Newspapers are dropping like flies, and the shadow of the flyswatter is starting to darken the future of some of the bigger flies that remain. Trying to figure out what replaces newspapers and how to fund that replacement is a topic of much discussion these days. The topic is especially important amongst those who work or until recently worked at newspapers, and among those who are busily trying to replace them.
A newspaper is a mass media delivery system, not just a way to deliver news. All mass media are forms of communication designed to reach large numbers of people, so they have certain qualities in common. Any mass media needs to be cheap to access and easy to use, but most of all they must provide the sort of content that a sufficient mass of people want to consume.
That content may be informative, but to succeed in capturing the hearts of the people any mass media needs to be entertaining.
Today computers and the Internet mix all kinds of mass media content together into something new, a mass multimedia. Mass multimedia is different, not only because the new tools allow consumers to access a much wider range of content, but because those same tools allow anyone to contribute their own content to the stream of mass multimedia. Content production capability has spread beyond the control of a few publishers to anyone with the urge to communicate, and an enormous number of people have that urge.
Technology has always driven mass media. The delivery system is what distinguishes one form of mass media from another. The printing press made the first mass media, distribution of text and still pictures, possible in the form of newspapers, magazines, and books. Over time, advances in technology have made new forms of mass media possible. When radio and records were invented, it became possible to distribute sound to the masses. Movies and than television added video to the mix, with magnetic tape and digital discs doing for the more complex audio/video signals what they, along with wax and vinyl, had already done for audio. Computers just take that a few steps further.
Each mass media format goes through a life cycle. First, someone invents the technology. Some early adopters start using the technology while it's still too complex and expensive to be a true mass media. Many of the competing implementations die out at this stage. But if it's destined to be a successful mass media, enough people use it to fund further development. The market gets large enough to drive competition, and that improves the service and brings prices down until the media is accessible to almost anyone.
Eventually, a new mass media format comes along, and takes away some of the market for the older media. Population growth or improved technology can make up for some of these losses, at least for a while, but sooner or later the new eats away at the size of the old.
Television, for example, significantly reduced the market for movies and radio.
Up to now, we have yet to see the death of a true mass media format.
Newspapers may be the first to go because of their unique properties. Newspapers, unlike most other forms of mass media, depend on distributing a physical object quickly and cheaply. Each newspaper is intended to be disposed of once it's used, which reduces the perceived value and creates waste and the costs associated with waste disposal. Unfortunately for newspapers, everything else in today's world is delivered as data over the air or via wire. Delivery of television and Internet data happens at the speed of light, and is almost free. Newspapers can't compete on speed and their distribution depends on resources that are relatively expensive and are only going to get more expensive, so they can't compete on price.
Newspapers also depend on a literate user base. You need to be able to read in order to use a newspaper. You don't need to be able to read in order to listen to audio or watch video.
A newspaper still has a few advantages over mass multimedia. The entry cost is lower for the consumer. A single newspaper costs much less than a computer, or even a radio.
Newspapers are also much more portable than computers and they are simpler to use. But those advantages are going away. Computers are getting cheaper all the time, and you don't have to buy a new one every day.
Portable devices exist that allow you access to the mass multimedia. iPhones, Blackberries and their competitors have full access to the Internet and all of the content that you can get there.
Since you're carrying a phone anyways, using the same device for media access adds convenience.
So newspaper costs are going up and income, which comes mostly from advertising, is going down because fewer people read the paper. These factors combine to ensure that newspapers, as printed and distributed on sheets of paper, are doomed to extinction. The new mass multimedia will kill off other delivery formats over time, but newspapers appear to be the first to go. If you have a job printing or distributing newspapers, it's time to start looking for something else.
The remaining part of the newspaper organization, the part that creates and organizes the newspaper's content, still has value. But how much value? Will that value support the organization's continued existence in the mass multimedia environment once the paper version is gone?
In an economy, value is created by scarcity. In our economy, publishers monetized that value by selling the scarce attention of the content consumer to advertisers. In addition, the process of providing old mass media was complex enough that providers could make a significant profit by providing the publishing services themselves. The problem in today's mass multimedia environment is that very little in the publishing process is scarce, so there is much less money to be made.
For any mass media, information gets from the creator to the consumer through a six step process. The steps blur together a little bit, so it can be hard to make a strict dividing line between each step, but for the sake of discussion, the six steps are:
Creation, where someone creates the content
Publishing, where someone makes the content available
Distribution, where someone moves the content from the publisher to the consumer
Selection, how the consumer finds what he wants
Consumption, how the consumer experiences the content
Demand, the consumer's desire for the content
It all starts with the content. Computers make producing all kinds of content cheaper and easier for everyone, large corporations, small groups, and individuals. There have always been people who wrote or sang or took pictures and who wanted to get their efforts out to the wider public but could not. Now those people can make their product available. Some of it is crap, but some of it is just as good as the content that old media publishers used to select. The content wasn't available before because those publishers had limited resources. Those limits are gone.
Creators can get their product out to consumers directly and cheaply enough so they can provide it for free, as a sideline to the way they make a living.
Unfortunately for those who want to make their full time living as content creators, or whose content is so good for one reason or another that they stand out from the crowd, computers also make it easier to copy and distribute content without paying anyone.
At least for now, any copy protection or digital rights management scheme for content potentially valuable enough to be worth copying is doomed to failure. Those who copy can take advantage of the same technology and provide the copies directly to consumers, cheaply enough to make it unnecessary to be paid for the service. Almost by definition, mass media is desirable enough and common enough that the minor delay in distribution caused by the need to copy it from the authorized publisher really doesn't matter.
In old models, publishing and distribution were the difficult parts of the process. They were expensive to do and economies of scale were great, so few people could get into the business. Because publishing and distribution resources were scarce, that was where the money came into the system. Publishers and distributors controlled what consumers could see, and controlled the funding of the content providers.
As electronic media like television and radio became more popular, the publisher gained control over distribution. They had to build TV and radio stations, which were even more expensive, but once they built the transmitters, the new media made distribution much easier, and since broadcast bandwidth was scarce, options were limited and profits were high.
Since publishers got to handle the lion's share of the money, they could take advantage of that to keep as much of that money as possible. With the money came access and power that publishers could use to extend their influence and their ability to control more content.
Today, publishing is getting much cheaper. Publishing has two components, putting the content in a distributable form, and providing it to the distributors. Computers have made it much easier for content providers to format their own content appropriately for distribution. Writers can self publish articles or books, bands can record their own MP3s, and artists can digitize their own images. The production quality of this homegrown content may not be quite as good as if professionals were spending millions of dollars to package it, but most people won't care, especially if the homegrown content is free.
Many companies, like YouTube for videos, Flickr for photos, or WordPress for writing, find that the remaining part of publishing, posting it for distribution, is cheap enough that they can fund it through minimal advertising or some other method. They provide the service to the creators for free in exchange for the content.
Significantly, in order to keep costs down these new publishers do not provide much in the way of content selection.
Since publishing and distribution costs are so low, they can just throw whatever content out that they can get for free and get enough viewers to support their funding model.
Distributers currently have little power to affect mass multimedia. Net neutrality, the idea that anybody on the network has equal access to everybody else, is the remaining piece that makes it impossible for anybody to create scarcity. The ability to copy content and post it for access is useless without the ability to transport it. With net neutrality anybody can be a content provider just as anybody can be a content consumer. As all forms of media move towards using the neutral distribution path that is the Internet, distribution is removed from the decision-making processes of providers and consumers. Both sides pay for access to each other.
Once content is available, consumers search through the content to select what they want to consume. In old media, publishers hired editors to help with this by choosing what they would publish from the available content. This was great, as long as consumers were interested in what editors selected. Today people with lots of time on their hands can browse the enormous stream of mass multimedia and eventually stumble across items of interest. But most people depend on content aggregators to help them surf the Internet, taking on the role of editors and analyzing what's available, organizing it and providing easy access to what's important to the consumer.
The most basic form of an aggregator is an Internet search engine, like Google.
Consumers can use Google and other search tools find the content they want to see and access it directly.
Search providers can gather information about the searches and use that data to cheaply and automatically figure out what is most popular and make that popular content more readily available.
Other people create aggregators by manually browsing for interesting content or taking suggestions from other people. Then they make those selections available to the public.
Some consumers will spend time browsing amongst a number of sources to find what they want. Others will choose one or two major aggregators and be happy with whatever is fed to them, the same way people used to choose from what the few broadcast television networks provided.
Aggregators would like to be able to get you to subscribe to their service, but like everything else in the mass multimedia, the barriers to entry are so low that it's difficult to collect a valuable share of the market. They're left with the hope that they can gather enough attention to be able to sell advertising, just like everyone else.
The technology for consuming mass media is an important part of creating mass media. Mass multimedia requires cheap and easy tools to support content creation and consumption. Creators need all-purpose tools flexible enough to deal with whatever new information form that's necessary. This flexibility creates extra complexity, but for creators the benefit of having cheap and powerful tools outweighs the cost.
Successful consumer devices make things as convenient as possible. The ideal device has a simple user interface that makes it easy to do whatever functions the consumer wants most. The device also must be portable, like a cell phone, so the consumer can keep it with them and use it whenever they want to. An iPhone, Blackberry, or Kindle is a step towards that ideal, but there's no winner yet.
The size of these devices makes them difficult to control and compromises their output methods, especially the visual display. Content providers and aggregators can help with this by formatting their content to be more readily accessible on small screens. The options to connect these devices to larger screens and audio systems need to be improved so you can easily enhance the experience when you're at home or when you want to share the mass multimedia experience with others. The transition period is still going on, but clearly more than enough demand exists to drive the necessary improvements.
Consumer demand is the only thing that continues to be scarce in the new mass multimedia environment. Providers still compete for your attention because the only proven revenue model is advertising, whose value is based on the number of scarce eyeballs pointed at particular instances of content. But there is so much more content available that those eyeballs are spread very thin.
No individual mass multimedia content provider has an audience of the size that television networks or major newspapers used to have, so no one has the enormous revenue streams that those audiences used to generate. In addition, while advertisers want to force consumers to see their ads, there are limits to how intrusive advertising can be. Advertising is just more content and equally susceptible to inexpensive manipulation by others as any other type of content. If the advertising is too intrusive it will drive eyeballs away and encourage other people to provide the same content with less intrusive advertising, or with no advertising at all.
So some money continues to enter the system, but much less money than there used to be. The people who publish, distribute, and provide access to the content need less money than they used to because of the new technology so they can pull in enough money to support their services.
The people who want to make a living from providing content are the ones having the most difficulty.
Some content is for entertainment purposes only. If the old media publishers who provide that content go broke and we're left with only what people choose to provide for free or for minimal profit, that's okay. There'll always be plenty of people who will publish their content in order to attract people to their performances, or who get satisfaction from having people listen to their music or read their stories. Those people can keep the entertainment pipeline full.
In some cases, organizations will have an interest in self-publishing information that newspapers used to carry. Theaters, halls, museums, and other venues will make their schedules available so people will continue to go to the theaters. Sports leagues and artists will continue to provide stories about their activities to create interest. Those stories are very unlikely to be critical and unbiased, but there are plenty of interested people happy to provide reviews, analysis, and criticism for free.
What remains up in the air is how news will be reported. It's important that news continue to exist. An informed population is critical to our form of government. But news doesn't fare that well when competing with entertainment in a free marketplace. People need news, but they usually prefer to be entertained. So funding for news rests on an even weaker base than the flimsy base that supports entertainment.
Fast access to some forms of news is a critical advantage. For example, immediate access to accurate financial data is worth a lot of money. But financial news, in that sense, isn't really mass multimedia. The financial news that the masses who don't work in finance want to hear can be parceled out whenever it becomes available for free.
Governments and businesses and other organizations will provide some information about their activities, but without some sort of watchdog, that information will certainly be self-serving and not meet the interests of the population as a whole. That's just human nature.
Right now, there are still enough old media publishers around to provide most of the news content. Everyone else in mass multimedia is living off that content, but the old media publishers don't have a sustainable business model. When they die, how will we replace the news they provide?
Individuals, using the same sort of tools that make production of other forms of content accessible to anyone, can provide some news coverage. Even today, some news comes from people who just happened to be nearby with their camera when an event occurs. As more old media publishers shrink or disappear, some funding will become available to encourage individuals to report on events and post their information into the mass multimedia stream.
In some ways, this change would be a good thing. In the old media environment, the large news organizations had such a competitive advantage in getting the news out, that to a large extent what they chose to report on drove the news. And it's not like the large news organizations always discovered the truth or always reported the truth when they had it.
The problem with leaving news to individuals or small organizations is access to power. Old media organizations had the power to get access because of their size and financing. How will governments portion out access to important events like news conferences if there's an enormous increase in the number of news organizations?
How will we ensure the new smaller news organizations have the power to get the access they need?
News does have some advantage over other kinds of content in the search for funding. The value of mass multimedia information is correlated to its timeliness to the extent that you use it to relate to the rest of society. Most mass multimedia isn't all that time critical in of itself.
You can read a book or story or listen to music anytime you want to. The only way timing is important for entertainment content is if you want to discuss it with someone else. News is somewhat more time critical than other forms of mass multimedia not only because you might want to share it with others but because in of itself it is information about other people, information that might be useful to you, especially if you receive it while it's still fresh.
Still the time difference between direct access to important news and indirect access is not very great. The more important the news, the faster it is copied and distributed by other sources.
The value of direct access is small, but it's still there, so providers can make some profit from that.
Trust is also much more important with news that it is with other forms of mass multimedia.
If you listen to a new song, the fact that the song isn't any good even though someone told you it was doesn't cost you anything more than a little time. But people expect their news to be accurate, otherwise it's useless. What value it has disappears totally. Once a news organization develops a reputation for truth, people are more likely to come back, which makes it easier to sell the service.
Old media news organizations will continue to die out and consolidate until an equilibrium is reached where the newsgathering operation is small enough to be supported by the remaining income. Naturally, these limited resources will be focused on national news, since that has the broadest interest. There will be fewer outlets for national news, but that makes more room for alternative viewpoints to be heard. As the news focuses more at the regional, state, or local level, becoming interesting to fewer people, the news will depend more on content provided by accidental bystanders or by the digging of dedicated individuals. Some of these things will bubble up to become national news.
We're still in a transition period, and there's still no certainty as to how things will work out. Old media publishers still have time and a lot of power and money to help them in their fight to survive.
Old media has no interest in eliminating the new technologies, because they take advantage of the cost savings they create just like everyone else. If there was a way they could effectively make information harder to copy, they would. But they can't. All copy protection can do is delay things a little bit until someone figures out how to copy the content. Weak copy protection is trivial to defeat quickly. Stronger copy protection is so complicated that it drives customers to other providers, but not strong enough to protect the content from a determined person with the necessary skills.
One way old media could survive is to attack net neutrality. Net neutrality is essential to mass multimedia. People whose voices were not heard before can now reach anyone with access to the Internet. The fact that all this new information, along with existing content from major media producers, is cheap and easy to access is a significant benefit for the majority of people.
But people who want to protect old media businesses or increase their profit from mass multimedia need to limit net neutrality. It would be easy enough to do. The major Internet service providers would just need to get together and sell enhanced upload capabilities to a privileged group of publishers. Today's large established old media publishers would be their market. The old media publishers would actually have an interest in ensuring the service was expensive, expensive enough to limit the market for the enhanced service. All other potential providers would see their ability to make content available reduced. If the ability to access content is artificially scarce, that will drive content consumers, especially consumers of high-bandwidth content like video, to where the content is more easily available. The privileged publishers will get the lion's share of the advertising budget, and possibly even be able to charge for access to their content.
Government intervention will be needed to protect net neutrality. The government has already intervened to combat the attempts of Internet service providers to restrict certain filesharing protocols. Additional regulation will be necessary, or eventually the desire of infrastructure interests to enhance their profits will lead them to take advantage of their position to create levels of access to the Internet so they have something additional to sell.
Without net neutrality, power and money will shift back to those who control the infrastructure, away from the content creators and consumers. Both the content and the infrastructure to deliver the content are necessary for mass multimedia to exist. But if there was content with no infrastructure, people would still sing, or draw, or tell stories. If there was no content, there would be no reason for the infrastructure to exist.
From that point of view, regulation to protect the interests of the content providers and consumers makes sense.
One way of lubricating the process of getting money from content consumers to the creators would be a system of micro-payments. A micro-payment system would make it possible to transfer very small amounts of money, tiny fractions of a penny, so payments can match the actual, minuscule, value of any individual transaction in the multitude that make up the mass multimedia marketplace. Those payments would go directly from consumer to creator to replace or supplement advertising as a way of funding content. Each time someone initiated a data transfer, whether to upload content to make it available or retrieve that content for consumption, the initiator would pay a small fee. Fees would be based on the size of the data, not the content, to keep costs in line with the actual resource utilization. The target of the data transfer would receive the fee, perhaps with some amount deducted to cover overhead costs.
Pricing per transaction would have to remain small and stable to allow consumers to continue to access the mass multimedia as they please, the way most people do today by paying a fixed access cost monthly to their ISP. Content producers couldn't charge more for popular content, but they would make more money by attracting a higher number of transactions.
There would still be room in the system for alternate funding, such as advertising. Though raising transaction prices wouldn't be allowed, some providers might choose to waive the micro-payments for the consumer in order to attract more customers, hoping that they could cover those costs through increased advertising.
A system like this would make it easier for content creators to enforce copyright and ensure the profits generated by the content get back to the creator. Since the consumer is only charged for the data he downloads, it doesn't matter to him whether he downloads the data directly from the creator or from an unauthorized copy posted by someone else.
This reduces the demand for unauthorized copies. With less demand, fewer people will bother to host unauthorized copies, and with fewer people hosting, it'll be easier to enforce copyright against those that remain.
A significant side benefit of a micro-payment system would be that the cost of undesired transactions, such as spam, would be borne by the spammer, and not by the infrastructure and the recipient the way they are today.
A successful micro-payment system would be an enormously complex system, much more complex than anything that exists today. First, there were a have to be a way of managing the extremely small payments.
Consumers would have to connect their credit card or bank account directly to the system so that they can transfer money automatically once enough micro-payments accumulated to make it worthwhile. The system would need to be much more reliable and secure than anything in existence today.
There would have to be a way to address what happens when transactions cross national borders. Those are just a few of the problems that would need solutions before a micro-payment system would be practical.
A system like this would be such a dramatic change in the way business transactions occur that there would need to be broad consensus that it was necessary before it could begin. The evolution of the mass multimedia marketplace may help create demand for such a system, but the changes necessary are so great that it is difficult to see how it could happen without government intervention. Enforcing net neutrality is the minimum regulation necessary. On the other end, we could nationalize the whole Internet infrastructure, set up an automated micro-payments system, and skim off enough overhead as essentially a tax plan to fund the whole Internet as a public good. If a micro-payment system does evolve, the structure would probably fall somewhere between those two extremes. But a successful micro-payment system, once all the issues were addressed, would support an economy where everyone, content providers, publishers, distributors, and aggregators, would all have a fair chance at funding based on their utility to consumers.
The current state of mass multimedia is unstable. Change will continue, with the winners yet to be determined. Maybe someday there will be a new type of mass media content, content that is expensive to create and cannot be easily duplicated. Then, the trends that are enabling mass multimedia and strangling the newspaper business and other old media could reverse. Perhaps a direct brain interface will make it possible to add touch and smell to the existing mass multimedia stream, creating something entirely new. That would create additional complexities that would make what we are dealing with today seem trivial. Who knows what the future will bring? Until then, the only certain thing is that fulfilling people's desire for entertainment will continue to be big business.