WIRED’s Chris Anderson has a new book out, making his case for the “economics of free.” By this he means “free lunch,” but the core of the book is trying to dress up “free lunch” as “free markets.” In the new economy, all goods will be digitized, and as that happens, they will obtain a cost approaching $0. Therefore, all companies will make their money by providing auxiliary services atop their free goods, for, Anderson believes, production costs also approaching $0. [Ex: sell ads on free content site]
Here’s the problem: if consumers love “free” goods so much, what makes Anderson confident they will be willing to pay $>0 for services. Moreover, even if they were willing to pay for services, wouldn’t that willingness be undermined by the knowledge that, if Anderson is to be believed, the services also cost $0 to make? Never mind that there are serious doubts about the $0-cost-ness of digital production and distribution. [Malcolm Gladwell pretty effectively eviscerates the whole argument in the most recent New Yorker]
I have long rolled my eyes at arguments like Anderson’s. The more seriously you think about what “free” really means, the more you are convinced that it’s inherently anti-market, that the Internet leads us to a kind of decentralized socialism. Some tech-evangelists are upfront about this being their true goal, and even if I disagree with their values, I respect them for honesty. Folks like Anderson infuriate me because they couch their desire for a universe driven by “non-monetary” rewards for work in a vision of a profit-making economy.
Thankfully, Anderson has been revealed in his true colors: chunks of his book have been liberally plagiarized from Wikipedia because apparently, it was just too much of a hassle to cite properly: “he and his publisher ‘couldn’t agree on a footnote policy for Wikipedia entries’ ” Oh, cry me a river.
According to Anderson’s defense, everything is free online because the Internet makes assigning ownership so difficult that property ceases to exist. I personally believe the Internet necessitates a new definition of intellectual property, not an elimination of intellectual property as a category altogether. Without property, you have no philosophical basis for a market economy. So Anderson’s plagiarism and his cavalier response to being exposed suggest he doesn’t really believe in markets at all.
For a number of reasons—some chronological, some that I can’t disclose—I’ve been thinking about the parallels between the dot-com bubble burst and the credit bubble burst we’re suffering from now. Easy money leading to reduced scrutiny of financial transactions. Eloquent prognostications about the profitability of free web-only content, but little actual profit to show for it. The list goes on.
One important difference stands out, however. In the 1990s, the bubble could be forgiven, perhaps, on the grounds that the technology was new and misunderstood. New media evangelists today don’t have that excuse—the medium isn’t that “new†anymore. That’s why we resort to euphemisms like “Web 2.0†to give it the veneer of newness. Phrases like this really need to be retired.
The aging of new media was brought home to me last week by the ten year anniversary of the first-ever blog, Kausfiles. Mickey Kaus started this as a website, and while folks like Instapundit and Andrew Sullivan probably beat him to using the name “webblog,†it’s pretty clear that blogging is what Kaus was doing from the start. Some of his stylistic features have been widely adopted, like the strikethrough correction and the anonymous editor. Others, like the stream-of-consciousness writing style keep Kausfiles in a class of its own. Kaus has a nice retrospective post chronicling some of his major coups and gaffes that is worth checking out.
There is one thing Kaus doesn’t touch on, but which gets to the heart of what really has changed in these ten years. In 1999, Mickey Kaus was just a guy blogging from his home computer on a personal website; now he’s a paid blogger at Slate which has itself been acquired by the Washington Post. You’d think it was about time to drop the anti-establishmentarian rhetoric.
The bloggers were quick to jump on the Times with cries of hypocrisy—namely, the paper is supposed to report “all the news that’s fit to print,†meaning all verifiable information of material significance to public debate. Having authoritative, first-hand knowledge that a journalist from a major international title has been kidnapped in a war zone certainly qualifies. Moreover, the Times reports extensively on the wars in Iraq and Afghanistan or on our government’s homeland security policies–doesn’t that give information to the enemy in the same way the editors claim publishing the Rohde story would have?
It would be possible—and indeed reasonable—to construct a code of professional conduct that drew a line between the ethics of reporting on oneself and the ethics of reporting on the government, but the Times would have to come out and disclose such a code and it would have to be water-tight and consistent with industry norms and standards.
One option would be to define “oneself†as the media writ large: journalists are obligated to report on diplomats and soldiers in danger, but are allowed to protect those who go out to do that reporting. Under this code, all media outlets would be expected to participate in the information blackout, as they did in the Rohde case. But this wouldn’t get the Times off the hook for hypocrisy since they routinely report on lost journalists who work for their rivals. The Times could also get away with a code that allowed them keep secret ONLY their own staffers lost, but that would mean letting other papers do the same. Since the Times asked other papers to help protect ITS staffers, it would be guilty of hypocrisy by this measure of ethics too.
The Times’ hypocrisy, it seems to me, lies not in the way they cover national security but in the way they view their media confreres. David Shuster, are you reading this?
My friend and indie filmmaker Michael Morgenstern has a blog where he covers, among other things, the shakedown that is taking place in the film industry. It sounds a lot like the one we’re experiencing in journalism–to quote Mike, the challenges are as follow:
“financing its films when the distribution model is defunct, monetizing the Internet where users expect to pay nothing, and conquering the crowd logic of moviegoers and the advertising budgets of the big players.”
In a threepartseries that you absolutely must read, Mike has laid out how indie film landed in its current quagmire and how he believes it might emerge. Key to his vision are two ideas that have also been touted by new media activists (journalism’s equivalent of indie directors) as models for news. One is micropayments; the other is using a central web portal as the launch and landing pad for non-digital offerings of the most popular content. I have two essential bones to pick with this vision–firstly, that the central web portal for journalism, film and maybe one day music will be Google and there are serious anti-trust issues there, and secondly, that the micropayments system assumes users will set up a digital credit card account accessible at all websites and there are serious privacy issues there. While Mike gets points from this business writer for being more economically savvy than most filmmakers I know, he brushes over both of these issues.
Furthermore, there is a problem in journalism that film doesn’t have–while news consumers will surely benefit from the new opportunities given to small players, news consumers will also lose if the old players are allowed to go under. Serious film aficionados aren’t really worried that there’s a social cost to seeing fewer summer blockbusters from big studios, while they are understandably bullish about the growing capacity of small producers to do high quality storytelling. Not only do the “big boys” in the news industry have good content to offer, the particular kind of good content they have to offer–expensive, investigative reporting–isn’t being replaced by the small producers as the distribution costs drop. That’s because the cost of that reporting isn’t on the distribution side; it’s on the production side, in the form of reporters’ beat expertise, time and travel. Micropayments won’t cover that.
I don’t know enough about film to know if Mike’s vision will work for them. But I know enough about journalism to know it won’t work for us.
The fascinating thing about the media wars is that all sides see reality as supporting their cause. Take the election/protest story coming out of Iran this week. New media activists are overjoyed to see Twitter playing such a key role in mobilizing people and getting words and images from the protests out to the rest of the world. But, as a BBC reporter pointed out to me this week, the protesters are most concerned with making sure their efforts get on big outfits like the Beeb.
Here’s an obvious question no one is asking: how many new media startups actually HAVE staff reporters out there covering this? As far as I can tell, zero. Yet instead of admitting that they don’t have the institutional strength required to operate in places like Tehran, the bloggers are harping on the MSM for THEIR lack of coverage. It’s been thin, admittedly, but so far the outfits doing seriously awesome work on this–the NYTimes and the Atlantic–are seriously mainstream, despite Andrew Sullivan’s attempts to cast himself as an upstart. Sullivan, to his credit, has backed down from his rage.
Unfortunately, as Megan McArdle admits, the further we go into the media apocalypse, the harder it will get for even big institutions to support foreign bureaus. Increasingly, “there are too few journalists in too few places to cover a big story like this.” If we can’t be on the ground to cover stories like this, haven’t we failed at our most essential mission?
The nonprofitization of journalism continued this weekend with the decision by the AP, a nonprofit that serves for-profit papers, to get its content from other nonprofits and gift it to papers for free. This is a break from the AP’s old practice of effectively selling content to its members by charging them membership fees.
The only people now willing to fund reporting, it seems, are niche nonprofits and most have an ideological agenda. This is fine when you are consuming their content on its own terms: I know when I read The Nation that I am getting a liberal take on life. But when cause journalism is aggregated by the AP and then passed off as ideologically neutral to the country’s mainstream papers, I worry.
Moreover, as I’ve outlined before, these small cause outfits usually fund the hard costs of reporting but not the careers of full-time reporters, which means all of us take up jobs in non-journalistic fields to pay our bills, slowly eroding our journalistic expertise.
Faced with the challenge of financing their own reporting OR EVEN financing the AP membership rate, it makes short-term economic sense for newspapers to rely on free content from nonprofit newsrooms. But in the long-term, it does nothing to solve the core problems. To the extent that local papers–the AP’s members–are supposed to revive themselves by focusing on what they know best (their local communities and their relationships to readers)–outsourcing MORE of their content to people with national agendas hardly seems helpful. Most importantly, how can newspapers tell the reading or advertising public that their content has value when they themselves are willing to pay exactly $0 to fund it?
Like many things now touted out as solutions to the media conundrum, the decentralized gift economy strikes me as a gift that keeps on taking.
For almost a year, I’ve been writing about the transformation of the news industry in a running series called the Apocalypse. But for several recent posts, that series has been more about the good than the bad–is it possible that we’ve now turned the corner from the death of the old to the birth of the new?
To recap, my vision of the new is of the melding of establishment and startup media into vertically integrated but streamlined wholes. And there are ever-increasing signs that this model is emerging. BusinessWeek’s new project to get its blogs into more serious journalistic shape is one good move. But the big news is this: Ezra Klein, perhaps the poster boy for citizen-media and partisan blogging, has joined the establishment, migrating from the American Prospect to the Washington Post. This supports another of my hunchesthat the WaPo company would be the first to arrive at the new content structure.
Here’s the killer punch: Klein rejects the knee jerk “citizens are better” ideology of many of his old confreres and admits that he’s doing better service to the public as a WaPo reporter than he ever could have done in TAP. Working at the Post, he says, “adds on a different level of responsibility.”
All of this, however, doesn’t take away the core problem, which is funding this mess. For that, all we have to rely on is humor:
Exhibit B: After cautioning against the takeover of politics, media, etc by individualists over institutionalists, I am overjoyed to see the Fast Talker–a citizen-media enthusiast and individualist liberal-tarian at times–taking my side. What woke him up? A glimpse at the individualist Rightin David Cameron, and the damage the Tory bashing of MP’s expenses has done to his party–Labour–in the lead-up to this week’s local elections. Here is the thing: To turn the tide for Labour, British lefties have to develop a defense of institutions, and that includes many institutionsthat the individualist Left likes to rail against. Liberal-tarians whining about corporate bonuses sets up a conservative critique of big government. Both kinds of whining need to be given up, but the cultural tide towards individualism in both left- and right- leaning circles makes that unlikely.