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I made a mistake by ending my comment with:

> The author nails it at the end:

> "There have to be other business models that free up the internet for what it was meant for: free exchange of information.”

I'm with you. People need to get paid.

I'm only calling for coming up with better business models or go back to the straight up "charge for it" model that the free market system is built on. The bit about "free up the internet for what it was meant for: free exchange of information" is not my point, though we do need to come up with a business model that gets people paid but also let's the information that is the lifeblood of democracy flow freely to all people regardless of ability to pay. You focused on a red herring (though it was my fault to put it there, and I've deleted it, thank you). Now please address my points about the ills of advertising.

(P.S. We'll leave to another day the question of whether "It is always subsidized by the rich and powerful" or whether the rich and powerful are in fact subsidized by the people at the bottom, whom you consider the recipients of "charity".)

Advertising is the worst model, except for all the rest of them.

Charging for things, in and of itself, is hard and, on some level, facetious. If all knowledge were known, why would you pay anyone to do anything? It's not clear to me why anyone pays anyone except in the case of information arbitrage. Advertising is a form of explicit information arbitrage, where we convert dollars into attention. Other information arbitrage's include licensing, where we essentially leverage the properties of intellectual property and technical obfuscation to generate returns.

The ills of advertising are a consequence of information arbitrage. What most people are railing against is the act of arbitraging what they view as trivial information, and yet this is the essential point that makes a business.

We think advertising is evil because it monetizes our attention in a vaguely non-consensual manner, but there are tons of businesses which are valued with respect to attention that are not valued with respect to dollars (think porn as the canonical example). Advertising is simply the easiest way to convert attention into dollars. There are higher friction methods, but their returns are generally commensurately lower.

If I could just reach into your bank account and pull a penny out for every minute you use my app, or listen to my song, or read my book, that might be a viable business. Barring that access, advertising appears to be best.

Dude, you don't really make much sense with all that reductionist gobbledygook. You're quite hung up on the concept of "information arbitrage" in your numerous replies on this thread. You almost come off as a troll but I can see you're serious.

There is more to life than "information arbitrage". You cannot reduce people and society to transactions. Get out of your green-ivory tower. Arbitrage the asymmetry between your theories and reality by living a little. Maybe get laid. But if you reduce that too to some sort of arbitrage, you probably won't, unless you're paying for it, which only reinforces your world view.

> I find comments like this to be sorta akin to putting your fingers in your ears and screaming "lalalalala I can't hear you!".

Ironic.

1) Telling me to get laid has no place on this forum or in polite society. I have lived plenty. This is relevant: http://www.paulgraham.com/disagree.html

2) Relationships between people are also a study in information arbitrage as the power dynamics between two individuals are never equal unless both parties have intentionally decided to make them equal.

3) If you think the world of business is governed by some other form of arbitrage, please put your theory forward. If you think the world is not governed by arbitrage, please tell me what governs the world.

It is not reductionist, it is an attempt at distillation. Reductionist would be to ignore the pertinent facts of the discussion.

>everyone remembers the first half of that quote: "information wants to be free..." //

You appear to have the quote wrong and the intent of the quote wrong too?

Wikipedia has it as from Stewart Brand, supporting the freeing of information:

>"On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other." (Brand 1984, via Wikipedia) //

It's saying that information is valuable and so in a way it should be expensive but as we now have ways of distributing that information for little cost we can make the information free-libre and virtually free-gratis. Some people want to make the information expensive, so they alone can profit; others want to make the information free so that all of mankind can benefit.

>That is to say, it's hard for me to tell people to give up the information which is, in effect, their livelihood. //

To me all of this, and the way industrialisation is heading, leads to a need to re-evaluate the structure of society and the way we process and share resources (physical and otherwise). But that's not a reason not to go there, unless you wish to retain the current system where - as you note - it benefits a small minority to keep useful information from others.

Stallman apparently puts it this way:

>"I believe that all generally useful information should be free. By 'free' I am not referring to price, but rather to the freedom to copy the information and to adapt it to one's own uses... When information is generally useful, redistributing it makes humanity wealthier no matter who is distributing and no matter who is receiving." (Stallman, Comp. Sec. Conf 1990) //

Thank you for the correction! It is appreciated.

I am firmly in the camp that wants additional information dissemination, but I am also in the business of understanding why this is hard. I do see knowledge as one of the few universal equalizers, but I recognize, simultaneously, why invested power structures want to protect their advantages.

I agree that current economic paradigms require rethinking, but, short of additional taxation and subsidization, I don't see how we're going to achieve any semblance of novelty in economics.

The Internet infrastructure has nothing to do with what we are talking about. You actually pay for the infrastructure monthly to your ISP.

Also, your understanding of the point of a business is really flawed. Everyone can have perfect information and businesses can still function just fine. I continue to pay restaurants for food even though I know they are making a profit off me. I do business with businesses that provide value to me. It doesn't have anything to do with whether or not they have secrets.

>The Internet infrastructure has nothing to do with what we are talking about. You actually pay for the infrastructure monthly to your ISP.

Actually, your tax dollars for the last 40+ years subsidized the internet and you now pay your ISP because of their ability to leverage regulatory arbitrage against you. Their secret is their ability to get governments to give them money for delivering services that they then charge exorbitant fees for; it's a good game.

If you look at the cost structures of the networks in contrast to the tax dollars subsidizing them, you'll realize that the networks were basically paid for by the citizens and operated privately at a profit. Here's a good book on the subject: http://www.amazon.com/Broadbandits-Inside-Billion-Telecom-He...

>Also, your understanding of the point of a business is really flawed. Everyone can have perfect information and businesses can still function just fine. I continue to pay restaurants for food even though I know they are making a profit off me.

Sure, you definitely pay people for services where you are aware they are making a profit, but the reason those services make a profit is secrets: knowing where the best sources of meat come from, the best vegetables, the vendors who show up on time etc. All businesses have secrets.

And no, we cannot simultaneously have perfect information exchange and functioning markets. You might have microcosms of functionality, but the global economy would cease to function. Lots of deals are dependent upon one side believing the other side is not cheating them. With perfect information, all of those secrets would be revealed and the consequences would be unpredictable at best and dire at worst.

Ugh, no! It's not because they know the best places to get meat, etc. When I cook at home I can make better meals than most restaurants I go to. I pay them because they do the damn work for me!

There are some businesses where secrets matter, but the vast majority are just in existence because they have infrastructure setup to do things cheaper/faster than you could yourself.

I think you should expand your view. You are only taking into account the service aspects of the business and not supply chain or other very important details (like location).

All businesses have secrets and they matter. The cheaper/faster portion of the business is a form of information arbitrage. Cheers.

We are not paying for hosting costs ..

> If everyone has a level playing field from an information access perspective, you cease to have functioning markets of exchange. The essential point of business is information arbitrage...

This is a brilliant insight!

Still, we are in a sufficiently connected world that the balance is shifting from businesses having the higher value information about the cost to deliver a service and the consumer having immediate access to information about competitors and the relative value being offered. The cost of that information for consumers is diminishing and creating new market opportunities (i.e. an uber driver knowing where to go to find a paying customer...which greatly expanded the actual market size.)

All this is to say... That while businesses thrive on information assymetry, those that can find a way to even the playing field will expand markets and create much bigger opportunity than those that try to sell the information for ads or subscriptions.

The users post is a clear monetization path for soundcloud. Sell the downloads and own a piece of the transaction... Like uber does and like Google is trying to do with their buy buttons and comparison ads.

Would you say that Uber is less or more information asymmetric than the taxi companies?