“The easy Internet ad dollars of the late 1990s enticed newspapers and magazines to put all of their content, plus a whole lot of blogs and whistles, onto their websites for free. But the bulk of the ad dollars has ended up flowing to groups that did not actually create much content but instead piggybacked on it: search engines, portals and some aggregators.
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But things have changed. “With newspapers entering bankruptcy even as their audience grows, the threat is not just to the companies that own them, but also to the news itself,” wrote the savvy New York Times columnist David Carr last month in a column endorsing the idea of paid content. This creates a necessity that ought to be the mother of invention. In addition, our two most creative digital innovators have shown that a pay-per-drink model can work when it’s made easy enough: Steve Jobs got music consumers (of all people) comfortable with the concept of paying 99 cents for a tune instead of Napsterizing an entire industry, and Jeff Bezos with his Kindle showed that consumers would buy electronic versions of books, magazines and newspapers if purchases could be done simply.”
Lincoln, Darwin, and the Penny
February is the cruelest month. It is also the month of my birthday, and other brilliant people like me, Lincoln and Darwin to name two. I’m sure there are plenty of other stupid people too.
Recently Walter Isaacson, now there is a segue, wrote a piece in Time magazine about saving newspapers. Good thing he wrote it too, Time magazine was all of 56 pages, I guess getting a ringer in can keep the team in the game.
He traces the development of media online, from the early days as magazines and newspapers tried to figure out how this was going to work. All of them ran up against what I have called the TV mentality, or the idea that what is on the screen should be free, or monetized by advertising. I think there has been a confusion between the ideals of the internet, that information should flow freely and be universally accessible, and how it has turned out, the conflation of the TV mentality with the idealism of the internet. We are stuck at the point where now the information itself is free, because the TV model of advertising supported content has failed online. You can thank Google for that failure as Isaacson observes, by making ads ubiquitous and essentially meaningless the value of those ads is driven down, as is the available pool of advertising dollars.
Notice the distinction I am making, the internet is not, I believe, about making ideas “free” from an intellectual property standpoint. It is about making access universal. The internet was invented by scientists for communication. The ideas that were being shared were paid for by colleges and universities in grants and endowments. What appears to be a Star Trek universe without money and everyone doing what they are supposed to be doing for “The Enterprise” is nothing but. (see what I did there?) The only way that research gets done is that people who are free to work where they want to work are paid in money which is the tool that makes it possible. Even pure research eventually gets monetized, thank goodness for my space pen that writes upside down!
So we have a confusing set of behaviours. We want to encourage freedom of access to information, as in a library. We are going in with the freedom of browsing as associated with the television. The internet is like a Library turned into television. There was never more confusion in school than when the Library was involved. No one understood the arcane language of attribution and citation, the latin shortforms cf, ibid, etc, and the fact that you couldn’t just copy whole cloth out of the encyclopedia for your term report. But you could go borrow a book for free. So you can see there the tension between the Star Trek world of pure ideas and altruistic behaviour and the capitalist world of citation and plagiarism. Just how are we supposed to behave?
The internet takes intention and makes attention-a shopping mall takes attention and makes intention-
You can browse a library, a mall, and the internet. But they are not the same.
The mall and the internet are strikingly similar, both are highly organized around the pleasure of looking, and not being looked at, at least that we are aware of. The mall takes the concept of the market square, the commons, and tweaks it ever so slightly from a public place of exchange for ideas, politics, art, and commerce, into a private space of commerce only. It is not the site of political discourse or free speech. The browsing function is enhanced so that the citizen becomes dissociated from the citizenry so to speak, they become passive buyers. The mall stimulates (or overwhelms, in the case of children’s breakfast cereals) your senses, feeds you, controls the climate, and allows you to sample (touch, hold, fondle) a variety of goods without feeling obliged to buy; big open doors, wide aisles, open merchandise. Hopefully the seduction entices you to buy. Attention is converted to a buying action.
The internet, conversely, is more like TV, it takes intention, the intent to do something, to go somewhere, (Microsoft, Where do you want to go today?) and changes it to simple attention, random browsing. The architecture of links is what does this. Before you know it, you are reading about Yak herding in Bhutan. It is more like the library in this case. Or Strand Books. Go in looking for one thing and come out with something different.
Now you could argue that the internet enables some buying activity, but in the case of music, it was a painful transition. The iPhone App store has been a breakout success. Subscribing to media however, has not taken hold. All we really want is to be held in attention. Don’t ask us for money. We can’t fondle the goods. We can only scroll and click. It is primitive. (Scrolls?) Speaking of fondling, you might locate the success of the App store in the pleasure of the iPhone itself, the Steely Dan of Trojan horses (I can’t believe I actually wrote that) as far as online buying goes. This is something Apple gets right in all of its products, the seduction of form. Apple turns attention into intention in all of it’s products.
Understand the behaviour, define the Marketplace
So the basic unit of the internet, the click, has a value that we have not yet figured out. It is a new behaviour. It is a kind of decision but it is the forestalling of decision. Channel surfing, web surfing. This is the problem. You can’t create a marketplace if you can’t monetize the behaviour. For now we have adopted the TV model wholly and simply- sell eyeballs and clicks back to advertisers. Apple seems to be on to something because they have transformed the “click” into the “Touch”-meaning they get how browsing is pleasure, and pleasure can be converted into purchasing action. But Apple is the aberration in the marketplace.
And the marketplace has been hijacked by the telcos as Isaacson writes:
“Another group that benefits from free journalism is Internet service providers. They get to charge customers $20 to $30 a month for access to the Web’s trove of free content and services. As a result, it is not in their interest to facilitate easy ways for media creators to charge for their content. Thus we have a world in which phone companies have accustomed kids to paying up to 20 cents when they send a text message but it seems technologically and psychologically impossible to get people to pay 10 cents for a magazine, newspaper or newscast.”
(Aside- Text messaging is the cell company’s dirty little secret. There is no physical reason why text messaging should cost anything. Text messages are routed within communications that the cell phone makes to identify itself to the network. It is part of the overhead, unused bits that pass regardless of the users intervention. That is why they have a maximum length, the size of the space available. There is no incremental increase in network load no matter how many text messages are sent. It is the opposite of actual voice and data traffic. Yet we pay for it. It is like monetizing your breath. There is no doubt that the telco’s are going to have to bear a share of the burden of change.)
Until we redefine our behaviour online, it will be difficult to establish a true marketplace. In that it looks like a traditional marketplace, it has failed. Meaning brand retailers and consumers. The real growth, the new behaviour, has occurred with what has been interestingly defined as “user generated content”, which reinforces the distinction between “us” the consumer, and “them”, the corporation. Blogs, Twitter, Facebook, Youtube, etc. I should be able to hang out a shingle and sell my content online. But in the absence of a true marketplace, this is difficult.
“Snark” media has managed to carve a very lucrative toehold in the dying carcass of mainstream-media. You can’t just grab a photograph from the NY Times online or Getty, write a funny comment and post that as “content” somehow hiding behind fair use. NYT paid for the wire photograph, so why should Gawker get to run essentially the same picture under the guise of criticism or commentary when really they are creating an whole other category, David Denby calls it “Snark” or at the very least, a funny diversion. If Jon Stewart does a piece lampooning an issue, you can bet they get clearance and pay for whatever they use. It is unclear what Gawker pays for and what it simply credits back without paying for. This is an example of how the TV mindset of selling eyeballs back to advertisers is failing online. The only way that the Gawker model works is if the content is free. They get to sell the attention back to the advertiser. Profit. One you have to pay for that content then you really are no different from a mainstream source, creating your own unique content with the associated “burden” of paying creators. Less profit.
In a true marketplace the online behaviour of browsing clicks and links would have value on some level other than as pure attention. As in a real marketplace, eventually you have to buy. It is a measure of how desperately we cling to the infantile pleasure of looking that we are so frustrated by online links that go behind paywalls! Just look at that angry face! Baby wants his toys! Why does mommy take them away! Grrr! Whaaa! Seriously, perhaps this is a function of a normal maturation process-we have been calling it web 1.0, web 2.0, so grownup! Really we have Web-Two-Year-Old. That is where we are. The web as playpen. Part of this is enormously creative, the play aspect. But eventually you teach the kids how to set up a lemonade stand at the end of the driveway. Ok so its not Darwin, but it is an evolution. (I was stretching for a title)
We find ways of paying for things all the time. Call it redistribution of income. Ouch! It comes in the form of tax law that gives breaks to small business, write offs for business purchases like subscriptions, and luxury taxes. There is also a vast pool of money contained in the simple rounding of our purchases to the next dollar. Banks are now starting to toy with working with schemes that capture that. The Lincoln Penny is powerful. Redirecting that money online for clicks is not unimaginable.
It may take the death of printed media to force a normalized online buying behaviour with respect to Newspapers and magazines. Or it might just take a simple tactile device like the iPhone to drive purchases. The Kindle does not seem to be there yet. I think the maturation is in colour, bandwidth, and form factor. And interactivity, although that has been poorly defined up until now. People seem to think that this “problem” is too hard, which I think is to ignore that the problem is simple, but our behaviour is immature. We have been caught up in a bubble of growth that was not sustainable. Time to pay.
The internet may also become partly a utility. We are already heading towards a world of utilities. Consumer banks will probably become like utilities, says Nassim Nicholas Taleb, author of “The Black Swan: The Impact of the Highly Improbable.” (interview with Charlie Rose). The chaos created by bank failures would be too great to allow the possibility of say, one day, not being able to get cash out of a cash machine. So we are moving towards a form of bank nationalisation. Add this to the other functions of a modern society that we have come to expect, healthcare (ok now?) law and order, and banking is obviously an essential service. The internet may be another.
Have I solved all the problems yet? I guess I’m saying there is no problem. Or no problems that a little upheaval can’t solve.
Made me walk away with somethings to mull over.