Reflections on This Week's Articles (Available Online for Free)

The articles we read this week nicely tie in a couple of things we’ve explored, including Picard’s first piece on journalists being overpaid and the notion of disruptive technologies. I think that Ghosh’s piece on Cooking Pot markets accurately depicts open source economics, and the value gained in reputation by contributing to them. Since the Internet’s roots are firmly implanted in open source and sharing information, I suppose it is no surprise that so much of the web is quote unquote free.

Of course, this stuff isn’t really free – our data, personal and behavioral, pays for it. But in order to make money you need lots of data and that means you essentially need a ton of users viewing your site. Google, Amazon, Facebook – sure, these companies traffic in data. The part I struggle with is what Gladwell I think rightly points to – namely how do you sustain things like journalism or the music industry when marginal costs drop to zero online, but the labor costs (paying journalists, compensating artists) remain in place. 

As we have seen, print sales and a few digital subscriptions subsidize the online free editions. Would a crock pot market approach work for news? Already, journalists are relying on Twitter feeds and other social media for some breaking news reporting. But admittedly, a completely open source approach to news is difficult to imagine, even with reputation of writing quality stuff as a form of currency. And yet, IMDb, to use Anderson’s example, has harnessed the free contributions of millions of users to build a massive and generally accurate database of the world’s movies. Could we imagine an Internet News Database (INDb) where users contribute articles for fun, with a handful of fact checkers paid through ad revenues? The luxury of IMDb is that it has no real competitors, but its strength is that it has also diversified by partnering with Amazon, which essentially buys the IMDb users so that it can market its products to them (streaming video, DVD sales, etc).

What strikes me the most is that when stuff becomes "free," attention becomes currency (as data), reputation and externalities become value, and content proliferates in a limited attention economy then competition becomes immense. You can make a movie (write a news blog, compose a song) on the cheap and distribute it online but so can millions of other people. At the same time, the market becomes fragmented – only some users will have time to see your movie (read your news blog, listen to your song). Since you need vast resources to invest into advertising your product so that it can reach the largest possible audience, most people will consume stuff with a lot of money behind it, or with an already established reputation. When you’re churning out free content for fun, such reputation can take time to build. So professional journalists should make journalism their hobby and focus on pursuing a more lucrative profession.