Wednesday, January 27, 2010

Pay-walls, News and the Public Interest - Does Journalism Exist?

Just read a brilliant lecture from Alan Rusbridger, Editor of the Guardian, "Does Journalism Exist?" in which he eloquently and diplomatically covers the major points and concerns facing the newspaper industry as it finally wakes up to the digital era. I've blogged some of my thoughts on newspapers before (and it seems this blog is going to be my main forum for media analysis now), however Rusbridger's lecture inspired lots of new thoughts.

I am so glad that a major media voice has finally challenged Murdoch's awful idea of pay-walls, and his evangelism for the 'end of free'. Rusbridger makes a neat argument about the short-sightedness of Murdoch's attacks on the BBC, and points out the hypocrisy the his media empire also expanding into free content, while simultaneously criticising it. In response to News Corp's demands for pay walls from everyone, Rusbridger concedes "There is probably general agreement that we may all want to charge for specialist, highly-targeted, hard-to-replicate content. It's the "universal" bit that is uncertain." I think he is referring here to the success of the Wall Street Journal charging for online subscriptions, yet it needs an important caveat. The market for specialist, highly-targeted, hard-to-replicate content is contingent on that content being uniquely valuable when it is not shared. For example with the WSJ, financial insights are more valuable the less other people have them. In fact, in the reputation economy online, the reverse is true - you gain value from sharing information, not with-holding it. Online there are many specialist communities creating highly targeted content for themselves that are not turning a profit, and probably wouldn't dream of making themselves exclusive through paid access, because there is little value to being the only one with the content, hence no one would pay for it. There would seem to be few cases where content or information access gives such a competitive advantage as in finance (commericial scientific/medical research perhaps, but thats another issue altogether). Most endeavours are more successful and productive when information is shared. So other then a tiny handful of examples, I don't think there is much of a future for the pay-wall model.

Of course this all neglects the fact that pay-walls just won't work anyway. Has Murdoch not heard of 'Copy - Paste'? In the current link ecosystem which the papers like to whine about, if they block the content with pay -walls then people will just move it onto their own sites. It only takes one person with access. As has happened with music, tv, movies - basically all other content, all of which is actually harder to copy then news (text essentially). The only way to prevent this would be an aggressive course of litigation, suing the customers that share, and we've seen just how successful that strategy was for the MPAA. Pay-walls just won't work Murdoch - let it go and move on!

Rusbringer uses a great term for the newspaper business model that is currently crumbling- "the Walmart-Baghdad subsidy theory – that it is retail display advertising that pays for the New York Times Iraq operation, not the readers." So why doesn't this model translate online? It's simple, online advertising has better metrics then the old system and can be much better targetted, offering vastly greater value for money to the advertisers. In the past advertisers had to saturate the market with their message to reach the right people, and newspapers where essentially soaking up the excess to cover the costs of the important stuff they wanted to do. Now, advertisers can target so specifically, they don't need to be wasteful, and there is vastly less excess value for funding the rest of the papers' 'public service' activities. One way to consider it is that corporations were indirectly paying for the public service of information dissemination. The corporate mindset is notoriously callous about the public interest - they only care for it when it's also directly in their interest, and newspapers where a handy way of making them pay for something they otherwise wouldn't have. To play devils advocate for a moment - so in the emerging cultural space, if corporations are better able to target their sales, at reduced costs, then it seems only fair to increase taxes on them, and funnel the revenue into the production of news in the public interest. I don't mean in the form of bigger budgets for public broadcasters, but in tax breaks for the individual - for the citizen journalists that are picking up the slack for the media empires, and doing it for free. Surely they should get a little something for their efforts.
I'm not saying this is necessarily the way for the news industry to move forward, but I think its an interesting angle to consider it from.

Phew, that will do for now. :P


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