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Evan Davis on... entertainment on internet

Updated Friday, 13th November 2009

Evan Davis from The Bottom Line talks us through the future of entertainment on the internet.

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When it comes to entertainment you hear the old phrase ‘content is king’. Film, music, television, sport, people will pay for really good material. Well yes, but only up to a point. When it comes to the internet, people will pay for things but they’d rather have it for free if they can get it, and things like the music industry have found out that people often can get things without paying and they’ve lost a lot of revenue.

So really, in order for the market in content to work, we need some way in which people will pay for things on the web. And a lot of thought is going into this but no-one’s quite cracked the precise model that is going to work best.

One model is subscriptions; that you have big blocks of the web, areas of the web, you pay a monthly subscription and then you can roam around that area freely without having to worry about payment as you go through. That’s a perfectly good model but it doesn’t work if I want to briefly go into a block of data, a web page or a newspaper page, say, to which I haven’t subscribed and I just want to delve in briefly without having to sort of pay a subscription and pay a month or whatever. That’s not going to work nearly so well.

So it seems to me the model that works best is where you have micropayments; pennies as you browse, taken from an account metered, if you like, as you go through, counted up and billed to you at the end of the month. Much better system, it charges for what you’re using, it’s a pay as you go system, which seems the fairest and the most economically efficient way of doing it. Why don’t we have it? Why do we have systems where I have to spend 30 seconds inputting data of a credit card, for example, in order to spend 20 seconds reading a web page?

Well the answer is that it is an expensive and difficult system to impose on the web, and it’s what’s called a public good; everybody benefits from it and it’s quite hard to profit from it. It’s also one of those things where everybody has to sign up to it in order for it to be valuable. There’s a chicken and egg – until you have the subscribers the system won’t emerge, until you have the system the subscribers won’t emerge. So it’s a very big investment but it’s the key challenge for the web, to find a way to charge people for content to make sure that the content is always going to be there.

That’s my view, you can join the debate with the Open University.





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