scarcity in the time of abundance
september 2, 2009
By Tom Wheeler
There is an increasing drumbeat from the print media about moving Web-based content behind a pay wall to protect it from Internet predators linking to it.
That seems like a retreat. After a few years of trying to figure out journalism in the Internet era of abundance, publishers appear to be pulling back to the tried and true, “I control what’s news, now pay me for it.” It’s a shame, and hardly the kind of vision that the great publishing pioneers exhibited when they were confronted by an earlier electronic information network.
Samuel F.B. Morse tapped out his immortal telegraph message, “What hath God wrought!” in 1844. Within four years, six New York City newspapers banded together in an Associated Press to send reporters to the field and share the stories they wired back. It changed the business of journalism. Instead of being content to cover purely local stories, newspapers now stood astride a flood of new information from around the nation and, with the laying of the trans-Atlantic cable, from across the sea which they sifted and sorted for their readers.
Making sense of volumes of information has always been the job of newspapers. Yet as the Internet opens the news floodgates even wider today’s publishers seem to be walking away from the transformational opportunity presented by the growing torrent of information. Today’s network doesn’t merely replace the delivery boy; it changes the nature of news. The Internet is the 21st Century’s equivalent of the telegraph’s quantum increase in information. As did the newspaper giants of old, it is an opportunity to recast the nature of journalism.
Full disclosure: I am co-founder of SmartBrief.com, 110 targeted and filtered news briefs that are delivered to 2.7 million subscribers in more than 60 industry verticals and topical horizontals.
The company is based on the fact that while the Internet continues to expand the amount of information that’s available and accelerate the speed of decision-making, the reader’s time to assimilate information remains constant. What I can’t figure out is why, while aggregating the news, filtering it by topic, and presenting it for quick consumption has always been the role of the news editor, traditional publishers have retreated behind walled gardens rather than applying their aggregation and editing skills to this new opportunity.
Perhaps it is a reflection of the fact that the old media’s principal asset was never news it was scarcity. Not everyone could buy newsprint by the boxcar or ink in 55-gallon drums. This limited the number of outlets that could be easily monetized. However, the world of media scarcity no longer exists. Today, everyone pays for the digital equivalent of newsprint when he or she pays for Internet access.
Today, however, the digital world is based on “unscarcity.” In this new environment distribution is essentially cost-free, and so anyone can be a publisher. Earlier in the life of the Web, blogs resembled Hyde Park Corner, soapboxes for anyone with a voice. Today many blogs have become thoughtful sources of information in specialized areas that are largely ignored by the print media and thoughtful sources of ideas from those who don’t buy boxcars of newsprint. Yes, some are a less-than-attractive throwbacks to journalism’s roots as gossipmongers and political propagandists, but this multiplicity of voices is the network-driven revolution in journalism. Abundance is where the future is; not retreating into old media model castles as the walls crumble and the moats evaporate.
Clinging to the comfy economics of scarcity by moving content behind pay walls won’t bring yesterday back. Interestingly, the yesterday of the telegraph network revolution was one of taking advantage of the new abundance of information. Competitors even shared newswire reports that they repackaged in order to monetize the information. Somewhere along the way (perhaps it was with the rise of one-paper towns in the second half of the last century), the creativity that repackaged commodity information into a profitable enterprise disappeared and the exploitation of scarcity took over.
We now live in a world where the fact that the electronic media make it is possible to know a piece of information means that it is necessary to know that information. There is a need to apply the traditional editor’s role to the expanding torrent of information on the Web. The old scarcity media model was based on the editor’s ability to define what news was. The new “unscarcity” media model means that the editor no longer decides what is news, but helps the consumer deal with a flood of information.
This is a cultural shift for the news business, not just an economic shift; but like the days when the telegraph changed the business, it is a shift that represents opportunities. While publishers argue that, “Quality journalism isn’t cheap” (which is true) the answer isn’t, “I’ll shut down online access unless users pay.” We heard Hollywood cry that the VCR would be the end of the movies; then it adapted and now reaps huge revenue from home video. The same opportunity exists for publishers who see their business as meeting the needs of information consumers rather than locking up the information they now have.
It’s about re-aggregating that which technology has disaggregated and dispersed. Some of these new products may even charge for their particular services. Fortunately, not all publishers are sequestering their content behind pay walls. The Guardian in the UK keeps its online content accessible while experimenting with a subscription-based “club” where users have access to additional information. The Pittsburgh Post-Gazette is blending new content with social networking in a blog-like subscription service. The Financial Times is using free online content to identify and attract those who use the FT frequently; they allow linkers 10 free accesses per month before charging.
“Unscarcity” has redefined the media business. Instead of longing for the return of the Good Old Days of “It’s my content and you’ll pay for the privilege of knowing it,” the horizon is full of opportunities for media leaders who seize upon virtually cost-free distribution, welcome the plethora of voices that creates, and bring their editorial skills to a world deluged with information that needs to be quickly sorted and delivered on the reader’s terms. The name of the game is how to make money out of abundance, not how to maintain scarcity.
Tom Wheeler is Managing Director of Core Capital Partners, a venture capital firm specializing in early stage companies, including next generation wireless services. For almost a dozen years prior to joining Core Capital he was the president of the Cellular Telecommunications & Internet Association.