The good ones are people who just haven't thought it through. They've found some sort of demand, and they're doing the standard hack-the-system thing that the startup culture trains them to do. Once it's rolling, it's like Mencken said: "It is difficult to get a man to understand something when his salary depends upon his not understanding it."
The bad ones are the sort of entitled douchebags that would have previously gone into investment banking or some other industry where the money's great and ethics aren't emphasized. But now startups are the high-status, high-money thing, so that's what they're after.
Because nearly every internet business gets it's revenue from advertising, a lot of good people jump through hoops to convince themselves that they have not made a deal with the devil. The downvotes[1] come fast when I point out this moral and cognitive dissonance, usually without any counter argument since they just want me to go away.
When I talk to anyone who's livelihood doesn't rely on advertising or marketing, there is near unanimous agreement that advertising is fundamentally manipulative and dishonest.
Besides the social cost of Advertising, there many other costs[2]. The idea that advertising gives us free web content and services is utter bullshit.
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[1] The cowardly downvotes with no counter argument have already started. Upton Sinclair is the actual source of the quote at the top. A wise man who got a bunch of downvotes in his time.
Citation please? There are many "internet businesses" that don't derive their revenue from advertising, e.g., AWS, Dropbox, Netflix. Spotify derives some revenue from advertising, but their core business is subscriptions. ad nauseum
Also, those paid-for services you mention are of such high quality (to you, not advertisers) because you pay for them. You are the customer not the product, as they say.
Many people pay for Hulu and many other services, and still get ads, how are they not the product?
That cliché can't die soon enough.
Hulu is an example which mixes both approaches - clearly an $8/mo premium subscription isn't enough to support their business model, so it has to be supplemented with ads. Not sure why this needs explaining. TV is obviously an industry very tightly coupled with ads, making it more difficult to disrupt with a fully ad-free approach.
Hulu's just funny to me. You're paying to be a product. It means the business decision makers will respect you a little, but how much depends on how much of the revenue you're bringing in and what sort of industry it is.
The cliché is an excellent guide to the situation. So many people don't seem to understand why ad-supported businesses work they way they do, and in particular why they don't seem to have the customer's best interests in mind.
So it's not "if you're not paying for it; you're the product", it's "if you're not paying and the provider is a business, you're the product". And then we're just missing a truckload of exceptions, instead of two truckloads.
Hulu's just funny to me. You're paying to be a product. It means the business decision makers will respect you a little, but how much depends on how much of the revenue you're bringing in and what sort of industry it is.
People pay a lot to Comcast every month, does that mean they get plenty of respect?
Comcast is a fine example of something where you're the product even if you're paying for it. (Note that "if you're not paying for it you're the product" doesn't have anything to say about the case where you are paying.) Monopolies and oligopolies basically get to treat customers like property, because they know the customers don't have much real choice. Comcast is exactly what I had in mind when I said it depends on the industry.
There's nothing wrong with free, as long as it's truly free. Ad-supported services have huge costs that we all pay for as I explain in detail in my linked comment.
Also, do you not understand that entities buying and selling advertising are currently in a Nash equilibrium and no amount of internet whining will change that.
Mostly consequentialist. Such should be evident from what I wrote above and in the linked comment.
Even if I were to grant your point about a Nash equilibrium (you fail to convince, but succeed to condescend), buyers and sellers of advertising are not the only players involved. You also beg the question by assuming everyone is driven purely by self-interest.
Such as? Keen to hear. :)
Also, what would you propose in lieu of the current advertising supported model that is dominant today?
I'm implicitly proposing that people pay directly for the products they use. Be the customer, not the product. Reward businesses that put the user first, with no advertiser conflict of interest. We need to evolve a way to do this efficiently, since people aren't going to pull out their credit card for every different site they use, especially not the one-offs.
The best minds of my generation are thinking about how to make people click ads. That sucks. – Jeff Hammerbacher, fmr. Manager of Facebook Data Team, founder of Cloudera
If we can redirect just a fraction of those best minds at coming up with a micropayment system for the web, it won't take long to solve. Some people make themselves feel better about advertising by saying it helps the poor (who can't, presumably, afford to pay for Gmail or Facebook or whatever online journalism they read). These same people conveniently forget that the poor spend a greater share of their income on goods, thus a greater share goes to advertising costs, which could mean that the ad-supported web model we have today is regressive (as in regressive tax).
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Actual smart humans waste their entire lives doing something that adds zero net value the system. When I think of my friends in advertising, it always makes me a little sad. What good things could they have done with their lives?
The project I subsequently started operates on a very simple $5/mo pausable subscription with a 30-day free trial. I'm _much_ happier with this model than anything I've ever worked on which is ad-based - it feels like a completely fair and fulfilling exchange of value.
I, too, feel like if the web was free from advertising, and instead was home to services supported by paying customers and/or donations, it would be a much better place and have far-reaching benefits. This is something I genuinely want to make a difference on, so feel free to get in touch if you want to see if we can combine our efforts in some way (contact details in profile).
Like I said, "When I talk to anyone who's livelihood doesn't rely on advertising or marketing, there is near unanimous agreement that advertising is fundamentally manipulative and dishonest."
People can be stupid. People can be manipulated. Propaganda works. Take political ads. Which ones work best, the ones that manipulate your perceptions and emotions and ignorance, or the ones that "respect [your] time and intelligence" with the honest whole truth?
I never said there isn't such a thing as manipulative advertising, what I said was that advertising is not inherently manipulative and dishonest. It's a tool for communicating, and in my experience in general people see though manipulation tactics, such like they do when you try to sell them something by bullshitting them. Well written Google ads, well written marketing for websites, etc, all generally flow from a central theme of communicating clearly and honestly to the reader what value you are offering, and giving them reasons to want to pursue your business. It's salesmenship, and I guess only if you think salesmanship is inherently dishonest and manipulative then you'd think advertising is too.
(whether that's by definition a bad thing is another issue, though)
They spend $4 billion per year not to inform people of the value they provide, but to manipulate people into purchasing more Coca Cola. And it works.
If they stop, then Pepsi will spend more, capture Coca Cola customers, and Coke will shrink. Or people will say, "Hey, maybe I should drink something more healthy," and stop buying sugar-water altogether. Can't have that! So Coke will keep burning money on manipulating people.
H.L. Mencken?
The Internet appears to ascribe that quote to Upton Sinclair.
"To be honest, I haven’t spent a lot of time thinking through these questions." http://brianmayer.com/2014/07/how-i-became-the-most-hated-pe...
The difference is Zurvu actually partners with the restaurants, helping them move empty tables. They may request a certain number of tables be free per night, but because they partner with the restaurants (that they prominently display), that presumably comes with kickbacks to the restaurant in question.
And Killer Rezzy's goal is to allow restaurants to monetize reservations. While this may suck for those of us who don't want to pay an entrance fee to eat, it's certainly not harming the businesses they depend on.
"If somebody is willing to pay for it, is it really unethical?"
There we go - if there's a paying market for something, it's totally ethical. Off I go to found assasins.io - murder for hire disrupted.
"Yes, my name is Eduardo ArrayIndexOutOfBoundsException, it is a proud family name, we are far better than the scum of House Segmentation Fault".
They also take advantage by paying staff less the minimum wage and relying on tips to make a living - a campaign for a living wage for restaurant workers would be a better use of "josh" and those like him time.
If foxcon treated their staff in the way the average restaurants did there would be an outcry
And how, exactly, would that do anything to prevent reservation scalping without adversely affecting the user experience of making a reservation or making life even easier for reservation scalpers? Probably it will be easy to use and easy for scalpers to screen scrape, or the UX will be a some kind of CAPTCHA-filled monstrosity.
Now that I think about it, forget about restaurants and reservation scalpers; if you could develop a truly superior CAPTCHA replacement, that would be orders of magnitude more valuable.
In my experience, the problem is not the 30 seconds call, it's the minutes of waiting to get someone free to answer. Most restaurants can't exactly afford a call center.
There was a story recently on HN of a restaurant who did just that successfully: https://news.ycombinator.com/item?id=7853786
Why wait for the future?
If some startup thinks that selling reservations at restaurant X is profitable, they should be partnering with restaurant X right now to sell their reservations. They should be sharing in the potential downside with the restaurant -- if they book reservations they don't sell, and the restaurant has to turn down paying customers, the startup should pay some cost for that.
"Because doing the right thing is too hard" is not a valid reason for doing the wrong thing.
"Let me do the wrong thing, I promise (disclaimer: not a real promise) to do the right thing once I've gained sufficient profit" is even less of a reason.
There's often no other option and the ends in fact do justify the means if the net result is a more efficient market for both parties once it has been bootstrapped up "in the small." Of course, this requires you to not be an evil scumbag and be honest with yourself, but I see no reason to assume a path of execution is inherently evil, the intent and overall strategy greatly matters.
- the original ticket purchaser is happier with the cash received than with the ticket they had before
- the final ticket purchaser is happier with the ticket than with the cash they paid
- the scalper is happy with his/her profit
- the promoter's/venue's revenue is unaffected
So, three people are better off. Value has been created.
What original ticket purchaser? Scalpers aren't like eBay. They have bought up the tickets from the venue at certain amount, depriving others of a limited resource at that same value, and now offering it a higher value to people who didn't have the means to buy it as fast as the scalper.
The disruption the scalper is introducing into an existing system benefits nobody but themselves.
There are rich people who are willing to pay up to 4x face value. They are very happy to pay 2x face value and get to go to every show they want. Without scalpers, they would pay less per show, but would totally miss out on some shows.
The scalper benefits those guys, at the expense of guys like me. It's not true that the scalper benefits nobody but themselves.
Value is added to the rich. Further offending my socialist dream. ;)
Supply isn't set in stone. If scalpers buy up tickets early on then they take on the risk that a show won't sell out, and that allows the promoters to move to a bigger venue (as happened in this case), add more nights, or even raise prices. So the promoter benefits too.
It's no different from any other middleman: find someone who's selling at price x, find someone who's buying at y > x, connect them together and take your cut. Which is what makes capitalism works.
Come on, this is obvious.
But in my example, he wouldn't have gotten the ticket at all. The ticket would have been had by someone like me, who was barely willing to pay the face value, but was lucky enough to get one of the limited supply of tickets when they were released for sale.
and/or the venue or promoter would have been happier with the extra money that is instead taken by the scalper
But in my example the venue or promoter has already set the price lower than the market-clearing price. If s/he hadn't done that, then the scalper would not have popped into existence, as the market would already have cleared.
In a world without scalpers, person A and B both have a 50% of buying the ticket at price $X. However, the ticket is worth more to B than it is to A (in terms of real utility, not monetary value). There is real value created by increasing the chances of B getting the ticket. The most effective mechanism we have found to maximize the chances that B gets the ticket in this situation is market pricing, which is what scalpers enable.
That's the situation I was imagining when I wrote my post.
My original post has as many comments as downvotes, which I take to mean it wasn't a useless post, but that people disagree that scalpers add value. The funny thing is, I would prefer a world without scalpers, and in which I had an equal chance to buy underpriced tickets. If I were rich, I would probably prefer the current situation, or one in which tickets were priced dynamically, like plane tickets are now.
When I think of the best concerts I've seen, the ones I really loved, they were mostly when I was young and broke. Now that I'm older and have money I can afford to go more concerts, but I generally care less. I could well be pushing out very passionate fans.
I suspect a better mechanism in this case is making people pay in a currency in which we are all more or less equal: time. If the venue just started selling tickets in one spot at a particular time, the people in line first would be the very passionate fans, the ones who dropped everything to get in line early.
Kid Rock and his team are reserving the first two rows for die-hard fans
only. No matter how much money you've got, you can't buy your way into them.
"They are not for sale, " Kid Rock says. "I'm tired of seeing the old
rich guy in the front row with the hot girlfriend. And the hot girlfriend,
you know, with her boobs hanging out,with her beer in the air, just screaming
the whole time. The old rich guy is standing there like he could[n't] care
less. It's a very common theme at Kid Rock concerts."
True, but follow that logic, and replace 'create' with 'revoke/destroy'. These apps are proposing a tiering system that favours people willing to trade money for convenience, and _simultaneously depriving those how aren't willing or can't_. So this pay to use system is scalping limited resources at a cost to others, and profiting middle men piggybacking of existing infrastructure. I think the article made a clear argument for why this is not okay.
The proposal that you can require a credit card for each reservation escalates the situation, because now in order to stop scalpers from operating, the bar for entry is raised. If people are independently abusing the system, then this is the logical way to combat the problem. But if it is a parasitic entity then regulation is sensible way to protect the business and its customers (eg. some who might not have credit cards).
Often when these arguments are raised people argue as back and forth as if economics and law are the only considerations. What about considerations towards decency?
How annoyed would you be if you tried going to a restaurant, saw empty car spaces installed by your local council, but people standing in them holding signs saying "Reserved. Yours for $4". Finally, you arrive at the restaurant but get told that is is full. A guy out the front waves you down, 'psst. I have 10 reservations - want one? $5 bucks.' Not only that, the guy is part of an organization that has done it to all the other restaurants in the area.