Why The Web is A Bad Business Model

The internet is the greatest missed opportunity in the history of business.

Doubt that? Compare how much you have received from the internet to how much you have paid.

You’ve paid the people who laid the wire. The people that made the modems. The people who make the processors, the keyboards and the screens and the smart phones. And the people who sell you things through it.

But have you ever paid for it? And would you now?

At a breakfast meeting in LA last week, a group of highly influential media and communications industry executives were asked how many read the Wall Street Journal. Everyone raised their hand. Then put them down when asked if they would pay for an online subscription.

We all regard the internet as free.

Not because anyone decided to make it so. But because no one decided not to.

An event that went unnoticed at the time. Because no one was looking.

Today, YouTube streams 1.2 billion pieces of video. Per day. Which means every person on the internet, on average is watching one YouTube video per day.

A recent analysis suggests YouTube’s financial performance is improving and it may only lose $170 million this year. 

Although Credit Suisse back in April forecast a $470 million loss this year.

Either way, imagine creating something that is being used 1.2 billion times a day worldwide and worrying how much money you’re losing. If they charged a nickel, they’d be pulling in $60 million a day.

A lot of people are spending a lot of time trying to figure out how to monetize the web. And eventually, undoubtedly they will. Mobile apps are part of the solution.

But as you build your own business, the history of the internet offers an important lesson.

What happens today affects tomorrow. Often more than we want.

Changing that around means being conscious that today has two agendas. The present and the future.

Ignore the latter if you wish. You’ll see it again soon enough. Only this time, it will be calling the shots.