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Web Profits in the Gutter
The New York Times has an article about the web's one true growth industry: spam, fraud and porn. Societal meltdown or flourishing ecosystem? The talking heads debate.
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Porn helped drive the printing and video industries. Gutenberg's second book, after the Bible, was erotic stories.
Spam? Hell, if the U.S. Post Office stopped all "third class" mail (spam), they'd be broke and out of business tomorrow. I've always looked at online spam as an opportunity -- ISPs should do more research into filtering spam and offer it as a premium service.
Fraud online is just like fraud offline. Snake-oil salesman that traveled from town to town during the 1800s comes to mind. Cavaet Emptor -- nothing new here. And with all due respect, anyone who believes some Nigerian ex-thugs that stole billions picked YOU to launder it (and apparantly all your friends, since they all got the same e-mail) DESERVES what they get.
Try as you might, you just can't legislate away greed, sloth and stupidity.
Learning HOW to think is more important than learning WHAT to think.
I remember when the first talk of web-based shops were on the cards. They were saying it was the 'High Street' stores that would lose profits and business... and some chose to do the 'ostrich effect', while others went for the full madness effect (i.e. anyone remember EggHead stores - DUH!).
But it is those stores that have an existing infrastructure who then expand into using the web to generate extra revenue are the ones who will thrive. Just because web shopping came along doesn't mean people will all of a sudden stop going to the mall.
A lot of the porn industry has thrived because of the anonimity, as well as the breaking down of borders... hence laws governing porn.
"We will lose the Internet if we don't save it." and "civil society" has broken down online... probably not, it's just that people know that they can currently get away with doing stuff, and the net still being in its relavtive infancy, people know that they'll be able to do whatever they want until push comes to shove and the governments themselves catch up with technology.
Are you local? There's nothing for you here!
Why is anyone surprised by this? After all, practically none of the dot coms had a viable business model -- it was all "get customers now and make it up later (on volume!). The only thing that made it possible in the first place was the billions upon billions of dollars that venture captial threw into the pot...
As the article mentioned, the things that are working well on the web are the same things that work well (from a financial standpoint) in real life: selling pr0n and ripping people off. Only with the web, you can reach a MUCH wider audience (such as under-age boys [sub-18] with the pr0n -- all without fear of prosecution). After all, no one in their right mind would stand outside a middle school trying to sell copies of porno magazines -- he'd be arrested (and most likely hung) in quick fashion.
But with the web (and spam), these sleazeballs are allowed to advertise to a group that was previously off-limits. The rest is basic economics: increase the size of your target audience, increase your sales...
The same thing goes for ripping people off: you're able to reach a wider audience. Slap together a slick web page, and you give yourself an air of legitimacy -- all the better to draw in the stupid and gullible.
The internet is not making people more stupid, and isn't contributing to the demise of society... It is merely bringing the existing stupidity and lack of culture to the forefront of society, instead of letting it hide in dark corners... It is making depravity more visible, that's all.
Actually, the porn thing is the one that baffles me. We are talking about the same internet where people trade music all the time for free, but for some reason they don't get that concept with porn? (But then again, I have never even desired to be a member of a porn site, so maybe I am missing something about the motivations involved)
I can answer that one....it's because the pr0n-lords are smart enough to come up with a business model that adapts to the nature of the internet and the needs of the customers.
They charge a reasonable rate for access to their (and often times several partnering) websites...usually $10-$20 for a month's worth of unlimited downloading of pics, movies, etc. Then they keep rolling out new material to keep people coming back. They have different websites to cater to peoples' different tastes, be it asians, blacks, gay, fat chicks, or what have you.
If the RIAA, or better yet the individual artists, would open their eyes and follow a similar model, I think everyone would be a lot better off for it. Yeah there are a lot of charlatans out there, but many of the people running the pr0n companies are smart, smart businessmen. (and women)
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These 3 succeed because they serve their customers. The others are basically doing a terrible job at understanding what the customer wants and providing it at a reasonable price, under reasonable terms.
This is quite obvious. The customer wants it. Someone has it. And the price seems to work out. And the terms are usually pretty good, too (e.g. we're in a different country than your law enforcement, so they can take a hike).
First, understand that the customer is not the one getting the mail. The customer is the one paying the spammer to send mass mail. The price is way cheaper than snail mail spam, so the spammers are succeeding and meeting what their customers want.
The customer in this case is the fraud perpetrator themselves. The victim is not the customer. So in a sense this works, too, when the perpetrator gets away with the booty.
Perhaps internet gambling should be included here, too. It's not as big as porn, but from what I hear, it's nearly as successful. Vice does tend to be a good business model. I'm sure once they have the technology to download matter replication (if there is some kind of digital rights management for it), there will be plenty of places to get marijuana and drugs online. They'd do it if they could, because this is a massive market. Also, knives, guns, bombs, and maybe even nuclear material might be sold this way. You can bet the government would have a fit if the technology allowed this to go on without them being able to trace it all.
now we need to go OSS in diesel cars