A New Internet Business Model?
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Internet Business Model
Cloudflare's annual founders' letter proposes a new internet business model where AI companies pay content creators for their data, but the community is divided on its feasibility and potential consequences.
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We can dream. ISP says NO!
This is why most NOCs enforce an asymmetric firewall bandwidth limit for download focused customers, and install colo Google/CDN rack appliances.
Most ISP are just the modern retooled Cable company business. Try to stream video off your home platform on a normal service port, and you will hit the caps pretty quickly. =3
I think of these things like they only exist in the past but I'm sure these places are still around only I don't go to them as much now. Probably because all the useful stuff these days exist in mainly reddit and the stackexchanges.
If no, you can still do that today.
If yes, then imagine the other 1,000,000 people who think likewise. That was how we got where we are today.
(https://hn.algolia.com/?dateRange=pastWeek&page=0&prefix=tru...)
- "Foundation", Isaac Asimov
You have to go 2/3rds of the way before you hit this:
> some number of dollars per AI company’s monthly active users going into a collective pool to be distributed out to content creators based on what most fills in the holes
and this:
> You could imagine an AI company suggesting back to creators that they need more created about topics they may not have enough content about.
Did the author not try to compose this thought in their head before they wrote it down? Did the author (or at least one editor) read this before publishing? I wouldn't get away with a sentence like this in 11th grade, and I'm not even from a natively English speaking country.
This seems completely disconnected from the reality that's been unfolding before all of us for the past few years:
> it seems potentially we're on the cusp of a new, better, and maybe healthier Internet business model
Repetition
> It may seem impossibly idealistic today, but the good news is...
then again:
> It may seem impossible...
Nobody at the head of these large tech firms has a clue about where this technology is heading.
Edit: Re-read it and just noticed this:
> assuming the AI companies are willing to step up, support the ecosystem, and pay for the content that is the most valuable to them
Lolllllll. Y'all are gonna love my pitch for an airline startup. It begins, "assuming we can turn off gravity..."
Paying a security guard isn't considered a protection racket, while paying a member of the mob so that nothing happens to my store is considered a protection racket.
https://www.cloudflare.com/en-gb/paypercrawl-signup/
The problem is the arguments they make for why this should happen are quite compelling, especially to those running sites (you'll see plenty of complaints on this forum about it), but theres also a large group of people who think information / code / data should be "free" (see open source code/maps/anything you can think off). So really its just a moral debate that will be lost in the interest of profit (which is ya know good n bad, if AI companies did more caching we probably wouldn't need this, but here we are).
[0] https://blog.cloudflare.com/introducing-ai-crawl-control/
Cloudflare blocks AI scrapers unless they pay the toll.
> What's most interesting is what content companies are getting the best deals. It's not the ragebait headline writers. It's not the news organizations writing yet another take on what's going on in politics. It's not the spammy content farms full of drivel. Instead, it's Reddit and other quirky corners that best remind us of the Internet of old. For those of you old enough, think back to the Internet not of the last 15 years but of the last 35. We’ve lost some of what made that early Internet great, but there are indications that we might finally have the incentives to bring more of it back.
> It seems increasingly likely that in our future, AI-driven Internet — assuming the AI companies are willing to step up, support the ecosystem, and pay for the content that is the most valuable to them — it’s the creative, local, unique, original content that’ll be worth the most. And, if you’re like us, the thing you as an Internet consumer are craving more of is creative, local, unique, original content. And, it turns out, having talked with many of them, that’s the content that content creators are most excited to create.
What is most likely to happen is the so called Answer Engines will embed advertising into their results -- except in a more insidious, subtle, hard to detect and filter out manner.
The Open Letter reads naive at best, asking us to imagine an Internet where creators are rewarded for "filling the holes in human knowledge". We all know that is not what sells, and that the opposite of this will continue to inundate the infosphere.
This is the part of the new AI paradigm that concerns me the most, and I think you are correct.
If "pay for placement" (or worse "legislate for placement") in LLM training becomes a thing, then we lose all transparency as these biases get baked into the knowledge set, and users have no way of knowing where and when they get applied.
This discussion is going to be rife with the pot calling the kettle black as people who have blocked every ad for the last 15 years call out AI for not compensating creators...
This is also being attempted by RSL with their “Crawler Authentication Protocol” (https://rslstandard.org/guide/web-crawlers) for demanding proof of licensing from scrapers and RSL Collective (https://rslcollective.org) for providing the licensing itself. The missing piece there is the ability to detect scrapers with high accuracy without punishing regular browsing humans.
So you use a public resource and presumably like the upside that comes with sharing on it, but you want to limit uses now that someone has found one that you don't like, so you're fine with degrading that public resource?
You could always share things privately or behind a paywall if you don't want them available publicly. But people seem to want to have their cake and eat it too.
I get why a hosting provider would want to limit crawlers to save bandwidth. The "creator" angle is just greed.
Can you say more? what is the "public resource" I'm using as a content publisher? In that role I see myself more as the provider of a public resource (my content), not a user.
And, the idea being proposed is a version of what you're talking about (paywall). Not allowing crawlers to scrap your site unless they compensate you is a form of paywall, just for crawlers...
...But, I do agree with one aspect you're saying about greed, Cloudflare is probably being self serving in this. An open standard seems like it'd be a better solution than having one company control content payment.
It should be front and center, communicated clearly, and easy to understand. If I was an investor, the lack of clarity after reading a few paragraphs would concern me.
I have fully read Cloudflare's proposal, as I have RSL, and L402.
In its current state, RSL is not a full solution, but can be. The spec does not cover payments. Its basically just a new token type, which crawlers would register for to crawl your content, and predefined responses for more detailed states. But nothing around payments, yet.
Cloudflare's solution is basically the same as L402. This is very sad for me, because their attempt is basically one of locking down the ecosystem in order to create a monopoly.
If they were really about creating a fair internet where "pay per crawl" is possible (it already was with L402), they would openly support L402, implement it for their gateway, and try to push the industry towards it. But no, they just want the biggest piece of the pie; a pie that doesn't even exist yet.
https://iabtechlab.com/announcing-content-monetization-proto...
Maybe people have agendas, or maybe they have different perspectives that should be reconciled?
It always bothers me a little when people describe themselves as a content publisher or content creator. Why content? Why not say you are a short film maker or writer or musician or videographer or journalist or painter or photographer or ...?
In the past, your work has been merely content to the people who are looking for bits -- any bits -- to place between and around the stuff they really care about: ads. These days I suppose your work may be seen by some as grist for the AI mill.
By calling your work content you are acceding to the idea that your work is only valuable in other contexts. It isn't! I bet it's something you made with care and thought.
Or maybe I misread and you really are a content publisher. You're the person running the CMS who is looking for other people's work to monetize. If so, nevermind.
As a content consumer, I'm also hoping to be part of the ecosystem. I already use Patreon a lot as "AdBlock absolution", but it doesn't fix the market dynamics. Major content platforms tend to stagnate or worsen over time, because they prefer to sell impressions to advertisers than a good product to consumers.
Imagine trying to create and distribute a movie without the backing of your local distributor/broadcasting cartel. Only instead of gating the movie theatre, Cloudflare is the single access to all things web. Also, based in the US, so good luck producing content their government doesn’t like.
> You could imagine an AI company suggesting back to creators that they need more created about topics they may not have enough content about. Say, for example, the carrying capacity of unladened swallows because they know their subscribers of a certain age and proclivity are always looking for answers about that topic. The very pruning algorithms the AI companies use today form a roadmap for what content is worth enough to not be pruned but paid for.
They're not just making it up..
Would AI companies be willing to match that (even 50% match)? If not, we might just end up with low paid copyrighters / ghost writers churning out large amounts of content for LLMs in subject areas where they don't necessarily have expertise.
Not mentioned: there would be a single gatekeeper for the internet, Cloudflare.
The "level playing field" rhetoric reminds me so much of Apple talking about the App Store. This new internet business model is just the App Store, substituting websites for apps and Cloudflare for Apple. The system only works with some middleman between the AI companies and the content creators.
In which case for the self-host people we can just pick a decent CDN?
For mostly-static or static-site content it's pretty nice all around. I've not gotten into the SQLite service so much though, which I might and seems interesting.. there's also Turso to consider as an alternative option... Not to mention Deno, Fastly and other similar options.
Kind of hoping to see something similar start to gain traction to support wasm backend systems similarly.
This is beyond their DDoS/Proxy protection, but worth considering as part of what they offer. There's a lot there to like.
This feels like a lose-lose situation.
Only if you somehow believe you have a choice, or even a say.
https://news.ycombinator.com/item?id=45332860
That's not nothing.
Are you implying it's going to fail in its goal as a competing browser, or that the competition is somehow irrelevant in a world that's forced to be slave to Google/Apple?
I dont think Ladybird will ever surpass Firefox and to have any impact it would need to be at least as popular as firefox.
LOL, what?
Nothing in their idea challenges the underlying tech behind the internet. Anyone is free to compete in constructing a reverse proxy service with LLM-centric content controls similar to cloudflare, whether that’s AWS WAF or akamai or some new startup.
From the stats I've seen, Cloudflare has an 80% market share for reverse proxy services. 20% of all websites use Cloudflare, 50% of the most popular websites globally. That's a dangerous amount of concentration, and it's the only reason Cloudflare can propose this new business model for the internet and be taken seriously.
Bing/msn.com failed to displace Google because Google was simply better, not because Google played dirty.
Where did I mention hate? I don't care what emotions you feel or don't feel. The problem is the concentration of power in one company. That has nothing to do with emotion.
> Bing/msn.com failed to displace Google because Google was simply better, not because Google played dirty.
I don't think the courts agree with you about Google playing dirty. In any case, monopolies are inherently dangerous.
Substitute whatever adjective you want. You're spreading FUD about the cloudflare boogeyman while ignoring the fact that they have well funded competitors and have no technical mechanism whereby they could lock anyone into their so-called reverse proxy monopoly.
Companies, by their nature, grow and take over things for the purposes of making money - tech companies moreso. We have seen companies overstep in the past.
Please don't stifle reasonable concerns with this sort of inflammatory rhetoric.
But it's true? It's still true today. The only worrying part of the story is that google also makes browser and OS, which doesn't apply to Cloudflare.
The above comparison to App Store is even weirder / more ridiculous. App devs publish on App Store because App Store is pre-installed on every iPhone already, so it maximizes the number of users they can reach. Websites use Cloudflare to protect themselves, at the cost of reducing the number of users they can reach. The two situations are so different that "false equivalence" is an understatement.
Well actually: https://blog.cloudflare.com/supporting-the-future-of-the-ope...
> App devs publish on App Store because App Store is pre-installed on every iPhone already, so it maximizes the number of users they can reach.
This seems like a weird statement, because App Store is the only way of publishing apps on iPhone. The statement might make sense if you were talking about the Mac, on which App Store is pre-installed, but developers can still publish outside the App Store.
> Websites use Cloudflare to protect themselves, at the cost of reducing the number of users they can reach.
How does Cloudflare reduce the number of users they can reach?
Yeah and if it succeeds (while unlikely) it proves Google-style monopoly isn't that bad and permanent.
> because App Store is the only way of publishing apps on iPhone
You're going to be really surprised to find out iOS porn game is a thing in Asia :)
But that's not my point. My point was Cloudflare and AppStore are very different things.
> How does Cloudflare reduce the number of users they can reach?
Any barrier would affect the number of users you reach. Even just a capcha or +200ms loading time.
I wouldn’t recommend trusting any large company but so far Cloudflare doesn’t appear to be pulling a Google because they sell directly rather than to third parties. Google never charged for search so they ended up doing a reverse acquisition into DoubleClick to get advertisers to pay for the searches we do. Cloudflare does have a free tier but their paid services are decidedly not free and since they have serious competition in the CDN business, zero-trust, etc. they have the direct incentive not to screw their customers which Google lacked. I’d get worried if that ever changes.
That's precisely what's happening here: Cloudflare is leveraging its CDN dominance to become a kind of payment processor for the internet.
> they have serious competition in the CDN business
Do they? I just said they have 80% market share.
> they have the direct incentive not to screw their customers which Google lacked
Google Search is free service for users but a paid service for advertisers. The advertisers are Google's customers. Theoretically, Google has an incentive not to screw its customers, but practically they can, because of their search monopoly.
Seems like the moment is ripe for this move. In recent news Google partnered with stablecoins and traditional payment processors to create an agent-to-agent micropayment system (AP2)
https://cloud.google.com/blog/products/ai-machine-learning/a...
I envision a UI that displays the message and, in a sidebar, lists what aspects of the message classify it as hate speech. Then, like a spam filter, you could decide to block the message.
https://ieeexplore.ieee.org/stamp/stamp.jsp?arnumber=1084806... https://arxiv.org/abs/2405.01577 https://arxiv.org/abs/2401.03346
I don't get it. Can you point out where Cloudflare gains the power to prevent Google or any other company from doing the same?
It's not impossible. But it's hard.
Did Google need that to dominate search?
https://www.promarket.org/2017/05/09/google-close-natural-mo...
Cloudflare is already a monopoly though. From what I can tell, what they are saying here, besides proclaiming their continued existence, is that they and AI companies and content creators need the internet to exist.
And what they are building is on top of the 402 response, which anyone can use? So you could use that without using any CDN at all, without too much development cost?
My point was simply that their size is unrelated to this proposition, outside the fact they are big enough to be taken seriously.
You know what that looks like? rent. It looks like home owners setting rent as high as the market can bear, until it becomes almost no advantage at all to participate.
It sure looks like Cloudflare wants to be the platform for AI royalty collections. But creators, customers, sellers - they are all hostage to the platforms they can't avoid. That is where the money sink is.
To be fair to apple, many billion dollar businesses have been built for and distributed by the app store. Think about all people employed to work on mobile apps, all those people going to local taco truck for lunch owned by an immigrant, that immigrant buying a nice christmas present for their kid, etc.
This sentence is missing something essential:
Many billion dollar businesses have been built for iPhone and distributed by the app store.
iPhone is the platform, whereas App Store is merely the exclusive method of software distribution as dictated by Apple. Contrast with the Apple Mac, where the App Store is not the exclusive method of software distribution.
I don't fundamentally think that Cloudflare's view here is _wrong_ - by and large, when I google what internal temperature to cook pork to so I don't die, I'm not looking for an opinion or someone's life story - but I think I'm much more interested in how we create the weird niches that create the "knowledge" for the blender. Cloudflare alludes to it with the talk about Reddit and whatnot, but I'd love to know what the plan is to actually create and nurture those communities where people can really get weird into whatever topic they're interested in. Right now we're all sort of just ghettoized into various Facebook communities or whatever, but recreating an actual vibrant communal internet where people can find their weirdo subcultures and actually negotiate on some kind of reasonable footing with the LLM scrapers (who were the social network people, who were the search engine people, who have always been the ad people) would be a genuine improvement to the internet.
* read "hellish swamp diving affair"
The landlord of the marketplace should probably not dabble in the appraisal of products, whether for factuality or value.
This is an attempt to rewrite history. Back in the day, we stood up servers at our own expense and filled them with content for free, for nothing other than the fun of it. In fact, the "vibrancy" of the internet appears to be inversely correlated to the number of people using it to generate a profit.
That's the "never been free" in that statement.
I don't think they're saying what you think they're saying.
I said that putting things on the Internet is not, and has never been, "free".
And I think that's what Cloudflare is saying too.
You're free to interpret it differently (as was OP) but I think you're wrong. ;-)
So, same as it is today.
"Content creators" are part of the problem. Generating endless "content", which isn't very useful or valuable, and creates too much "content supply", which devalues it. This then creates a giant "soup" of content that viewers drown in, trying to find some content that isn't as identically useless as all the rest. But the big incumbents love it, because they use this content soup to collect money from - you guessed it - ad companies. (Those same companies they don't want to make ad-blockers against...)
So now that search is dead, they need to find a new way to drink from the ad-dollar faucet. At first it'll be "pay content creators from AI subscription money", but then AI will be offered "free with ads", and then later "paid with ads". And nobody's going to stop it, because everyone is "happy": the viewer gets their free crap (with ads), the content creators get a few pennies, the big companies rake in billions, and ad companies continue their "industrial welfare" by pouring their excess profits into this whole system as ad-dollars. The great commoditization of eyeballs continues.
On the other hand, Youtube is pretty good. You can make some money off of youtube viewings, but what it's really great for is building an audience. Musicians know that Youtube is a good tool for building a successful music career.
As for devaluing content with oversaturation, yeah, agree with this. Ironically, media is both the bread and butter of the internet, but it has also become devalued with the shear amount of it. Still, this isn't a problem of the media companies. Content creators can either chose to engage and or not, and hope they breakthrough.
And you kind of said it, "The great commoditization of eyeballs continues." Money makes the world go round, and nothing is free. If we want a vibrant internet, companies have got to find a way to make money (although, monopolies aren't a good thing, but paying for good content and services seems like a good idea).
If the answer is that it's the labels who owns the rights and puts the music there, then the next question is why do the labels do it if Spotify pays so little.
If the answer is that Spotify pays decently to the labels, then isn't all of this just the labels exploiting the artists as usual?
And actually Spotify hasn't been profitable until 2024. It seems like the problem is streaming music is not a great business model. They pay a tons to labels and (big name) artists, but only get a set subscription fee from its listeners.
It's a the lesser of two evils, because without it, people would go back to bittorrenting music or using things like the Apple Store, where you don't have to buy an entire album, you can just buy only the songs you like for a couple bucks.
He got 80 million streams of his music in 2023, which paid out $386k to his rights holders according to a Spotify payout calculator. Not great, but not bad. https://musically.com/2023/12/01/weird-al-yankovics-spotify-...
In the book he explains how these micropayments would be sent out to all the websites you visit, etc. And you can have a built-in mechanism to combat the "star system" that tech automatically enables, where a few people get the most money.
Lanier's proposal was that ISPs take charge of this issue, but perhaps Cloudflare can make it work. The less cynical interpretation would be that later they federate the system or even turn into a non-profit.
People need to think long and hard about why they think there should be unlimited stuff on the internet. Have you looked around? It's mostly crap. Random scribblings by opinionated amateurs, exhibitionists shilling snake-oil, "products" like online games or unlimited videos designed to sell your personal information for a profit, "news" that is 100% gossip, and an unlimited number of echo chambers. We need less incentive for all this crap, not more. But ads are never going away, so it's moot.
I wonder how the web would look like if one could click "pay 1 cent to continue".
Maybe content would become better? Maybe it would make one think "Hmm... one moment, is this something I want to read or am I just doomscrolling?".
Where would you go?
Anyway, I don't know? I would go somewhere else. Maybe I would just walk outside? It's not like what I get from HN is essential to anything I do in life.
Now, the problem with micropayments gated sites is that you are trying to gate the exact thing that attracts people, so don't expect this business model to work.
Regulation.
Because Visa & Mastercard are greedy dicks?
What could possibly go wrong?
Creators should be able to trace and quantify exactly what data of theirs was fed into the grift machine and be reimbursed directly by the grift machine custodian each time their data is used to generate new output.
A middleman who collects a giant chunk of creator royalties, for data that will be used perpetually by the grift machine... that sounds like a bad deal.
If the open internet is already dead (and it is already dead), it’s better to accept that reality and silo off the good parts behind paywalls so that people can get paid, rather than to let bad people benefit massively from it while they build their walled gardens. This has been a long time coming.
I'm not sure why there would be an expectation from most users that AI should compensate creators.
I don’t know if I see a company extracting rent from other people as a win…
Because the providers will act as a single tunnel that all content passes through before reaching the end user, the tolls they collect will be large. So, I don't doubt that there will still be opportunities for content creators to earn money as answer engines siphon off more and more of the web's traffic, but expect those opportunities to be broadly low-paying, falling decidedly in the "side hustle" category.
AI providers will want to incentivize content creation. There will still be a glut of ready providers, and little reason for providers to make anything but small, nominal payments.
Fantastic! I wish I could undermine their clickbait business model even more..
> But there’s reason for optimism
You mean Cloudflare being investigated for antitrust?
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