The most important thing in tech today is …
the rush toward paid content. TikTok seems to be testing a feature letting creators charge fans for custom videos. Zoom and Clubhouse are rolling out features that let event organizers charge for access. Substack (whose CEO is on TechCheck today) raised a $65 Series B funding round early this year to fuel the growth of its newsletter platform; Facebook is hot on its heels, launching a competing product about a week ago.
“Information wants to be free,” the rallying cry often attributed to Stewart Brand and adopted as a business model for the Internet, has finally run into a tough reality: Creativity wants to get paid.
Why is this important?
Let’s start with the problem with ads. In theory, they're great. Offer your product for free, gather a big audience, charge companies to show them ads. This model worked great for newspapers, magazines and broadcasters for generations. But in the digital era, there's a catch: ads work best when you have the biggest audience, and you know what they want.
Advantage: Google and Facebook.
Google has the biggest audience in search and mobile, and knows what you want because it knows where you are and what you're searching for. Facebook has the biggest audience in social and messaging, and it knows what you want because it follows you around the web while you shop, and it knows who you hang out with. Google and facebook have the biggest audience, and they know which ads will make them buy. That's why they are worth more than a trillion dollars each, and newspapers and content sites are laying off workers.
But. But! Here's the promise of paid content: What if you didn't need an audience of billions to make money? What if you only needed a few million, or a few thousand, or a few hundred, because your content was so good, people would pay to see and hear it? That's what Netflix figured out. That's what Twitter's doing with super follows. I’ve already mentioned Zoom, Clubhouse and Substack.
Paid content is definitely surging. The question, I think, is who will reap the rewards: The same platforms that rule the ad world, or the upstarts?
Coming up today on CNBC’s TechCheck, 11 a.m. ET / 8 a.m. PT …
Substack CEO Chris Best, Rubrik CEO Bipul Sinha, investor John Thompson
While you were sleeping …
The Department of Defense announced Tuesday it’s calling off the $10 billion cloud contract that was the subject of a legal battle involving Amazon and Microsoft. But it’s also announcing a new contract and soliciting proposals from both cloud service providers where both will likely clinch a reward. CNBC
In the broader world …
Mortgage demand fell for the second week in a row, as low inventory and high home prices continue to weigh on the housing market. CNBC