"Advertising is not well. Though companies supported by advertising still dominate the landscape and capture the popular imagination, cracks are beginning to show in the very financial foundations of the web. Despite the best efforts of an industry, advertising is becoming less and less effective online. The once reliable fuel that powered a generation of innovations on the web is slowly, but perceptibly beginning to falter. Consider the long-term trend: when the first banner advertisement emerged online in 1994, it reported a (now) staggering clickthrough rate of 78%. By 2011, the average Facebook advertisement clickthrough rate sat dramatically lower at 0.05%. Even if only a rough proxy, something underlies such a dramatic change in the ability for an advertisement to pique the interest of users online. What underlies this decline, and what does it mean for the Internet at large? This short [PDF] paper puts forth the argument for peak advertising—the argument that an overall slowing in online advertising will eventually force a significant (and potentially painful) shift in the structure of business online. Like the theory of Peak Oil that it references, the goal is not to look to the immediate upcoming quarter, but to think on the decade-long scale about the business models that sustain the Internet." [more inside]
A new report (pdf) released by LSE’s Media Department contradicts widespread claims about the decline of creative industries as a result of copyright infringement. The report shows that the gaming, film and publishing industries are growing and new business models are emerging based on digital sharing. (See pages 7-8 of the report for figures.) [more inside]
"Amazon’s markup of digital delivery to indie authors is ~129,000%" - author Andrew Hyde reviews the take for the most popular digital publishing platforms
Web developer Justin Watt was staying at the Courtyard Marriott in Times Square, New York and using the hotel wifi to access the Internet. He noticed some strangeness on his website... and on every other website he visited (not to mention YouTube was broken.)
How the Austerity Class Rules Washington. Tracing the origin of a political meme. (Via Paul Krugman.)
Ten Charts that Prove the United States Is a Low-Tax Country from the Center for American Progress.
Debtris. From Information is Beautiful.
'Illinois wants Amazon to collect 6.25 percent sales tax and send it back to the state.' Amazon fights back. Under current law, only companies with a physical presence in the state have to do this, but the new bill declares that even having affiliates in Illinois counts as "presence." 'An e-mail sent from the company to all of its Illinois affiliates this morning warns that, should Illinois Governor Pat Quinn sign a just-passed tax bill, Amazon is cutting off every affiliate in Illinois. "We regret to inform you that the Illinois state legislature has passed an unconstitutional tax collection scheme that, if signed by Governor Quinn, would leave Amazon.com little choice but to end its relationships with Illinois-based Associates," said the e-mail.' [more inside]
Today, Deadspin leaked financial documents detailing the finances of several MLB teams, including a few that are getting revenue sharing money. They show that several of MLB's "poorest" franchises turned a profit due to these cash infusions. [more inside]
Shaquille O'Neal's Payer Player (WARNING: scary plug-ins and pop-up video men) is ... "[o]ne central location for sharing, socializing, creating while honoring and rewarding you for the value you bring to the network." On Tuesday, Google announced it would expand revenue sharing to single (i.e. "viral") videos. Does community-contributed-video revenue sharing have a future? (see also: Flixya, Revver) (via Shaq on Twitter) (previously)
an off the books slush fund that both the Americans and their Iraqi allies could use with impunity to cover expenditures they would rather keep secret
How Much Oil Has Iraq Been Exporting Since We Invaded? And how much revenue should be recorded? --Iraq’s oil exports hit another post-invasion low in December and January, according to the Oil & Gas Journal. How do they know? Good question: according to Reuters, production and exports have gone unmetered since the Coalition Provisional Authority took over the country following the 2003 invasion; until new meters are installed (in 1-2 more years), everybody’s just guessing. Our Government's Energy Information Administration has all sorts of statistics--anyone wanna figure out how they're derived regarding Iraq?
The hugely popular iTunes is a success story. But not for Apple, which makes virtually no revenue from the online download service. "When that 99 cents leaves your wallet, the RIAA monopoly swallows most of it, and the credit card companies swallow the rest. As the supplicant in this relationship, Apple is left holding the can." Steve Jobs - "We would like to break even/make a little bit of money but it's not a money maker,"
"we're good at growing hogs, and we ought to be selling our hogs all across the world." Bush stumps at Pork Party about nixing the Estate Tax.
Salon tightens its belt... No surprise there, things are tough all over. But what caught my eye was a quote in paragraph 5 from an industry pundit who said he "hasn't seen any site that can be profitable with a revenue base of less than $15 million per quarter". What future does the web have if every site that creates its own content has to bill $60 million a year?
Maybe I spoke too soon. A lot of semipro tech-zines, sort of like blogs except with specific subject matters to cover, are financed by ad networks. In the recent past a bunch of them have lost their funding when their ad networks went out of business. Now one of the biggest networks which remains is changing their terms to the detriment of the web sites. I gather that a lot of the ad networks were running at a loss, and of course new funding has dried up. [more inside]
Amazon dead by Mar 19, 2001 Just thought you like to know the exact time of death of Amazon.com That's according to Downside's Deathwatch is a cash-flow analysis. The death date is simply the day the company will run out of cash, based on their reported liquid assets and loss rate. When the cash runs out, something bad for stockholders has to happen.
WTF!?! Everyone's favorite band (back in high school) Metallica is suing Napster and a handful of universities
WTF!?! Everyone's favorite band (back in high school) Metallica is suing Napster and a handful of universities for unlawful trading of their music. This is ridiculous, and I hope it doesn't set a precedence. If anyone would just slap a revenue model on napster so artists could get paid for their work, none of this piracy crap would happen. And Metallica, what about the other apps that do the same thing, are you going to sue them too? And what about every other band on earth? What do you expect to get out of universities, tighter controls over bandwidth, or student monitoring of internet usage? What about every cable modem and DSL provider that lets people use Napster, are you going after them too? Why don't you sue everyone on earth that's heard your songs but didn't pay for them? Side question: Is it better to burn out or fade away?