Don Larson pointed to an InfoWorld article the other day that, among other things, calls for more “disruptive” ad banners. Larson writes that, “That’s not a very good idea. A revolt would occur and I would help find way to route around such nonsense.”
The article, which reports on a speech by Silicon Alley reporter Jason McCabe Calacanis, is a fascinating look at just how completely some people fail to understand what’s happening with the Internet revolution even though they offer themselves up as experts on the phenomenon.
Calacanis suffers from what I like to call the Al Gore syndrome. Gore made the same error in his now infamous statement that he was one of the driving forces behind the Internet. In his top down, centralized, controlled view of the Internet, this is actually factually correct. The problem being that most of what people love about the Internet came from individuals and companies discarding that outmoded, old way of thinking.
According to Calacanis, for example, companies made a mistake when they “trained our consumers to believe that content is free. We standardized a failed concept. That’s how stupid we are in the Internet industry.”
Give me a break. Free content has been driven almost entirely by the demand side of the equation. Look at what happened to Slate, for example. They tried to charge for their content only to find there wasn’t much of a demand for a pay-per-view version of the site, and subsequently they switched back over to an ad banner model.
Calacanis wants to overcome this expectation of free content with what he calls more “disruptive ads.”
We have to stop users and say, ‘Before you look at my content, stop and look at this 15-second ad. And enjoy looking at it, because if it weren’t for the ad, you’d have to give me money.
I am not a very good prognosticator, but in my opinion this is the way to disaster. As Larson points out, some people will simply spend time finding ways to route around such obstacles. Programs already exist for blocking out banner ads, though banner ads are relatively unobtrusive and so few people I know go to the trouble of filtering them out. Make me wait 15 seconds, however, and I just might.
More likely, however, I’ll simply go to a competitor’s site who isn’t making me wait 15 seconds. For example, I used to read all of the new stories on MSNBC until a couple years ago when they started adding all of these ads and announcements between their home page and the actual stories. After a couple weeks I simply stopped visiting MSNBC. Such ads reportedly have very high click through rates, but over the long term I suspect the loss in audience would outweigh the short term increase in revenue.
A bigger problem is that Calacanis can’t see what is right in front of his nose. Calacanis thinks that audio and video are going to revolutionize the web. Cheap digital video cameras and powerful editing suites will make everyone a content provider. Personally I think there are a lot of obstacles to this even with the cheap hardware, software and bandwidth, but on the other hand this is precisely why Calacanis’ other models fail.
Precisely because technology is making it so easy for individuals to compete with large corporations, the corporations can no longer train users to respond like they want. Does your big corporate site make me wait 15 seconds for the content I want? Fine, I’ll go visit the site the 13 year old kid down the street has set up covering the same topic. Why didn’t Slate succeed as a pay site and why are both it and Salon struggling to stay afloat as free sites? Largely because although their sites are often both very good, they aren’t all that much better than any number of other sites run by a single person or a small group of friends who don’t have ridiculously high production costs. Give them another 3 to 5 years and they’ll be able to make a small profit on their sites — not enough to tempt the venture capital behind sites like Salon, but certainly enough to make some of the sites self-sustaining with a small staff. (The best single example of this so far is the success of The Onion.)
This article is, however, a clue to what will happen when audio and video do seriously arrive as more viable on the Internet. The large content companies are going to make the same mistakes many of them have made with their text and graphics web sites by trying to reproduce the television experience, replete with advertisements. They’ll probably think they can get away with it because they will assume their professional-looking, expensive video projects will be far superior to the stuff the independent director down the street makes on his $900 DV camera. Personally, I suspect exactly the opposite will happen. I can’t tell you the number of films I’ve seen that cost less than $100,000 to make that blew away anything the major studios had to offer (compare a film like The Last Broadcast to the major studio horror releases, for example.)