Who Pays For Content? The Rise of Ad Blockers

Back in the olden days — music piracy grew with the help of BitTorrent — but no one ever suggested that music piracy was a consumer right…

Back in the olden days — music piracy grew with the help of BitTorrent — but no one ever suggested that music piracy was a consumer right. It was stealing — plain and simple.

For music industry veteran and the author of the Lefsetz Letter — Bob Lefsetz says what’s happening with the growth of ad blockers should be reminiscent of BitTorrent, but with one critical difference; “People hate ads, they ruin the experience. That’s why they download ad-blockers”, says Lefsetz. “What we’ve really got is a public that’s sick and tired of getting the short end of the stick. Is it a winning economy when we’re inundated with messages that aren’t relevant that intrude upon our everyday life?”

Last week Apple released iOS9, and with it the tools to allow consumers to block ads. Apple presented it as a way to improve web page delivery and give consumers’ choice. But industry insiders are clear about the fact that it’s Apple firing a powerful volley at Google. Simply put, Google is in the ad business; Apple is in the device and software business. So why should Apple help Google sell ads? Well, it turns out publishers may be caught in the middle of this battle of the titans.

And ad industry executive Ben Barokas says we can expect big change; “I believe that we are entering a new era where users can choose where and when they want advertisers to subsidize content consumptions and when users would rather utilize subscription services.” And Barokas is in a position to know, as the founder and CEO of the platform AdMeld — he created the technology known now as Real time Bidding (RTB). AdMeld was sold to Google in 2011 for 400 million dollars.

Barokas left Google to found Sourcepoint — a company whose goal is to give both consumers and publishers the tools to choose how they pay for content.

“I don’t think it is, or will ever be illegal to block ads, neither is it illegal for publishers to block content delivery to users that choose not to consume ads that are there to insure compensation,” says Barokas.

For Lefsetz — it comes down to consumers being fed up; “People are sick and tired of losing their privacy. They’re sick and tired of being tracked. There’s nothing as weird as seeing an ad for a product follow you around the web. Do you want to trust these people? Did you trust the Stasi? If you can’t get the consumer on YOUR side, you’re doomed.”

But Barokas says it isn’t as simple as ‘ads are bad’ or ‘ads are good’. “Adblock is a binary solution to a nuanced problem. All “Ads” are not so objectionable. There are certainly some ads that some people don’t like, but one person’s trash is another person’s treasure.”

So — how do we pay for content if we don’t want ads? Lefsetz says all we need to do is look back at Napster; “Websites will tell us there’s no free lunch. Kind of like Napster. Sure, tunes were free. But they were also unlocked from overpriced albums with few good tracks” says Lefsetz. “The ad companies are no different from the record companies, wanting to hold on to an old model that benefits them but not the user.”

And yet — Apple’s decision to legitimize ad blocking changes the game dramatically. It’s as if one of the major record labels had said; we endorse Napster. Ad blocking just became a legitimate choice for users. And publishers now can fight back, by restricting access to content for users who block ads. It’s a war that pits publishers against their audiences — and that can’t be good.

“It’s not in Apple’s best interest to kill the content creator,” says Barokas, “There will be significant innovation in how this is done but I’m bullish that user experience will continue to get better.”

But with the experience of what the music industry went through firmly in his mind, Lefsetz sees it clearly; “we’ve all got to focus on giving people what they want. That’s Internet 101. The consumer is in control. Win by serving them, not by corralling them to fit your own desires.”

Originally published at www.huffingtonpost.com.