the Web has a lot less to teach the print media than you think
Andrew approvingly links to more schadenfreude directed towards the newspapers. And, yes, I call it schadenfreude. I don’t want to be hard on Clay Shirky, who talks about the negative consequences of the end of the print media. I just feel that he maintains the same attitude that I find almost universal in talking about the collapse of the print media: you say it’s tragic or sad, and you say it’s inevitable, but you also use the most condemning and judgmental language possible. It seems like everyone knows the newspaper is dying, everyone knows that it has negative consequences, but everyone wants to laugh and jape most of all. I can’t understand the career journalists who talk with such knowing disdain and casual disregard as their industry goes down in flames. Yes, everyone wants to appear with it and cool and ahead of the curve, but when you say that you value something and yet essentially cheer its demise, that’s pretty lame. Many journalists aren’t just whistling past the graveyard, they’re chortling past it. Perhaps I’m misreading, but I don’t actually see grim humor in the face of great sadness. I see a ton of people not wanting to be seen as one of the ones who didn’t get the memo. The fear of being someone who doesn’t realize his or her industry is dying seems a great deal more meaningful to many journalists than the sadness of the collapse of an at times great and much loved American industry. Better to mock the rubes, it seems, than to mourn the loss.
Here’s a time tested, reliable way to run a business: produce a product or service that people want to buy, and sell it to them. Here’s a business plan that isn’t a business plan: take what you always used to charge for, and give it away for free. Seems pretty simple, right? And yet in the late ’90s and early 2000s, newspapers were absolutely brow-beaten if they didn’t a) go online immediately and b) go online for free. Newspapers that even floated the idea about charging for their content, which they had charged for for decades, were mocked mercilessly. See the reception of TimesSelect. Before it had any opportunity to succeed or fail (and it did fail), people laughed off the very idea of charging for premium content. One of the lies of this whole transition that you sometimes hear has been that newspapers dragged their feet getting online, resisting the change and calling it a fad. Many didn’t, though, and in fact, many of them seemed to leap into the arms of the Web (assured, as they were, that not doing so would doom them to obsolescence) without much of a thought about what exactly that might do to the numbers of people who bought and subscribed to a daily newspaper. It was really quite strident, back then: you had to get your paper on the Web, and you had to offer it for free. Nobody seemed to care that this left out the part about how this exactly helped your business.
Shirky points out, as many have, that the real collapse of the financial model of newspapers came from the widespread availability of free classified ads. Which is true. But like many, he talks as if it matter of factly the case that Craigslist et al. are significantly profitable. That’s not actually certain, as best I can gather, and Craigslist plays it very close to the vest with its profit numbers. I certainly don’t think Craigslist and its competitors are making close to the aggregate amount of profit the nation’s newspapers did with their classified sections in boom times. So I can’t understand lauding the brilliance of Craigslist when they have in essense taken an established business model and rendered its profitability a tiny fraction of what it once was. And this general overestimation of the actual profit making potential of many Web-based businesses, rather than the name recognition, user base or stock price, is widespread. Some of the Internet companies generally regarded as the most successful, be it Livejournal or Facebook or Myspace or Twitter or even mighty Google have profits that don’t even come close to matching the perception of their size and success in the public imagination.
Many, many Web-based businesses that are regarded as successful and enjoy high stock prices rely almost entirely on venture capital–even now, after the dot-com collapse, during this vast financial crisis. I think the idea that the stock market in toto is just a giant Ponzi scheme is overblown. But when it comes to businesses whose profit models require extraordinarily optimistic outlooks, or who have no profit model to speak of at all, and yet continue to float by on a cloud of venture capital… well, I don’t think it’s unfair to say that something fairly stinks there. I mean, an article by Will Leitch in New York magazine says “When you ask Williams and Stone about revenue, they’ll… note that no one asked Google in 1998 how it was going to make money.” In an era where we are realizing the vast destructive power of creating wealth by imagining that it exists, this should give anyone pause. And when I read in so many different fora people contrasting the dinosaurs at the newspapers with the geniuses on the Web– when so many Web companies have no meaningful potential for internally generated profits and must instead rely on yet-more financing, and where even Google doesn’t enjoy the kind of huge profitability so many people casually assume they have– well, it drives me a little crazy. It’s nice to be able to read the paper for free. Paying for something you want, though, has a certain elementary logic to it, and as Shirky points out, the alternative is destruction. What I hope people realize is that this is not an affliction that only effects newspapers.