In recent decades the internet has transformed how people share knowledge, but the web has also diverted from its early promise of democratisation. One problem is a reward system largely built upon free content, with an advertising model based on page views and artificial intelligence algorithms. Currently, rewards mainly go to media platforms instead of original content creators, leading to market distortion and frustrated expectations. This is the first in a three-article series.
Free online content has been the norm for 30 years, yet efforts to monetise content persist. Anyone who has conducted an online search would have come across the ‘404 Not Found’ page, but very few know about the ‘402 Payment Required’ page. Numbers such as 401, 402, 403 and 404 are HTTP status codes assigned for various errors, part of the basic design of the World Wide Web. They have existed since the early days of the internet. Back then, the consensus was that some web pages would require payment for access. However, the internet was up and running before supporting payment methods were developed, so traditional media were reluctant to put their content online.
Shared creativity vs. "paywall" models
Soon people started to borrow from the business model of free TV channels, offering free content (which was often copied from somewhere else) and making money through advertising. This model quickly became mainstream, encouraging user expectations of free access. If you don’t give away your content for free, you will lose viewers to others; competitive pressure forces everyone to follow suit. Hence, free content with adverts continues to be the dominant business model today. The largest internet companies, such as Google and Facebook, have become its main beneficiaries. Meanwhile, many content producers are struggling to get by.
Despite the prevailing trend of free content, some media tried to restrict access by building a ‘paywall’ that unlocks content for paying customers only. However, neither the technology nor the consumers were ready for it. Paywalls have been around for a decade or two, but they only started to gain traction a few years ago, and their application is still limited to particular types of content and well-established industries. For instance, in the film and music industries, major streaming platforms such as Spotify, Apple and Netflix adopted the subscription-based model with the option of one-off purchases, which has now become common practice. Meanwhile, books and video games, both with relatively high production costs, have established their own online business models. Digital books are accessed through a paid download, as seen in Amazon’s Kindle; while video games take the unique format of free downloads and paid items (such as weapons, levels and privileges), with Tencent as the market leader.
Hurdles in micropayment
What enabled films, music, books and games to break free from the advertising-based business model was the evolution of payment technology and interfaces. Credit card companies, PayPal and app stores successfully streamlined online payment and removed a barrier to fee charging. Yet, micropayment is still unable to offer sufficiently low costs and simple procedures, especially in cross-border transactions. The lowest chargeable amount for Apple’s App Store is $0.99. In the United States $1 may be no more than a tip, but in many countries it is not a small amount, definitely not an affordable price for a web page or a piece of news. The obscurity of the ‘402 Payment Required’ page evidenced the lack of suitable payment methods. The emergence of blockchain and cryptocurrency has given the industry hope for a better payment method, with lower transaction costs and natively digital, borderless transactions. Tokens such as the Basic Attention Token and LikeCoin are designed specifically for content transactions. However, due to current limitations in user experience and efficiency, compounded by wariness and clampdowns on the technology by governments and the banking industry, there is still a long way to go before blockchain can be commercialised on a large scale.
At the moment, micropayment remains a snag, but technical problems will be resolved sooner or later, and relevant regulations will follow. The big question is, if a more straightforward payment method is available, apart from the entertainment industries like films, music, games and books, should charges be applied to other online content such as news, commentaries, independent creative content or e-learning?
The costs of producing original content far exceed what meets the eye, which is one of the main arguments for charging users for access. Some people suggest that content producers can earn money through advertising, or acquire social capital with free content that then leads to outsourcing and advertising opportunities, therefore there is no need to insist on direct payment. This is not necessarily the case. Indirect income tends to corrupt the integrity of creative content or news reports. For example, interesting content may not attract advertisers, while sensational content is attention-grabbing and brings in more advertising revenue. Therefore, an advertising-based reward mechanism shifts the focus from producing high-quality content to creating clickbait, sensational content aimed at inducing clicks rather than encouraging in-depth reading. This seemingly subtle distinction in incentives can create drastically different end results. Besides, although outsourcing and advertising can generate income, if the reward does not flow directly from the work itself, the content producers cannot devote themselves entirely to their creative activities, without interference from outsourcers or advertisers.
The right to be rewarded
Some people believe that online content should be free of charge; since it costs nothing to copy digital files, authors should not ask readers for payment. People who intuitively hold such a belief do not see pirating as stealing others’ property, thinking that pirated copies do not deprive the authors of their original ownership. I personally have many friends who are well educated and well-off, who strictly abide by social rules, but dismiss the notion of piracy. This is because their perception of property is confined to the physical world and piracy does not feel like unethical behaviour.
This is not to say that advocates for free digital content are necessarily motivated by self-interest. Conversely, there are people who stand for open and free information for the benefit of the wider society. The internet was originally designed to promote openness and decentralisation, but it has developed into an oligopoly. Take a look at the most popular websites – Facebook is now an ‘exclusive club’ and Instagram does not even support the use of hyperlinks. The world we live in now has a free and open online system that promotes the circulation of information and knowledge, breaking away from the past when only the wealthy could afford education. We take this for granted, but it is in fact a remarkable feat that many worked hard to achieve. Creative Commons, which allows authors to reserve some rights to their work, such as the right to have the source identified, while making their work available for others to use, is a project with this vision in mind. In 2010, Aaron Swartz, an advocate for RSS (web feeds to access website updates in a standardised format) and an activist for sharing creative ideas, used an account of the Massachusetts Institute of Technology (MIT) to download a large number of academic journals from JSTOR (a digital library of academic journals) and put them on BitTorrent (a peer-to-peer file sharing system). He acted in the belief that knowledge should be free. He was later arrested by MIT and pursued by federal prosecutors. The pressure eventually drove him to commit suicide. It was a tragic chapter in civil society’s struggle for free and open information.
On one hand, I advocate content producers’ right to be rewarded; on the other hand, I am also a long-term supporter of shared creativity. On the surface, this may appear contradictory. I am often accused of threatening content producers’ livelihoods when advocating for openness and accused of opposing freedom of information when promoting payment technology. In fact, openness and fee charging are not necessarily mutually exclusive; potentially, they can complement each other. It would obviously be good if all online content were free and open to the public, but this would mean that content not funded by the government or other institutions would be hard to come by. Meanwhile, if content producers are paid, they can invest more resources and time into the creation of high-quality content.
Making a difference by small donations
Fully embracing the advertising model, bemoaning lack of payment, or restricting access to content – none of these options is ideal. I believe the best model is to make content freely available while making it easier for readers to offer support through micropayment. That way, everybody benefits and everybody contributes. This model may seem passive, but even if only 1% of netizens were willing to pay for content, creators could end up with substantial sums. I myself often wish to express appreciation for high-quality content, but do not know how. WeChat, with its highly developed micropayment system, has already proven that as long as the payment method is easy to use, many readers will be willing to contribute small amounts which, added together, can sustain groups of excellent content producers.
I am a technician and a content creator myself. Instead of complaining about the culture of free online content or the existing paywall system, I would rather try to make micropayments as simple as possible, leaving decisions about free access to the authors, and about paying a contribution to the readers.
(Translated by Tse Kwun-Tung.)