapers in my country, a similar all-in would cost me EUR 480 (that's USD 580) yearly.

You'd think that's expensive, until you start to dig into the economics of running a modern newspaper. The operational side is massive and complex. There's the newsfloor (NYT employed 1.300 staff writers in 2016), digital infrastructure to maintain and evolve and logistics for actually printing and distributing of paper, and so on and so on.

s_dev• 5 years ago

I pay €2 a week for a digital NYT subscription.

chrisseaton• 5 years ago

A subscription to the NYT cost >$500/year? Who the hell pays that much for a newspaper?

Eh? That's less than $1.50 a day?

That's how much it used to cost to get it delivered to your door daily.

kmlx• 5 years ago

I pay £33 per month for the digital version of the Financial Times: https://www.ft.com/products

If you're into that niche, it's great value for money. But even with those prices, FT still runs ads on their pages.

Unfortunately in today's world, where people get their news "for free" from fb.com or twitter.com or news.google.com, it seems like a huge price to pay.

blablabla123• 5 years ago

But it's a daily Newspaper, that's a bit less than 1.50$ per day for a lot of written paper. (Some online magazines charge that per article...) I would go for that if I just read daily news from one source. Instead I have a varying number of subscriptions, nowadays mostly digital.

slightwinder• 5 years ago

Printing Paper and transporting it every day to you is costly. And back then, content was generally more expensive, because there was no elaborated online-crowd who delivered you half of your content for free. Today you have wikipedia, reddit, google, twitter, e-mail and many more which allow you to research many stuff from home. Back in the days you were forced to go around physically, talk to people face to face, visit libraries, maintain your own library. That was far more expensive than what you can do today.

At the same time, because of the high quality free knowledge we have today, you can externalize knowledge and let people research it themself if they wanne know, and get away with lower quality of writing, meaning you can do it faster and need less people to pay. Meaning you can offer a lower price, because it's neccessary to compete in a world of massivly free information.

Barrin92• 5 years ago

It's questionable whether a lot of substack writers give you more quality access than the entire newsroom at the NYT, WSJ, or similar newspapers, where a lot of substack writers still contribute.

I think the high fees on substack, like on patreon have another reason. It creates a weird parasocial relationship between the creator and the reader that gives the reader the feeling that they have contributed to a cause, or has some personal relationship with the author they support, and so on.

In that way it seems to me more similar to twitch streamers who often extract huge sums of money from their donors, when objectively the viewer gets more content out of a 10$ streaming subscription.

cosmodisk• 5 years ago

It also depends on the subject. For instance, there's an ex journalist in my country pulling in €20K/month on Patreon by making videos on corruption in the country. It resonates well with the audience which doesn't seem to be able to get similar content from the newspapers/TV channels. There are some random writings on Substack,but there are also those that aren't covered much in more popular media, which leaves a gap and some writers are happy to fill it.

moron4hire• 5 years ago

One of the big things that strikes me about these journalists who leave their papers or start a side gig on Substack is the marked decrease in the quality of their writing. The role of the copy-editor is extremely important.

vergessenmir• 5 years ago

It is also questionable whether the newsroom @ NYT, WSJ give much quality to begin with.

That being said, there is value depending on what topics you're interested in. The value of NYT for me is the Arts & culture section. But I'd happily pay for Matt Stoller's content,Taibbi, Siskin or Gwern if he had one.

There is risk that's been highlighted of creating bubbles but seeing how news media has reinvented itself over the last decade, I can't see how that can be avoided, except this bubble is self-curated and more specific, which one can argue is better.

[Edit: clarification on last line]

gregshap• 5 years ago

I would pay more for a subset of the current NYT. The website is full of imo prominently displayed clickbait that I consider negative value.

I'm a previous subscriber of NYT and Bloomberg online. I've kept my WSJ subscription partly because its easier to consume only the useful content.

I also subscribe to a couple of email lists where the author absolutely provides value in their niche over and above the larger newsrooms. They are usually great complements to each other and it tells you something that the journalists are also reading the newsletters.

ebiester• 5 years ago

They get different content.

Nowhere on that streaming content is someone explaining the intricacies of speedrunning The Legend Of Zelda (as a simple example.) It turns out there may only be a couple thousand people in the world really that interested in that content, and only a few hundred willing to pay for it. The economy of scale thee changes the calculus of how much you are willing to pay.

bluefirebrand• 5 years ago

It creates a weird parasocial relationship between the creator and the reader

This is honestly a troubling trend in my opinion. These parasocial relationship are sort of emergent based on these new creator->fan direct channels that are popping up.

I'm concerned that now these platforms are going to lean into this even more, encouraging this sort of thing instead of it just happening organically.

These relationships are really not healthy for people. Not for the creator (even though they profit from it) and absolutely not for the fans who are likely missing out on forming real relationships with real people in favor of this parasocial thing that will ultimately not be fulfilling (and expensive) for them.

dgudkov2• 5 years ago

Substack bundling is inevitable as subscription-based blogging matures. It's just a matter of time until we start seeing offers "Subscribe to top authors A, B, and C, for only $X/mo".

rchaud5• 5 years ago

Medium.com all over again.

ling32• 5 years ago

The problem with buying the NYT subscription is that you still get the ads. If not overtly, then they are still buried in the content in some sponsored form or another, because this is a large part of how the newspaper makes money. And the newspaper has other agendas too - political, commercial, etc. The Substack model, on the other hand (at least so far) lets you cut out most of the crap - the signal to noise ratio is just so much higher.

fakedang4• 5 years ago

And yet Substack was featured on HN top for running ads in their email newsletters....

rchaud5• 5 years ago

Newspapers have some level of editorial oversight, governance and fact-checking. Substack writers don't offer any of that. I understand that that's part of the appeal, but I wouldn't go as far as to say that Substack writers don't have their own agenda or biases.

kcartlidge• 5 years ago

The problem with buying the NYT subscription is that you still get the ads

It is annoying when a paid subscription doesn't eliminate ads.

From their perspective if you bought a physical edition you'd still get the ads so there's no difference. And I guess by showing a willingness to pay and the presence of a disposable income, you may be proving yourself to be of more value to the advertisers - paying makes you more of a target not less (however unfairly).

bollorior5• 5 years ago

Like the music industry a decade or so ago, the news industry is now in a position where, rather than try and compete, they are going to blame their customers and their competitors for their own failings, and try and secure a special status whereby they get paid in perpetuity for doing nothing because of their supposed great importance to society.

karatinversion• 5 years ago

This varies a lot - legacy media, sure. But the New York Times is doing extremely well!

fwn• 5 years ago

They argue that the centralization of advertising forces almost all companies to offer paid services and that those services lead to the overall online experience being more expensive.

They conclude that "we should recognize the trade we’ve made from ad-subsidized media to ad-subsidized search and social networking", which I guess is a well-intended statement but somewhat obvious, right?

Hacker News threads are filled with users arguing that they gladly pay a lot just to avoid advertising.

Their last sentence

Perhaps now we can forge a better understanding of the value of content. It costs money to produce, so it should also cost money to consume.

I think is important, but maybe not for their reasons. Current paid services are sometimes very overpriced, which is partly caused by the lack of easy and scalable micro-transactions and a missing understanding of what a specific service might be worth. On the other hand there are some great services that get underused because users don't think the up-front cost are justified.

The turn to subscriptions that we see in random tiny auxiliary applications is a great example of that. The developers of a small CBT-App I used for a bit thought they were worth 8 euro a month. They tried it a few months and then gave up, largely because they apparently failed to find a shared understanding of their value with their users.

sammorrowdrums2• 5 years ago

Incidentally I started paying $5/ month each to two micropayment platforms. The first Coil[1] uses Interledger micropayments protocol, which is cool because it is easy to both monetise your content, and is decentralized in terms of payment providers and receivers. I get payed into an uphold wallet, in Fiat currency. It pays out based on time on page mostly and has Imgur, Newgrounds and Twitch using it, and lots of blogs. Downside is for mobile where you can't run browser plugins you have to use their custom FF fork browser Puma.

The second one Scroll[2] is a centralised one. That has bigger names attached and removes ads from things like The Atlantic and Bloomberg. It shows you a breakdown of where your monthly fee is split.

I love not receiving ads, and I hope that this tech pans out, but I am only doing it as an experiment so far. Personally I would prefer Coil and its underlying protocol to succeed. But it is highly possible these all fail. At least I am avoiding ads, while still funding content. It shows promise.

- [1] https://coil.com/

- [2] https://scroll.com/

sammorrowdrums2• 5 years ago

I've written more about it here: https://sammorrowdrums.com/going-ad-free-with-micropayments

yoz-y• 5 years ago

Hacker News threads are filled with users arguing that they gladly pay a lot just to avoid advertising.

It is also filled with comments gist of which is “paywalled, didn’t read”.

I think both models have their strengths and ultimately are not meant for the same audiences. Which is also why mixing the two in the same product is tricky.

Nextgrid4• 5 years ago

Paying a subscription for a single article is not worth it, and that's purely on monetary cost and not even accounting for the time it takes to fill the subscription form and then to cancel (and some newspapers make it extremely difficult to cancel).

If there was a universal system where people could pay ~1$ in one click without having to fill in a form or provide any personal data (to reduce the risk of spam), I'm sure most people would happily pay.

On the other hand, for a single product that you use significantly (like a social network) it makes sense to pay a subscription as opposed to having your time, attention and privacy compromised by ads.

input_sh2• 5 years ago

I'm happy to pay for subscriptions on sites I know bring value to me over time.

I'd never want to start/stop a subscription for a single article I randomly come across, and I have never stumbled upon a link that allows me to pay a buck or two to access this specific article I clicked on without starting a long term commitment with a site I've never heard of before.

bsder• 5 years ago

It is also filled with comments gist of which is “paywalled, didn’t read”.

I object mostly due to "free for me(FAANGS) but not for thee.

Said article is available to the Googlebot or to Facebook but not normal mortals.

If you want to be behind a wall, fine, be behind the wall--that is your prerogative. But the problem is that these articles clutter up my search results and I can't remove them.

bollorior5• 5 years ago

I mean, you've just outlined the way that newspapers' business model is delusional and broken. Lots of people are prepared to pay them for something they make, but they have decided that they're only prepared to accept money in a specific way and on specific terms. In fact, most paywalls assume that that specific news outlet is the most important one in your life. None of them are prepared to offer you a plan based on the more realistic scenario that you occasionally want to read something of theirs of particular interest, but don't want their take on every story, nor their particular curation of what to read on a given day.

dividedbyzero2• 5 years ago

Hacker News threads are filled with users arguing that they gladly pay a lot just to avoid advertising.

In my experience, quite a few people say such things elsewhere as well, but if you actually give them the opportunity to do so (even if it's not "a lot", but actually a pretty small fee), such offers tend to perform badly, even among the people who initially requested such a tier, unless ads are very, very intrusive (Youtube of late might be such a case) or it's bundled with other, actually useful functionality, more content etc., or rolled out as an increase of existing pricing instead of a separate offer people have to actively pick (risky in itself).

People in general appear to be much more price-conscious when it comes to such things than they themselves seem to realize.

nindalf• 5 years ago

Yeah, I'm that guy. I would prefer not to see ads and claim that I would pay for the privilege. Ads on YouTube didn't used to bother me but as they ramped up the number of ads on each video I couldn't take it anymore ... until I saw the price of the Youtube Premium subscription. I balked at paying so much for the "minor inconvenience" of seeing 5 ads with each video. I figured I'd just watch less video instead.

Side note, Youtube Premium includes music that I wouldn't have used, so maybe the cost of the service makes sense for people who use that.

skinkestek• 5 years ago

In my experience, quite a few people say such things elsewhere as well, but if you actually give them the opportunity to do so (even if it's not "a lot", but actually a pretty small fee), such offers tend to perform badly, even among the people who initially requested such a tier,

I used Blende and was ready to spend quite a bit more on it, but they changed their rules and also had do little relevant content that at some point I gave up.

Recently found out one of the linux magazines sell digital articles as well as full digital so I will be probably be spending some money there, both for usefulness, entertainment (yep) and to support a good cause.

orange_tee• 5 years ago

It's probably psychology. For example, myself quite frugal, I would probably not pay explicitly to remove ads. But if you raised my internet subscription by $1.50/month, with the same intent, I wouldn't bat an eyelid.

It's all about putting the price in context.

GekkePrutser• 5 years ago

Hacker News threads are filled with users arguing that they gladly pay a lot just to avoid advertising.

True, and I did before. I had a subscription to Ars Technica and a few other sites like Tweakers in the Netherlands (a big local tech site).

But, what I found lately was that these tech platforms were alienating me. They're trying to reach a wider audience and as such are delivering much less of interest to me. Much less 'deep dives' than before and more 'phoned in' articles and press release copy/pastes. And in the case of Tweakers are still delivering trackers like Google Analytics and Scorecard Research even to paid subscribers. Both sites also changing their design to be more visual and thus reducing content on the screen, which forces even more scrolling to see everything.

So I actually dropped my subscriptions. I still have the lowest tier with Tweakers but they're dropping that soon so I won't renew. I still adblock anyway because I don't want to be tracked (and yes I know it's not fully effective).

It just feels like every site wants to grow too big and widen their audience. They're no longer happy with being a small niche outfit, which waters down their value to me.

I notice this especially because of Hacker News. Because it's still a niche site. Every day I find a few 'pearls' here that I don't see anywhere else. Whereas the other sites are forcing me to dredge through crap I'm not interested in with less and less interesting pieces in between.

aahortwwy• 5 years ago

It costs money to produce, so it should also cost money to consume.

An awfully strange perspective from a business-oriented news organization.

readflaggedcomm3• 5 years ago

No, not all my "media" was subsidized by ads before the internet. The author also fails to support the title, other than to weakly imply that somehow excluding ads on Netlifx has something to do with increased ad revenue on Facebook.

mrweasel• 5 years ago

Sports was the first think that came to mind when reading the article. True, previously TV based ads where worth more, and could help pay for licensing right, but those licensing fees as also balloned and consumers have to pay more directly.

Sports is one area of media that will truly be disrupted as we’re already pushing the limit of what people will pay and advertising is no longer able to pay the difference.

dec0dedab0de• 5 years ago

Especially ufc, I thought the only reason ppv could be so expensive was because people were having parties to cover it. I can't believe so many people paid so much during the pandemic.

anon983563• 5 years ago

I think you have your cause and effect the wrong way around there. The argument put forward is that Netflix is forced to use a subscription model because Facebook and Google have almost complete control of the advertising market.

In the specific case of Netlfix this probably isn't true as their business model is an online version of a business that already charged a subscription (cable TV).

However in businesses that traditionally relied on advertising e.g. the New York Times as mentioned in the article, the transition to the internet is leading to more upfront charging i.e. Paywalls because they aren't getting the ad revenue required to offer their services for free.

My personal take from the article isn't that all content use to be supported by ads (although I would suggest that a lot more of it was than most people realise). The issue is that the near duopoly Facebook and Google have on web advertising, mean those producing the content can no longer rely on advertising to fund themselves.

As a result we are seeing more and more paywalls being put up to fund these businesses. The potential end result of this is that finding content will continue to be free and probably even get easier. Finding content you can consume for free however, is likely to get a lot tougher.

fakedang4• 5 years ago

Just a question, what's stopping NYT from using their own native ad experience embedded into their web page instead of relying on Google and Facebook? It's not like building an onsite tracking ad is secret stuff, is it? Rather, if ads are going to be better than those on Google and Facebook, they could charge a premium simply for eyeballs right?

readflaggedcomm3• 5 years ago

Netflix's business is an online version of their old business, which was a mail-in version of Blockbuster.

No ads were involved in take-home videos, that I recall, other than late attempts at unskippable promos by the studios who released the movies themselves (that was after I gave up renting videos).

I don't see any causal relationship at all.

mattl• 5 years ago

Other than PBS/BBC, what other media isn't subsidized by ads?

readflaggedcomm3• 5 years ago

If you mean broadcast media, there have always been independent streams and feeds supported by listeners and hobbyists. There are even more since the internet began.

But I took "media" to mean something more broad, including recordings, printed literature, and performances, which traditionally were mostly ad-free (excluding periodicals).

htk• 5 years ago

Misleading title and argumentation. False Cause fallacy being used to attribute paywalls to Google and Facebook.

h0nd4• 5 years ago

News organizations, for example, didn’t charge readers, in the misguided hope that more eyeballs on their stories would bring in more revenue from the banner ads they displayed.

Which part of this is misguided? That is exactly how it works. The more ads they can show, the more they are paid.

drdec• 5 years ago

I believe the author is saying that the misguided part was the idea that they would get more revenue from banner ads than they would through subscriptions.

h0nd4• 5 years ago

Well, that is a different statement than what he is saying.

bollorior5• 5 years ago

Newspapers made a huge strategic error in how they approached advertising, which ultimately resulted in much of their value being essentially given away to Google.

It used to be the case that much of (for example) the New York Times' advertising value came not just from the number of eyeballs, but from the specific nature of those eyeballs. Being able to target a specific category of people who read the NYT (they can afford the paper, they are likely to live in New York, they know long words, they have a specific worldview, etc) is incredibly valuable to advertisers. Market segmentation by publication is very powerful - even knowing that a viewer doesn't have much money, or hates buying things, or is cynical about advertising is more valuable than not knowing anything. It's the reason that so many niche magazines exist. Advertising to someone who cares about a very specific hobby is worth a lot. It's also the reason that most printed publications aren't free. Many could be if you take a simplistic view of the economics. However they would dilute their audience to the point where it would become less valuable to advertisers. Vogue advertises to people who want to look at fashion photos enough to pay $9 or whatever to do so.

With the internet, two things changed. Firstly the fact that anyone in the world could read a given article for free, meant that the average eyeball on a NYT article was much less 'NYT-reader-ish' than an eyeball on a printed page of the paper. Secondly, tracking and analytics meant that there was much more valuable and monetizable information about that reader than the fact that they are a NYT reader. Information like all the other things they have looked at, what they've recently bought, what apps they have installed, the content of their emails. Only the big tech companies and data brokers have this info. The data that the NYT has on you is trivial in comparison.

It didn't have to be this way. Newspapers could have ringfenced their own data and sold ads in a way which kept them in control. As a side effect it would have been better for their readers' privacy. They failed to understand their own business as well as Google did.

Now consumers are being blamed for this, for 'making the wrong choices'. I resent this for several reasons. Firstly it is an argument which denies the nature of reality. It is analogous with telling people they shouldn't shop at Wal-Mart, because local businesses will close. The solution is to change the rules to optimize for the things that we care about. Not to rely on the unlikely event that lots of people with limited resources will all make altruistic decisions to protect the nebulous thing that you care about. Secondly these newspapers set themselves up as society's only defenders of liberty and truth against the forces of darkness. In fact, a lot of them are full of propaganda, gossip and clickbait. Some of the $5 newsletters are in a class above almost everything in these newspapers. The people writing them are (typically) experts on one topic, they love that topic passionately, they have no particular axe to grind and they have much incentives to make something high quality.

nerdponx• 5 years ago

The solution is to change the rules to optimize for the things that we care about.

I totally agree with everything you've said here, but I always get stuck on this part. What rules should we even change, and how should we change them?

h0nd4• 5 years ago

Thank you for your very well observed and written reply.

wwww4all• 5 years ago

Basically, the legacy establishment media is complaining about the new establishment social media.

Same thing as the the obsolete horse and buggy industry complaining about the automobiles taking up all the street space and causing traffic.

The establishment media got big, fat and lazy with their monopoly and selling limited ad space.

When the ads space became infinite in the web, they didn’t innovate and pivot to web technologies.

Google and Facebook innovated web technologies and leveraged their tools to filter and target valuable audience attention space.

The establishment media is obsolete and no amount of complaining is going to change the dynamic of the web. All they can do is talk about their high school glory days of scoring 5 touchdowns in high school championship game.

villasv• 5 years ago

I understand the bickering between media and social networks. Aggregators have disrupted the standard media business and a clash was inevitable.

Including Substack in the fight, on the other hand, is pathetic. One would expect journalists to support each other and Substack is a tool _tailored for them_.

snicksnak• 5 years ago

Most of the corporate press hate substack and think it's beneath them, I saw it being labeled as "onlyfans for journalists". That's coming mostly from mediocre journalists who envy substack writers with a huge profile and try to demonize them. But it also comes from institutions, like the UCLA information studies professor who tried to vilify substack writes. Matt Taibbi wrote a response worth reading https://taibbi.substack.com/p/in-defense-of-substack

u678u• 5 years ago

I like the idea of substack, but realistically the most popular journalists will be the ones with the biggest stunts and clickbait. I just want a plain newspaper that does a lot of good reporting without getting too political, seems too much to ask these days.

dgudkov2• 5 years ago

Google and Facebook have attributes of "virtual" governments. Similarly to an IRL government, they provide to citizens identity, protection of assets, and policing. From that perspective, their ad-based monetization is indirect taxation.

collaborative• 5 years ago

What I truly miss is a competitor for both Google and Facebook. McDonald's has Burger King. Who do we go to when Google and Facebook overcharge us for advertising? The problem here is lack of competition

Online advertising is by itself a great thing. In the past, only the likes of Unilever could afford to run ads on TV and Newspaper. That was because in order to convert they needed not just ads and an online presence. They literally needed to be on the shelves of every major shop so that the customer could complete their advertising journey

I can see a competitor to Google materializing in the coming years due to Google's increasing difficulty to track user behavior. But I'm not so sure about Facebook. The only hope there is that platforms (Apple, Google and browsers) eventually force FB to become a paid service by completely disabling its tracking scripts.. which is unlikely

marshmallow_12• 5 years ago

as a browser, duckduckgo works a lot better for me then google. try it. you may still need google occasionally for specific searches and to cross reference search results, but i find it highly satisfactory. Remember, DDG is American-based and even I, a UK resident can use it well.

xdrosenheim• 5 years ago

Unless you count that one time I accidentally searched for weather details on my watch, I have use Google search ONCE this year. DDG is absolutely fine right now. And again, unless you count my Android Auto (Google Maps) searches, I have use Google search maybe 20 times since August 2020.

justapassenger• 5 years ago

What I truly miss is a competitor for both Google and Facebook. McDonald's has Burger King. Who do we go to when Google and Facebook overcharge us for advertising? The problem here is lack of competition

You do realize that Facebook and Google are separate companies that compete with each other, same as McDonald’s and Burger King?

They need more competition, that’s for sure. But they do compete with each other, same as McDonald’s and Burger King.

fakedang4• 5 years ago

They compete in the same market (digital ads) but provide different utilities for the consumer, hence aren't competitors when it comes to user attention. Google provides a search engine, GSuite stack and other free products, YouTube, etc. Facebook provides a social network and networks to connect with their families. There isn't a meaningful competitor for either in either space. And most companies simply retain two marketing budgets - one for Facebook and one for Google.

beagle3• 5 years ago

They compete with each other in the same way the McDonalds and Burger King compete for the cows that are made into hamburgers ....

Google's and Facebook's customers are the advertisers, and they compete for those. But users are the product from which the burgers are made.

dotancohen4• 5 years ago

  > What I truly miss is a competitor for both Google and
  > Facebook. McDonald's has Burger King. Who do we go to
  > when Google and Facebook overcharge us for advertising?
  > The problem here is lack of competition

Forget advertising. I was recently passed up for employment because I don't use Whatsapp.

And no, I do not consent to Whatsapp's terms of service even if I could carry a second burner phone.

ysopex• 5 years ago

Can you provide more details on this? I decline to use a number of apps supported by Facebook and Google but have yet to have anyone refuse to hire me because of that.

mywacaday• 5 years ago

Hi, I find it interesting that you rejected a job based on the requirement for Whatsapp. What specifically caused that rejection and are there and other apps or companies that you would reject based on TOS. Personally I have concerns the way Microsoft is going with the MyAnalytics etc. but I don't know if I feel strongly enough to reject any job based on the tools they use.

Doctor_Fegg• 5 years ago

only the likes of Unilever could afford to run ads on TV and Newspaper

Yes, but there were plenty of other advertising opportunities for smaller businesses. Local papers. Specialist magazines. Local radio.

bryan_w• 5 years ago

Yes but the number of slots are limited with radio and print and a national brand would not hesitate to outbid a local business if it thought it could bring in one more customer.

mensetmanusman• 5 years ago

The simple fix is easy: FB and Google should be _strongly_ encouraged to offer paid versions of their services that are ad free and tracking free.

TheEzEzz• 5 years ago

I've been thinking about this. There's two reasons people don't want to pay for free things: one, obviously, because they don't want to spend money; but, two, because there's friction associated with signing up to pay. If we made a law that said services like Google have to charge at least $0.01 to use, then we'd force providers and consumers to overcome the second hurdle without much cost, and make it easier for the first hurdle to be overcome over time.

542354234235• 5 years ago

To add, it is hard for companies to resist double dipping. Why have one revenue stream when you can have two? So you do sign up and you come to find out you were still being tracked, you still have ads, etc. You are paying and you are the product. And since services on the internet are currently very centralized, the few big players have little incentive to offer a true paid service without worrying that anyone else can break into the game and really disrupt their market share.

marcosdumay• 5 years ago

How do they not track you if when they must verify that you paid?

Lazare• 5 years ago

There's a fair bit to agree with here, but...

First, one of the arguments being made here is that previous ad revenue subsidised content, but now it subsidises social media, so content must cover its costs directly.

One of the implications of that is that in the "old" system you might get a bundle of content, some of which you liked and some of which you didn't, but the whole thing was subsidised so you didn't mind this, because you weren't really paying for the bits you didn't like or didn't consume. And now in the "new" system you have to pay full freight, so you're reluctant to pay for things you don't even want.

In short, it's about people saying "I don't want to pay for an entire cable package (or NYT subscription), I'd rather pay for the exact content I want because it's cheaper overall, even if it's more expensive per item".

But the example given is this:

Yes, you get better, more convenient and largely ad-free viewing — but there’s a good chance you’re paying more for it. The same applies to Twitter and Substack, where signing up to just four writers’ output at $5 a month each is already more than the cost of a $17 New York Times subscription, which gives you a greater breadth of coverage.

And that sounds like something quite different. If people are paying $20/month in Substack subscriptions instead of $17/month for a NYT subscription, they're not doing it to save money, but because they think they can get better content that way.

In fact, at the moment I am spending $20/month across Substack and Patreon for writing I care about, while the NYT is running a promotion for an online subscription for $3/month for the first year, then $8/month thereafter, but I'm happy with the value I'm getting from Substack, and I wouldn't dream of paying for the NYT, because in my view it's not even worth $3/month.

This isn't a money story, this is a quality story. And I don't think it has much to do with ad revenue either.

Second:

Perhaps now we can forge a better understanding of the value of content. It costs money to produce, so it should also cost money to consume.

Again, I'm paying $20/month or so to Substack (mostly) and Patreon, so clearly I agree that paying money for content is (at least sometimes) a good idea. However, I think this is just a ridiculous, meaningless platitude.

Education and health care cost money to product; in most countries at least some of both are provider at no direct cost to consumers. Scarce natural resources (or broadcast spectrum) costs little or nothing to produce, but should certainly cost money to consume. And just because it cost you money to produce doesn't mean anyone will (or should) choose to pay money to consume it.

I once came close to subscribing to Bloomberg, but eventually decided against it, partly because it's pricy ($35/month!), but also in large part because so much of their content is just so poorly written and poorly researched. (Matt Levine is, always, excellent, but he's very much the exception. And, of course, his content is available for free, outside the Bloomberg paywall.)

rchaud5• 5 years ago

Businessweek used to be incredibly cheap, I remember having a web+ print subscription back in 2014 and paid very little. I'm legitimately shocked to see how much it costs now.

rozim• 5 years ago

Seems like Craigslist should be added to the list, as they hurt the classified ads business.

magicroot75• 5 years ago

It costs money to produce, so it should also cost money to consume.

This isn't how markets work. It costs money to consume because people aren't able to find a free substitute and the place some value in it. The cost of production is irrelevant.

The Whole Web Pays for Google and Facebook to Be Free

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