Last week I published an article in Minnesota Business magazine which implored that we consumers need to pony up and pay for online services Facebook and Twitter. The response was curious, to say the least. Today I'm going to address a deeper problem I see not only for the Internet economy but for our lack of understanding of basic economic principles.
I depend on the Internet. I mean, I really, really, really depend on the Internet. It's my livelihood, retirement plan, and children's college education all rolled into one. For very selfish reasons, I want the Internet to succeed.
But you too seem to have become dependent on the Internet, most notably the social networks of Facebook and Twitter. In addition, for those "late-night-TV-challenged" people like me, you've now also become dependent on YouTube and Hulu to watch last night's SNL episode or Obama's recent performance at the White House Correspondents Dinner.
The problem is no one's paying for your dependence. At least, no one is paying enough. And that is the first of many grow-up plans the Internet needs to overcome. As consumers of these networks and content, we have one of two choices: accept and support advertising or pay for the services directly. Perhaps there's a third or a fourth way -- and undoubtedly the field is ripe for fresh innovation -- but until those are realized, these are the two options we've got.
The problem is that it seems like everyone I talk to wants neither of these options and yet expects these entities to continue like public utilities. They're not. They're capitalist companies with shareholders. None of them owe you anything as a consumer. But they do owe their shareholders a return. If that doesn't happen, they will go away. When I point this out, the common response is, "Well, someone else will come along to replace them." Perhaps true, but that doesn't mean the next company can be sustained on a never-ending diet of hopefulness and economic fairy dust. They too -- surprise, surprise -- will need to earn an income.
As I mentioned in the Minnesota Business article, I will mention here as well: I desperately want these companies to be successful because they truly offer an unprecedented way to connect with one another as human beings, allow brands to have more transparent and honest relationships with consumers, and bring the world together. Yes, that's idealistic, and I won't apologize for that. I just want them to work the old fashioned way: financially.