more on so it begins

[David Farber <dave () farber net>]

Interesting, but as they point out, not a new model.  AOL did this  
during its heyday (1998-2000) with some success.  Only when their  
service started to tank did they open up to everyone.  Don't know  
whether this is long-term viable, but we'll find out.

I view this as another way to get folks to pay for content.  Not many  
providers have been able to make the customer-pay model work; WSJ and  
Consumer Reports spring to mind, and there are some specialty  
websites that people are willing to pay for.  Doing a deal like this  
has a strong upside for the content provider, but carries risks as  
well, especially if the ISP demands an exclusive.

Incidentally, do you remember when we discusses two-sided markets,  
and noted that sometimes the intermediary pays the provider rather  
than vice-versa?  Well, this is a case in point.   If Google started  
doing deals like this, it could be a very powerful model for them  
(maybe).  After all, they are the ESPN of the Internet (i.e., the  
must-have service).

Professor Gerald Faulhaber
Business and Public Policy Dept.
Wharton School, University of Pennsylvania
Philadelphia, PA 19104
Professor of Law
University of Pennsylvania

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