Revenue Models for the Web -- 26 Oct 2020

<ali_spivak> Here are a few questions to start off the breakout: What web revenue/monetization initiatives are you working on or evaluating right now? How do you think we could improve the way people earn money on the Web? Is there a place for Web standards to be part of that? How can we enable more people to easily participate in new revenue ecosystems?

<ali_spivak> hi everyone. Format is a few prepared questions & answers, which will be recorded, then open up for questions

<wseltzer> [speakers: AdrianHB, danyao and PJ_McLachlan]

<inserted> scribenick: AdrianHB

Interactive session

kleber: I am heavily involved in Google Chromes's effort on the privacy sandbox
... push to increase privacy on the web

<wseltzer> kleber: I'm involved in the Google chrome privacy sandbox

kleber: but at the same time part of the effort is to ensure ads based monetization will still work
... I am a fan of monetization though ads
... it has underappreciated properties
... it has contributed to the widespread openness of the Web
... the Web is funded in a very roundabout way which actually works well
... when you buy things the company you buy from always spends some money on advertising, including on the Web
... the Web is funded via a tax on all commerce
... as a monetization model goes it seems to me much more progressive than other models for Web access
... micropayments as you browse charges everyone the same amount
... whereas with ads the people that buy audis contribute a lot to the monetization of the NYT vs people who buy coke
... while I acknowledge there are a lot of problems we want to solve there are a lot of goods things we don't want to lose

Mike_Pisula: I represent advertisers and work in adtech
... the way the Web is monetized today is broken
... its never been clear what users are giving up and what they are giving
... however it is a great way to make users aware of new products
... we've seen advertisers that refuse to fund hard journalism so we need to find a middle ground were not all revenue is from advertisers but consumers paying for what the value

Ali: What tech do we need to make these changes?

Mike_Pisula: Allow advertisers to connect with consumers
... advertisers are willing to spend money in a transparent way but today there is zero transparency

<Elliot> I agree with Mike, advertising is important, but it is missing transparency

<Elliot> and perhaps monetization can be separated from advertising

<wseltzer> [note, there are 49 participants in the room]

bkardell: I think there is a lot of nuance. All of these things are probabaly true. I don't have a problem with advertising. But there is also something that I think is important to the Web and that is a diversity of funding models
... almost all media started earning revenue via advertising but then evolved to support others
... I like that I can tip someone via my browsers and I think we can make that easier
... I like the idea that my browser can help divvy up a contribution I want to make to creators
... as a user of the Web I think all these things can be positive and don't need to be mutually exclusive
... the zero sum game is imaginary

danyao: +1 to some earlier comments. The ad model is important but I don't think it should be the exclusive model
... I work on payments because I think direct payments are underdeveloped
... other media platforms developed other models and the Web is behind (on the direct model)
... at Chrome we are taking a different approach to Coil's but solving the same problem
... once you get onto a platform a lot of the issues with funding etc becomes easier
... but unfortunately that makes the platform a gatekeeper

<bkardell_> +1 good comment

danyao: that's not what we want on the Web

<rbyers> Very well said Danyao!

danyao: that's what makes the Web challenging
... the second issue is low values such as for digital goods

<ali_spivak> dsinger I see you in the queue

danyao: most values are below $5 so the existing payment systems we have (like cards) don't work
... so without an alternative to cards this business model can't take off
... I think we're in the beginning of seeing this take off
... advertising is super-low amounts (very low fricition)
... subscriptions are commitments of several dollars
... there is a middle ground we need to solve for
... I think both Web Monetization and Digitial Goods are providing the tools to allow developers to build these experiences
... the reason nobody has built these experiences is because the payments at that amount are not yet possible
... the reason app stores are successful is the monetization system available
... developers are coming to the Web for use cases not supported on app stores
... W3c community should be helping developers

benoit: I've been really excited about recent developments but one thing we should be aware of when developing standards is that there is an issue of differing purchasing power around the world
... advertising is less affected by this because its propped up by wealthier users
... I really want to see these alternative models being successful
... and freeing creators from restrictions on their platforms
... we need to have a way to address the relative purchasing power around the world so that not only people in strong economies can benefit from the content on the Web

Ali: any follow ups on that?

danyao: equitable access is really important
... but let's remember that the Web is part of society. We can't solve all problems with Web technology
... we are talking about wealth distribution and we need bigger ways to solve that at a societal level
... I came across an interesting model where expensive subscriptions can be gifted by wealthier consumers to those that can't afford like students
... the problems can be decoupled. We should get the content out there but ALSO get society to ensure there is equitable access
... simply making everything free is not a solution. If there is no way to get paid there will be no creating

<Zakim> dsinger, you wanted to ask about the downsides of various models

dsinger: Something I find facibnating is considering the unintended effects of technology
... an unintended effect of advertising is gathering personal data
... there is an incentive online to create scams
... if we make it very simple to make small payments does that create incentives for scammers to get small payments for nothing
... can we think of models for monetization that eliminate unintended consequences (we usually do this by adding fricition)

stefan: comment on the progressive nature of advertising
... when we first published the WM standard we thought of it as an alternative to paywalls
... but what's happened is most people still make content free but then take payments as support/tips
... the other common case is bonus content or features

<benoit_> freemium! :)

stefan: so we mostly see content creators wanting to make there content widely available
... it seems like the way to make micropayments successful (such as shown in gaming or livestreaming) the engagement of users is key
... we have seen web monetization be used quite progressively

kleber: stefan, glad to hear that observation
... I wonder if any of that is because of the early stage of micro-payments adoption and because this is not widely available
... i.e. creators can't depend on all visitors being able to pay

Stefan: Agree that the stage of micropayments ubiquity does have an influence but I still believe creators want to have there content as widely available as possible abnd not block access

<Zakim> florian_irc, you wanted to comment/ask on low friction for payments vs for tips

florian: I'd like to be optimistic about tipping, it appears to work in many case
... it also seems to support the concept of wealthier users supporting creators for the benefit of other users
... @@@ makes it simpler to roll out
... are the tipping and transactional APIs in competition with one another
... or is the declarative API for different use cases to the transactional APIs

<inserted> scribenick: wseltzer

AdrianHB: I like the way you framed it, Florian
... declarative API is a great entry point into getting paid for content. Simple.
... As Danyao pointed out, things exist on a spectrum, don't have to be mutually exclusive
... can do step-up to imperative API with selling goods
... maybe digital goods API operates in between
... facilitating e-commerce
... another comment re Danyao's comments
... why we started Coil
... until now, there haven't been business models that support low-monetary-value payments
... except for closed loops such as app stores
... part of what we're trying to solve with interledger and web monetization
... is low-value payments in open ecosystem
... think there's space for all these to live in the platform

danyao: point re digital goods API
... meant to be used with payment request API
... good for users if they don't have to choose
... different flows: one is inventory management. what are the entitlements a user has access to
... and then there's transactional
... once the inventory is there, let the user buy it
... digital goods API is a small piece interacting with inventory management
... play billing is just one of many abstraction stores that can plug into backend
... we're interested in experimenting

<joshua_koran> I agree with the Chrome team speakers that we all want to support a decentralized open web, rather than one controlled by a small set of platform gatekeepers.

<joshua_koran> I agree with David’s and Danyao’s points that we want solutions that minimize unintended consequences and do not discriminate against economically disadvantaged end users.

joshua_koran: ^

<danyao> https://github.com/WICG/digital-goods

<joshua_koran> I also agree with Mike comments around desire to fund journalism and thus believe we need solutions that support small publishers as well as they meet the needs of the largest publishers, who have established brands and existing scaled audiences.

<joshua_koran> Is there any thought on alternate monetization models for publishers that would help the smaller publishers better compete with larger rivals and hence foster more creativity or investigative journalism on controversial topics?

joshua_koran: for a new publisher with which readers are unfamilliar, will people pay up-front or are we asking publishers to take the risk

danyao: blendo, strikes a balance between users trusting the content and reliability
... native app.
... you click to read, and if you're disappointed, you can get a quick refund
... equivalent of free returns in digital commerce is hassle-free refund
... current payment rails don't support
... but maybe we can get there

AdrianHB: we asked the question at the beginning, do web standards have a place here?
... from what I'm hearing, yes
... lots of support for the web platfomr making it easier to build alternative payment methods
... encourage people to look at web monetization and digital goods
... look for points of leverage, overlap, and where we can use each other's work
... ultimately enable developers and people to have great experiences
... follow-up?

ali_spivak: we should find ways to enable follow-on conversations

AdrianHB: both of these projects are in the WICG
... let's pick up with the chairs there

<AdrianHB> https://github.com/WICG/digital-goods

<AdrianHB> https://webmonetization.org

- DRAFT -

Revenue Models for the Web

26 Oct 2020

Attendees

Contents

Interactive session

Summary of Action Items

Summary of Resolutions

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