SFGate020

Must See TV Get paid to watch


Hal Plotkin, Special to SF Gate
Tuesday, May 25, 1999

URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/technology/archive/1999/05/25/alladvantage.dtl

You may not have heard about AllAdvantage.com yet. But if the Palo Alto-based start-up succeeds, it could mean big changes for the media. And for you.

By advancing an unprecedented form of advertising, AllAdvantage’s business model threatens the solvency of virtually all forms of advertiser-supported media. As a result, the day may soon come when cheap newspapers, free radio, and free TV are relegated to history’s dustbin; quaint reminders of how the media operated B.I., Before Internet.

Here’s how AllAdvantage’s little scheme works: You sign up with the company and agree to allow it to run a small banner ad on your screen every time you log on to the Internet. AllAdvantage refreshes the banner, which they call a “viewbar,” every few minutes via your online connection. The company can tell how long you are logged on with the viewbar active on your screen.

You get 50 cents for each hour the viewbar is up. At present, with just a few advertisers signed up, the limit is $20 a month, although you can earn much more if your friends sign up.

The company makes it clear, however, that $20 is just the opening ante. If more advertisers join the service, the rates will rise. In fact, if the model succeeds, it’s likely more and more companies will want a piece of the action. They could even start a bidding war for your eyeballs.

The battle for eyeballs has been the centerpiece of advertising ever since the first grog vendor chiseled his name onto the outside of a cave. In recent years, the fight has taken some salacious turns, as competing media outlets vie for your attention.

Media outlets need you to look their way and, that’s why it absolutely requires its Lorena Bobbits, O.J. Simpsons, and almost-daily blood-spurting crime and medical dramas. They make us watch. And while we watch, we’re sitting targets for a word from the sponsors.

There’s only one thing that does a better job of getting our attention than the current spate of media sensationalism: cold hard cash.

When increased bandwidth enables us to watch high-quality TV signals over the Internet, people will undoubtedly agree to be paid to sit on their butts and watch video screens. After all, the average American already watches more than five hours of TV each day. Why, those fools are working for free!

The money to pay ad-watchers comes from the advertisers who have signed up with AllAdvantage.com. It’s an ad buy that makes sense. Here’s why:

In traditional media, advertisers pay almost all the bills. That 50 cents you pop into the newspaper machine doesn’t even pay for the cost of the paper on which the news is printed, let alone the reporters, editors, printing presses, delivery trucks, and other related expenses. Ditto with network TV. Almost none of the money you pay your cable company gets into the hands of the people who actually produce the programs you watch.

In order for advertisers to get your attention through these traditional means, they have to pay off the media first. And the media, depending on its power in a given market, can command quite hefty sums. Your average news anchor does not come cheap.

In the new model being advanced by AllAdvantage, all those middlepeople, and the expenses they impose, are cut out of the loop. The only costs incurred by the company involve preparing and serving the ads, building up an audience through direct payments to consumers, and monitoring the whole operation with the use of automated web-based accounting software.

No pricey news directors, editors, or whiny sitcom stars to worry about.

As an added bonus, the online advertisers also get information about exactly who sees their ads. They not only get the eyeballs, they get the identity cards, too. And, of course, the more ad money that goes directly into the pockets of consumers, the less is available to support old-line traditional media outlets.

There is a precedent for the way shifts in ad buys impact the media. A few decades ago, nearly every major city had several daily newspapers. Usually, those newspapers were filled with big display ads from neighborhood grocery stores.

Most of those papers died right about the time grocery store executives realized they could reach more consumers less expensively by sending direct mail circulars. As ad revenue streams from grocery stores dried up, newspapers began flopping about like fish in a dried-up pond.

One danger in all of this is that AllAdvantage could inadvertently kill itself if it is too successful. By cutting out the media from the advertising food chain, the company risks killing off the media entirely.

Why? Because if the majority of advertising money goes directly to consumers, there might not be enough money left in the media kitty to produce TV shows, newspapers, magazines, or radio.

Consumers might instead be forced to pay for the media they use. Wanna see ER? Fine, that’ll be $6.50. Wanna listen to Top ten radio at the office? You might need to set up a little pool to pay for it. Yes, you’ll get paid to look at ads. But if you want programming, you will have to pay.

Iris-recognition technology, the kind some banks are now using to verify withdrawals from ATMs, could take this even further. I have one friend who signed up for AllAdvantage and plans to just leave her computer on while she does other things so she can acquire the requisite number of hours per day to collect her cash. In the future, though, cheap iris scanners could verify that the person being paid is actually looking at the screen. It could even note when a viewer is interested in a given product or image.

“Hal, we know you want a new Harley, we saw your eyes widen.”

This actually could be a good thing, even if it costs some media jobs. It’s possible we could end up with better media: products more carefully tailored, and more responsive, to the needs of readers and viewers. Consumers will have more power if and when they pay the media’s bills. That is, if they’re willing to pay those bills.

For the last three or four years, the media has been focusing on how the Internet is wiping out intermediaries, killing off one venerable institution after another, such as bookstores, old-line retailers, and bank branches. If AllAdvantage gets its way, though, you may have to pay to read the final obituary: the one for traditional media.

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