Hacker News Reader

Comment by pbw | Hacker News Reader

Even if you are paying for it you might be the product being sold. Consider hip night club or a star trek convention, in both cases people pay to get in, but the crowd is really the main attraction. People spend hours getting ready for these things. I'm told.

Any crowd is going to be part of the product being sold and the market you sell into. Any crowd, online or off, is going to draw performers, whether for free or professional.

People like to be seen, they like to be noticed, they like to contribute. I don't see user-generated sites as some kind of slave mine. Most people are online of their own free will.

View on HN

Amended: "If you're not paying what it's worth, ..."

Apple announces on stage as part of its keynotes how many credit cards it has on file. In other words they're selling you right there in the open. Can you really argue that you're getting your contract AT&T iPhone for less than it's worth?

But Apple cannot sell your credit card number to other people, they still need to get you to pay for it. Advertisement is different.

Advertisers pay the newspaper immediately in order to appear on the newspaper/magazine. And because they pay so much more than people buying the actual newspaper/magazine, it can be a great business for the later to attract more people... even going as far as giving the newspaper away for free.

Apple (pre iAds) was making money from you buying the phone: compared to that making money from apps sold is peanuts. So much so that it can be beneficial to let app developers in for free just to get more people buying the phone.

To summarise: Apple tries to attract customers with apps, newspapers try to attract advertisers with customers. Customers don't buy more newspapers because there are more ads, but advertisers buy more ads space if there are more customers.

Yes, as an iTunes customer you are paying for the right to be sold as part of the iTunes platform. More customers means a more valuable platform enabling Apple to cut more lucrative deals with its partners. They are right to brag about the number of credit cards on file.

It's similar to AT&T really. AT&T does not set monthly fees by dividing up the cost of running its network among all subscribers. Instead it sets competitive fees which will allow it to grow a big customer base. Then it tries to extract revenue from those customers by any means: normal fees, overage charges, selling apps or content, partnerships, advertising, whatever it can think of.

Media companies try to make money as a company, not on each transaction. An alternative strictly-fee-for-service approach would have to charge a lot more, and would likely not get enough customers to stay afloat.

Reply on news.ycombinator.com