February 27, 2009
There's a sad irony to the information age.
At the end of the industrial age, we were declared to have entered into an information economy. But many are wondering if that word "economy" has proven too optimistic. It's true that as physical products are increasingly commoditized, economic value resides more and more in information.
But at the same time, the Internet has brought the imperative that "information wants to be free." Today's digital networks have made distributing information incredibly easy and cheap, and restricting information incredibly difficult. From an economic viewpoint, this makes it harder and harder to charge for information. The information economy eats itself.
Exhibit A in this season of discontent: the print news industry.
The Tribune Co.'s bankruptcy filing last year started the tremors and justifiable panic that the industry is nearing collapse. The Atlantic recently published a startling piece by Michael Hirschorn on the possibility of the NY Times going under in Q2 2009. This week the owner of the SF Chronicle announced the paper would be sold or shuttered.
On his Buzzmachine blog, BRITE 09 speaker Jeff Jarvis has been covering the first wave of newspapers that are shifting to publishing only online. But the price of journalists is not dropping at the rate of web servers (Moore's Law aids Google, but not The Times). Major news organizations cannot possibly sustain their current operations with only their web ad revenue.
In response, TIME magazine ran a recent cover story by Walter Isaacson, suggesting that print journalism might survive with "micropayments." In it, he asked, can we build an iTunes for the news?
Most observers say no. Clay Shirky blogged a rebuttal, pointing out that the history of the micropayment business model has shown nothing but failure for those attempting Isaacson's remedy. (Shirky also argued that the iTunes model could never work except in a monopoly. I strongly disagree with his analysis on that, but will pick that up in a later post.)
So, is it true that legions of bloggers – amateur writers, if you will – are threatening to bring down professional journalism, whose costs cannot compete with all this free talent?
Not exactly. A bigger source of competition, often overlooked, was pointed out by Michael Kinsley in a recent op-ed in the Times. Bloggers and new voices aside, the Internet has brought newspapers into vastly greater competition with *each other.* In the old days, writes Kinsley there was "no sweeter perch [i.e. monopoly] in American capitalism than ownership of the only newspaper in town. Now, every English-language newspaper is in direct competition with every other." How many readers will subscribe to Denver's Rocky Mountain News (the 150-year-old newspaper closes today), when they can read the Manchester Guardian, the NY Times, the Washington Post, or countless other top-notch English-language sources just as easily?
And yet, Kinsley is optimistic that journalism and professional reporting will survive, in a smaller (and I suspect, greatly restructured) industry. I recommend his article for a bit of sober optimism.
The upheaval brought by the Internet stems from increased economic competition that is endangering formerly parochial fiefdoms. Today, the stress of global competition is hitting the newsroom, just as it hit the factory floors of Detroit a generation ago.
Let's hope the next wave of professional journalism will bring a new dynamism and energy to its vital task. Creative destruction is painful, but it usually yields benefits in the end.
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