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What Google Reader Could Learn From The Veronica Mars Kickstarter

This article is more than 10 years old.

This week two incredible things happened on the Internet. First, a Veronica Mars movie was funded via Kickstarter to the tune of $2 million in just 10 hours. Second, Google announced that RSS service Google Reader would be shut down.

Perhaps you already see the irony. Within these two seemingly disparate pieces of news is a startling realization about the economics of "free."

On one hand, we have a massive outpouring of fan support for a fringe TV show that hasn't been aired in eight years -- a demonstration not just made up of Likes and Retweets but actual dollars. As of writing, 50,000 people have contributed to the Veronica Mars Kickstarter project, together pledging over $3.3 million. With 28 days left of funding, that number will reach even higher. The whole process is so ground-breaking that my Forbes colleague Dorothy Pomerantz had to address the until-now obvious argument that Kickstarter won't revolutionize the multi-billion dollar movie business. The ability of the masses to fund something they like and want has never been so potent.

Then why in the other instance are the masses so impotent? Over in Mountain View, Google executives have a product on their hands that is not only widely used and beloved, but monopolistic. There are third-party apps for feed-reading, but Google Reader remains both the dominant client and nearly the only back-end syncing service underpinning the entire RSS experience (a position the company actively pursued). Since Google put Reader on the clock, the Internet has exploded in anger and despair, with a grassroots force even larger than the one capitalized on by the Veronica Mars movie. Not that we should be surprised. The service has at least 24 million users, by one measure, a number that dwarfs most television fan bases.

The obvious questions: why can we resurrect a long-lost TV franchise for a quixotic run at the silver screen but we can't keep a vital service from shutting down? Why can't Google make enough money off a wildly popular website that many people use more than Twitter and Facebook?

The answer to the first question is we could, if the answer to the second wasn't they won't.

Let me explain. Of course Google Reader could be funded by small donations. Crowdsourcing works when there are large audiences buying into a product they value. I'm confident that enough people would contribute at least a couple dollars a month to make it worth Google's time. Competitors are springing up right now with that exact business model. But Google would never consider such an action because it flies in the face of their entire corporate culture.

With nearly every product they produce online, Google enters the market at the bare minimum cost -- free. This entrance is subsidized by their monopoly in search and online advertising. The idea isn't to make money at first. It's to "open" up the market by undercutting all existing competitors. Sometimes this is with a superior product like Gmail or Google Docs/Drive. Other times it's with a substandard copycat like Android (initially) or Google+. All of these products debuted free of charge, and remain so.

Google hopes to make money down the road, but never by asking consumers to pay. Coming out of the Microsoft monopoly era and posing as a counter to the Apple model, Google is averse to actually selling anything outright. Instead, they shoehorn their massive user base to compensate in other ways: ever encroaching advertising and declining privacy.

The problem is, as many people have remarked recently, if users aren't supporting a product, it's inherently unstable. Because Google couldn't find a way to capitalize on Reader through indirect means like advertising (a shocking statement given its success compared to Google+), they feel no loyalty to keep it open -- even when millions of people depend on it.

There's also a broader issue at play. Over the first 20 years of the Internet, free has dominated. Websites opened their doors to the largest possible audience and tried to parlay that size into profits. Google, as a company, mastered this model better than anyone else. Google search created a giant whose stock may reach $1,000 a share. But recently the tide has started, slowly, to ebb. Newspapers are adding paywalls. Kickstarter projects like Veronica Mars prove that there's a latent audience of people willing to pay for a good product.  And the closing of a service like Google Reader is teaching consumers that they may need to pony up a few bucks for the third-party version that replaces it.

We're nowhere close to a tipping point, which is why Google doesn't even bother to ask itself if they could charge its users. But perhaps, with enough weeks like this, a push against the corrosive consequences of free may eventually gain momentum.

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