By Alan Coleman on 25 Nov 2015
When Apple's iOS 9 was released in September this year, there was a lot of coverage around one new feature in particular: users could now download Ad Blocker apps from the App Store preventing ads from appearing on their device.
In this video blog, Alan delves into the impact this could have on the business models of the internet heavyweights including Google, Facebook and YouTube. He also asks the question: If advertising revenue is decimated, will users soon be forced to pay for online content?
Video Transcript
In today's video blog on the 'Battle of the Internet Giants', I'm going to talk to you about the battle between Apple and the free web. Really topical, right now and could have huge ramifications for us all going forward.
What is the Free Web?
So what is the free web? The free web is the internet that we've all grown up with. It's equally accessible by everybody online as consumers but also as contributors. And in theory any of us can put up a blog post which is able to reach all the world's internet users.
The net neutrality debate – we heard a lot about that last year, well, I think this is about to kick off again now. The threat to net neutrality is a two speed internet. So what's happening is big companies are trying to commercialise our internet browsing. And this is in my view what's happened very recently with Apple, it's their plan to do exactly that.
Apple’s Ad Blocker
So last month Apple introduced ad blocking apps via its new operating system. And in my view this is their opening gambit in a game of chess and I think in the end game is that we are paying Apple for consuming internet content.
So let's quickly talk about Ad Blocker and why it exists. So I think this page here is a brilliant example of both the pros and the cons of Ad Blocker. So the reasons you might want to block ads is as you can see here they're really clunky, it's going to slow down the page load time and it's going to cost you bandwidth. You're going to reach your monthly bandwidth limit quicker because of the ad that is being displayed.
However, this is a brilliant example of free information. I arrived at this piece of content because I went to Google and searched ‘Apple world's biggest company’. That search was free, Google didn't charge me anything to conduct it. I was then guided to this page which I got for free, again I don't pay The Telegraph any money for this content. And not only can I consume it but I can share it with you for free.
A Web With No Ads?
So one of the key principles of the free web is: information wants to be free. And I think it's a very healthy thing for society in general for this to be the case. So much so that I had a think about what the internet would look like if there were no more ads. I went to Alexa and I looked at the world's top 25 websites and 21 of the world's top 25 websites are totally dependent on advertising revenues for their existence. So if you take away the advertising revenues of our Googles, Facebook, LinkedIn, Twitter, YouTube and beyond, they're forced to charge users to consume their content, okay?
So I think most people wouldn't have a problem with this if there was an easy payment mechanism, no one is going to have a problem paying a percentage of a cent to read something. It would probably mean we'd consume less content but the real problem that this creates is it creates a payment problem.
So while Google might say to me: “Okay, Alan it's $10 a year for unlimited search”, I'm happy to pay that once but it’s the websites that I visit infrequently, once a month or maybe the websites that I haven't visited before that look like they might have something interesting for me. I'm not putting my hand in my pocket and pulling out my credit card to take a risk on their content.
So I think it's no coincidence that the same week that Apple introduced Ad Blocker which down the road creates this payment problem for websites, the very same week they introduced Apple Pay into the UK which is precisely that, it's a mechanism for taking micro payments very easily from consumers. You might think this is crazy. Is Alan suggesting that we're all going to start paying for every page we consume, paying for content that we were getting for free on the internet?
Well, this is precisely what Apple did with the music industry. We were all downloading music for free, Apple got in the room with the music execs, set up the iTunes system and now they take a very large chunk of all our payments for music. So you can bet your bottom dollar that the media industry, the publishing industry is in crisis right now. You can bet your bottom dollar there's Apple execs sitting in their board rooms right now telling them we can solve your problems, we can help you monetize your content. People are going to pay and we're going to take a cut through Apple Pay.
Are Digital Advertisers Under Threat?
So is this an existential threat to digital marketers like me and maybe like you? I think for the long tail of advertisers and the long tail of media houses this could be a reality. I think the big media players: your Googles, your Facebooks, your Twitters, your LinkedIn, I think there's a number of reasons why Ad Blocker isn't going to affect them so much.
Number one, they're technologically advanced. They have massive teams of engineering who can just keep putting them ahead of the ad blocking software so the ads come through. Number two, they have massive budgets. They can pay to be white listed, in fact two years ago Google did pay one of the Ad Blocking software players to be white listed. And number three is lobbying power. Last year in 2014 Google became America's biggest lobbyer, bigger than the oil industry. And this was all around safeguarding net neutrality. So I think Google, Facebook, these guys now have the lobbying power perhaps to enshrine free media as well.
So be a little afraid but don't be very afraid.
