Who is going to pick up the bill?

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Last week, in response to an email I got about how the internet doesn’t make money because of something or other (I forget what exactly the argument. But I do remember it was a weak one), I wrote:

“I’d have to say, if you were going to single out the biggest obstacle to earning revenue online it would have to be the way consumers have been conditioned to expect value for free. At its simplest, revenue is created by driving a wedge between cost and willingness to pay – here you have a generation of content consumers not willing to pay anything. “

I wrote a lot more, but that was the excerpt I remembered today when I saw this in The Economist: The end of the free lunch—again

Ultimately, though, every business needs revenues-and advertising, it transpires, is not going to provide enough. Free content and services were a beguiling idea. But the lesson of two internet bubbles is that somebody somewhere is going to have to pick up the tab for lunch.

So my question is really, who is going to get the bill? Will consumers ever adapt to a situation where they have to pay for content, for services, for participation in a social network?

Or is this all just alarmist nonsense? I’ve no doubt there are still a good few years left for online advertising. Hell, banner and display ads are still the most profitable and we’ve “known” they don’t work for years already.  How sustainable is this in the long term though? How does advertising need to change to suit the consumers and advertisers of tomorrow?

There is no doubt that many online services create real value. But who is going to pay for it?

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