sometimes things get worse
There are many tics of contemporary debate that bother me, but none more so than the enforcement of optimism. To participate in our webby conversation is to be buffeted, over and over again, with the insistence that all change is good, and that anyone who differs from that orthodoxy is a vile creature. Take, for example, Wired editor and serial plagiarist Chris Andersen’s (capital-F, natch) “Free” argument and those who would enforce it.
Let me preface all of this by saying that there is no more destructive and self-serving aspect of the Very Serious mindset than the belief that what they prefer to happen is inevitable, and that anyone who disagrees with them is merely a dead-ender, some poor reactionary soul who can’t change with the times. You see it all the time. It’s just rhetoric, just a way to try to gain the upper hand in an argument when you can’t actually argue your way there. People actually do have quite a bit of agency, you know? We might be able to prevent, I don’t know, a meteorite from destroying civilization. Maybe not. We are certainly in charge of the organization of our own media and news industry. Inevitable, when it comes to things determined purely by human behavior– political, economic, social, whatever– is never actually inevitable.
I find this post by Matt Yglesias to be disappointing. Yglesias, member of the never-ending new media mutual admiration society that he is, has to take the time to make a crack about the Wall Street Journal and those old media dinosaurs.
Once upon a time, a media business—whether it charged a nominal price for content (newspaper) or not (broadcast television)—could take advantage of massive barriers to entry to generate monopoly rents. That then created not only big money for owners, but also a huge surplus that could be thrown around in all kinds of goofy ways (Roger Cohen informs us that he was once reprimanded for flying business class to South America on the grounds that “The Wall Street Journal flies first class”) that were fun for the key stakeholders in the industry.
Cutting! You know what those high profit margins allow the WSJ to do, besides keep its reporters in luxury? Send them to South America! Let me all techno-utopians in on a little key fact: good journalism is expensive. Yes, it’s true. It costs money to have a London bureau. It costs money to dispatch good reporters to Iraq or Indonesia or the Arctic Circle. I have heard so many Pollyanna-ish notion about the collapse of the print news media that I can’t keep track of them. “Oh the New York Times is gonna fold, but hey! Talking Points Memo….” You know what TPM isn’t going to do anytime soon? Be able to fund a system of international bureaus that offer on-the-scene reporting about international events. Deadspin isn’t about to start sending out beat reporters. Oh, they’ll snark and snort and gibber about the dinosaurs at the Washington Post and their outmoded models, all the while using the Post‘s reporting to generate their own content. But they won’t replace that content, not ever. Yeah, I agree, it seems like the newspaper industry is doomed. The idea that everything that newspapers provide can be replaced by blogs is nonsense; the idea that nothing that won’t be replaced isn’t valuable, disgusting. News, actual, real, reported journalism, is important, for any free and just democratic society, and those who deny that we will lose anything of value are either blinded by optimism or profiting by saying so.
Chris Godin apparently imagines this post to be a response to Malcolm Gladwell’s review of Free in the New Yorker, but honestly, I see no evidence whatsoever that the man actual read Gladwell’s piece. What paragraph of that piece, dear reader, actually amounts to a refutation or attempted refutation of a single one of Gladwell’s arguments? Pray tell.
Tim Lee’s response, meanwhile, needs to be read to be believed. Let’s take a look. Tim: the fact that you believe something to be true does not mean that it necessarily is true. The fact that you assert that it is true is not sufficient for people to believe that they are true.
First, when Anderson says “eventually the force of economic gravity will win,” he means eventually. So citing YouTube—a site that’s been in business for barely four years—doesn’t prove anything. Lots of Internet startups lost money for four years and then went on to make a killing.
Ah! Eventually! Well, if you add that qualifier, I’m supposed to… what, exactly? I find that argument plausible but unconvincing. I certainly don’t see anything resembling either a deductive argument for why it has to be true or a evidentiary basis for why it will come to be true. What, exactly, is “eventually” supposed to do for me? This is the way of all futurists: every argument boils down to “you’ll see.” That’s not good enough. Not even close. Why will I see? Why is “eventually” allowed to carry so much argumentative weight?
Second, a lot of criticism seems to miss that “free” business models aren’t just about giving stuff away and hoping a miracle occurs. They’re about using free stuff to sell complementary goods. Obviously if YouTube just gives away a lot of free videos, as Matt suggests, that’s not going to make them any money. But their business model is to give away free videos and sell ads. This is a perfectly plausible business model that will almost certainly become viable in the next few years. YouTube’s primary costs are servers and bandwidth, both of which continue to fall in price at a prodigious rate. Advertising revenues have fallen somewhat in the last few months, but there’s every reason to expect them to pick up again when the recession is over. Therefore, the lines will cross in the not-too-distant future, and YouTube will become at least moderately profitable.
How are those free business models working now, though? Am I to take it that any consideration of current profit outcomes from these models is irrelevant? What trends do they show that demonstrates that these models will (yes) eventually be profitable? Where’s the evidence? Even if servers and bandwidth continue to get cheaper inevitably, people have to actually want to pay to advertise on sites like Youtube. The Web advertising business had actually started to head south before the financial crisis, if you’d care to look. Maybe Web advertising can support an industry of similar quality, profit, size and number of people employed as the old media could. I don’t know. My criticisms about the diffusion of advertising dollars that is both a feature and a bug of “Free” certainly stands, I think. These questions are certainly open. And yet saying the question is open is precisely what seems to be an unpardonable sin.
It’s important to note that Matt is absolutely right that these businesses may only be moderately profitable. As he says, this is precisely the point of free markets—forcing companies to compete against one another means better deals for us and lower profits for them. So if Anderson claims that “free-based” business models are going to be wildly profitable, he’s probably wrong. Many free-based business models will only be modestly profitable. But they’re not going to keep losing money forever.
If we can disagree about the kinds of profits we’re talking about, couldn’t we disagree about whether the “Free” economy as a whole will be profitable? If it’s reasonable to expect the “Free” media economy to produce markedly less profit than the old media, isn’t it reasonable to suggest that maybe much of the “Free” media economy won’t be profitable at all?
What’s especially weird about these arguments is that we’re surrounded by examples of Anderson’s thesis. The overwhelming majority of news and commentary on the web is available for free. Online services like search and email are free, and many of them are extremely profitable. Red Hat and MySQL (before it got bought by Sun) built extremely successful businesses around free software. For that matter, let’s forget the Internet and computers entirely. The 20th century radio and television industries, and parts of the newspaper industry, were built on “free”-based business models. It’s obviously true that companies can earn profits while giving away content. And basic economics tells us that we should expect companies that give their content away for free to gradually push out companies that don’t. So why is Anderson getting so much flack for pointing out an obvious and inescapable trend?
Obvious, inescapable, just true… and on and on. It’s breathtaking, really. This is not bad argument. It isn’t argument, but instead a series of assertions supported only by certitude and the kind of aggrieved attitude all futurists employ when people have the temerity to question whether their vision is really as pure and inarguable as they assert. Where is the evidence that search and email are extremely profitable? I’m not saying that there aren’t companies that are. But I’d like to see Tim Lee actually show me the numbers; hell, I’d like Tim Lee to demonstrate that he knows that empirical claims need empirical evidence.
Well, OK, here’s some assertion of my own. That’s the convenient thing about argument by assertion; it’s as good for the goose as it is for the gander.
Here’s what’s going to happen: the print media and news industry probably will collapse. We’ll be a less informed society, with more opinion-based news, more analysis, much of it of high quality. But we’ll have a lot less actual news, actual worthwhile information about the world around us. And it will hurt our democracy. Meanwhile, some people, like Chris Andersen, will be successful in the “Free” economy. Many won’t. And the new free media won’t come close to matching the number of people employed that the old media did, and this country will be facing yet another vanished employment stream.
It’s an argument. It’s what, if pressed, I’d suggest is going to happen. But I don’t know that I’m right, anymore than Tim Lee or Chris Godin or Chris Andersen knows that I’m wrong. Of course, I don’t have the credentials of a Chris Godin or Tim Lee or Chris Andersen. (My ability to cut and paste from a Wikipedia article notwithstanding.) But that’s just one more facet of all of this– as Godin says, everyone will play. How long will the confident futurists of the “Free” movement keep from pulling rank or asserting expertise? We’ll see.