Is ad blocking the problem?
March 9, 2010
" Ars Technica's Ken Fisher recently wrote an impassioned plea to turn off ad-blocking software like AdBlock Plus to save the online publishing industry. His attempt to turn back the clock on digitization, however, would likely accomplish the opposite.
Fisher has a good point: ad-blocking software almost certainly does hurt sites like CNET by denying them revenue. As he points out, "[m]ost [large] sites...are paid on a per view basis," not a click-through basis, which means that ad-blocking software very literally takes money out of the pockets of publishers, leading consumers to "devastat[e]...the sites you love."
So who should change? Consumers using the technology, or the publishers?
Online media publishers should change, as asking consumers to change is a recipe for failure...and for stagnation rather than innovation in business models. It's not the consumer's job to figure out a successful business model for the vendor.
Lest online media feel particularly aggrieved by the pilfering of ad-blocking software, perhaps it would be comforting to know that we in the open-source world have been dealing with similar pressures for over a decade.
In the early days, many of us agonized over how to monetize the popularity of freely available software. The more money open-source developers made writing software, the more open-source software would get written, went the reasoning. Free riders sucked money out of the system.
Most ironically, a big chunk of those "free riders" include the very open-source software companies that ask the market to pay for their own software. Most gladly borrow MySQL, JBoss, Tomcat, and other open-source software components without encouraging their users to try the paid-for, commercially supported versions of these software projects. Why would they when they can economize on such pieces and focus efforts to lure buyers to their own software?
And yet, years and scads of free riders later, open source is bigger than ever. Did the market miss the memo that declared that open-source software had to be monetized directly or would fade into oblivion?
Of course not. Rather, open-source software developers started to charge for value around or beyond the core open-source software bits. Google gives away immense amounts of open-source software but charges for advertising around it. Facebook contributes actively to open source, too, but also charges for advertising and other services on its site. Red Hat charges for easy access to updates through its Red Hat Network.
The money didn't leave open-source software with the free riders. Vendors just found novel ways of charging them.
In a like manner, pressure from ad-blocking software won't kill the media. It will simply change how media gets consumed and paid for.
I'm not suggesting that this will be an easy process. In open source, we've spent well over a decade (and billions in venture capital investments) trying (and often failing) to figure out winning business models. But we're getting there, and the monetary returns are bigger than ever.
Charity is a great thing, but it's the wrong model for online media, whatever the validity of Fisher's arguments about the near-term hurt ad-blocking software does to media sites. Blocking ad-blocking software will only retard online media's evolution toward more robust and dynamic business models. "
Source: Is ad blocking the problem?
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