How to monetize your eyeballs and the social media craze for your next Internet startup is the clear and present danger of web 2.0. Humans are the most intelligent species on the planet (supposedly). Yet learning from our mistakes is simply not in our business DNA. We are doomed to repeat past mistakes similarly to the inevitable demise of protagonists in Greek tragedy.
Alley Insider has a great post about the current “free” situation that continues to be rampant on the web and is attributed to the usual suspects “VC”. Venture Capitalists have distorted the market by infusing massive amounts of money to massively scale startups and use Facebook, Myspace and LinkedIn as the poster children of success (thousands die you don’t hear about). My analysis of blame is less on the VC’s and passionate entrepreneurs and more on the consumer. The consumer aka “eyeballs” aptly named “eyeballs” because that is the only value they lend for their refusal to pay for Internet services. This has left anemic business models scrambling for revenue to find refuge in advertising. The only catch is the web advertising model is based on scale, the more eyeballs, the more advertising revenue. The day subscribers pay $9 bucks a month for web 2.0 services is the day advertisers may mean less.
Or will they?
Take the existing model of television and your cable bill. Let’s use Bravo programming for instance (I use to produce content for). They’re content is subsidized by advertisers and yet consumers still pay $80 – $180 a month to a service provider like Comcast to have the 900 channel universe, HD and DVR services. So what is lost in translation? Web 2.0 is Web 1.0 reincarnate? Is the consumer expectation of the web free? Netflix, Amazon, Ebay and Google all managed to make the consumer/business pay for services. This makes me wonder if we’re all crazy to continue down the social media path when it’s so clear that other Internet business models are more effective. What are we missing in the social media web 2.0 space.
Answers welcome….
About Tod Whipple
