Notes on the creation of a new media landscape

Irrational Exuberance 2.0; or, What Price Content?

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“Mark Cuban Is Not a Big Fat Idiot–But News Will Still Be Free.”

So went a recent headline (by Michael Wolff, in his aggregationist Newser) in the increasingly ideological battle between rapacious Goliaths like Rupert Murdoch and the AP and such cool, webby Davids as Chris (Wired/Free) Anderson and Jeff (“BuzzMachine”) Jarvis. (I’d include the protagonists in the headline above, but Cuban is a tiny Goliath, relatively speaking, and Wolff is no kind of David at all.)

I like how the story of David and Goliath came out as much as the next person, but in the interest of the public good, let’s level the playing field a bit. (Disclosure: I used to work for the goliathan Time Inc. I work now for a David wannabe called

Start with the assertion in Wolff’s headline: “News Will Still Be Free.” Lots wrong here, including “News,” “Will” “Still”, and “Free.”

For journalists and their publishers, news was not, is not, and never will be free. Aggregation is not free either, just cheap. To consumers, on the other hand, news is free, at least sometimes, and always will be—on the radio and on TV, for example, and now on the Internet.

But people also pay for news, even on radio, TV and the Internet. It’s like water that way. You can dip a cup in a creek, or you can put a dollar in a machine, and in the general run of a lifetime, you will do both.

So what’s all the fuss about?

It boils down to this: People who spend large fortunes to gather news—like the AP—wish to get paid for it as they always have before, even though their business model has collapsed. To compensate, they propose not creative adaptation, not doing more or better stories, not improving the product they propose to sell, but erecting barriers to innovation, protectionist schemes.

Consider, for example, the AP’s new “tracking beacon,” which was explained in an internal memo announcing the new “Protect/Point/Pay” program to members. They are very excited about this new plan, as well as various proposals to modify U.S. copyright law to the AP’s advantage, believing they will ultimately “unlock enormous new revenue potential for the content industry as a whole.”

This form of irrational exuberance among the Goliaths is sort of the flip side of our recently burst financial bubbles—a hope, stubbornly rooted in denial, that the problems of the present and future can be solved by bubble-wrapping the past.

Arnon Mishkin, a sometime consultant to AP (though not on this, at least so far), recently explained the Goliath position in a thoroughly confused essay entitled “The Fallacy of the Link Economy”. In it he accuses the “blogosphere” and unnamed aggregators of “linking and scraping” all the value from the news, of harvesting all the eyeballs that would otherwise belong to the AP and thereby depriving them of precious traffic. The main benefit of this traffic, he says, is “the potential for higher CPMs”. Since CPM stands for “cost per thousand,” this statement is beyond confusing: It is just plain wrong. Maybe consultants should be free.

The AP’s main problem is not that aggregators are “linking and scraping,” it is that their member newspapers are leaking and sinking, dragged down by the weight of paper, ink and distribution costs.

As I’ve pointed out before, this is not the journalists’ fault, and as a recovering old-media type myself, I don’t like to dwell on what is.

Fortunately for all of us with a stake in this ongoing debate, Bill “Hitsville” Wyman recently did dwell on all that, without fear or favor. I have to confess I subscribe to just about everything in his case and his conclusions even though it stings, since I was once a prominent member of the corporate-journalistic world he so stingingly describes.

Wyman’s advice to media old and new is exactly right: “Don’t publish crap. Tell folks stuff they might not want to hear. Grow a pair.”

Arnon Mishkin unwittingly leads us to the moral of this story with some more consulting wisdom that should be free: “As the saying goes,” he writes, “people don’t check the news to read about the fire, they check it to learn that there wasn’t a fire.”

True enough. That’s why they “check” the news. But what will stop them every time, the news they will stay around for and read about, over and over again, is the fire.

Aggregation will always be free. That’s because it’s all about “checking” the news, all about the skimming, surfing, headless eyeball, which adds up to the commodity business of “impressions”. Advertisers who haven’t tired of paying for that soon will. Readers, users and other consumers have never been tempted to pay for that kind of news and never will be.

The heart of the news, however, has no particular desire to be free. The idea that it will be mistakes the real thing for the headlined link to it. This is the Davidic form of irrational exuberance—the idea that the Web, in all its magnificent innovative transformationalness, has erased the value of value.

No. The Internet has transformed story-telling, though, a fact of which publishers and other story-tellers had best do more than simply take note.

People will pay for the news of the day, just as they keep buying Dante, because they will pay for what they want and need, for what they know they should not live without, by which I mean rich, well-told stories about things that matter.

Some of those stories may be told around campfires or in personal blogs, from memory or imagination and out of pure joy or need. Others will be constructed out of words and images by creators who deserve to be paid for the labors of a life’s work.

Both kinds are essential to life. News is like water that way, too.

Jim Gaines

Twitter: @jamesrgaines


Written by Jim Gaines

August 17, 2009 at 7:05 pm

Posted in Uncategorized

2 Responses

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  1. I wish I knew where I saw this article, but I saw a piece about how content used to be free. Newspapers used to cost as much as the physical materials and labor to make them, no more. Information, content was always free in that sense.

    I have been using this as my sole argument against online content costing money, but your post makes me understand more what is happening. I understand that aggregating is not free, but it is cheap.

    At what point did content itself cease to be free? At what point should it cease to be free?


    August 19, 2009 at 12:39 am

  2. I think it should cease to be free when someone finds it sufficiently compelling to pay something for it–in other words it should be up to the consumer, not simply a collusion of law and economic self-interest on the part of content creators. Even in medieval times, roving troupes of actors took stories from town to town in France’s Vau de Ville. Villagers would pay them with food and lodging. That’s where the word vaudeville comes from.

    Jim Gaines

    August 19, 2009 at 2:24 pm

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