Google’s CEO on what will pay for content: Advertising, micropayments, subscriptions

Google CEO Eric Schmidt has laid out his vision for the three principal ways information will be financed in a digital age. His answer, not surprisingly: Advertising, micropayments and subscriptions. What’s notable is his particular take on where each method can be most effectively deployed.

Schmidt laid out his views in a one-hour broadcast interview March 6, 2009, on the Charlie Rose Show on PBS. If you want to watch it, here’s the link, and the content-funding discussion starts about 15 minutes in: http://www.charlierose.com/view/interview/10131

Here’s the context: Rose asked Schmidt about the phenomenon of user-generated content. Schmidt acknowledges the challenging of selling advertisements against it. He says Google is working on ways to target content to individual interests. He notes that text ads near search results “are very, very lucrative, and a great business to be in.” He says Google is working on the creation of sophisticated visual advertisements that will make people excited about buying products. “And we can sell those products and make a lot of money,” he says.

When Rose then asked about how to monetize content, Schmidt explains:

  • He said advertisements would be used to cover the cost of “things, which are going to be viewed by 2 billion people.”
  • For smaller audiences — 20 million or 2 million viewers — “you can imagine that you’ll have micropayments, not advertising, where you’ll pay a one cent, three cent, five cent for a view. And those tools and techniques are being developed now in the industry and I think are likely to be successful.”
  • For specialized, high-value content, “that is knowledge workers who are highly paid and they have to have this very special report, they’ll pay big bucks and they’ll use the traditional subscription methods.”

    On privacy of Google Mail

    On privacy, Rose asks Schmidt about the fact that Google has the ability to “see all my mail” if a user is on Google Mail.

    “But we don’t, by practice,” replies Schmidt.

    “You’re saying trust us. Trust us?” asks Rose.

    “Yes,” replies Schmidt. “We do not sneak a look.”

    Transparency — a form of journalism?

    Journalism doesn’t come up in the interview, per se. But Schmidt has some thoughtful comments about the way technology is increasing transparency in society and in politics. Here’s a longish, verbatim excerpt. To what extend does Schmidt articulate a scenario, which makes watchdog journalism unnecessary?

    SCHMIDT: “The important thing here is the phenomenon of user-generated content, of which YouTube is an example, is I think the defining expression of humanity over the next 10 to 20 years. We had no idea that all these things were going on because there was no way to see them. And now if you have someone who is being taken advantage of or abused or put into an inappropriate position or what have you they can take a picture, they can record what the police are doing.

    “There are a lot of implications. The most interesting thing is transparency is how you keep societies honest. And we’ve now because of the Internet and the digital revolution We’ve essentially given people the ability to see everything. So you can now take photographs and videos of everything you see in your world and people will discover it. And there are whole communities of people who are interested in these kinds of aspects and the serve as a form of check and balance on the powerful, the rich, the people who might exploit others. But it doesn’t necessarily mean for a different outcome, but it means that everybody can’t hide, they can’t tell the truth and that’s a big step forward.”

    ROSE: But how would it affect politics?

    SCHMIDT (excerpting his answer): “Politicians today are well aware of YouTube and its phenomenon and they’re more careful. And being more careful is probably good. Because indeed if they are going off and saying things to small audiences and they’re going to another audience and saying something very different, I want to know that as a viewer.” …. “It’s very difficult now to use completely false statements to inflame the public.”

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    3 responses to “Google’s CEO on what will pay for content: Advertising, micropayments, subscriptions

    1. His take on monetizing content is extremely unoriginal

    2. The idea of transparency is thought-provoking, because George Orwell predicted in 1984 that the “state” would be viewing our actions as citizens and using technologies to keep the citizenry in check. But what Schmidt suggests is that technology is turning that idea on its head — letting the citizenry provide the checks and balances on the elected leadership and other citizens.

      The transformations in technology suggest that our definitions of privacy are also rapidly shifting and changing. And our quaint notions of privacy are going by the wayside as our lifestreams are publicized for all to see.

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