I just caught up with an older Nicholas Carr post from February on the possibility that micropayments might save the business side of journalism. Carr says that, as things are now, micropayments aren’t the answer. Patience is.
He spends part of his essay debunking the similarities people have tried to draw between the successful iTunes store and possible small-payment systems for news. You can’t apply the iTunes mentality to news articles, he writes, because buying a song is far different from buying a bit of news.
Most news stories, for one thing, are transitory, disposable things. That makes them very different from songs, which we buy because we want to “own” them, to have the ability to play them over and over again. We don’t want to own news stories; we just want to read them or glance over them. Hawking stories piecemeal is a harder sell than hawking tunes; the hassle factor is more difficult to overcome.
News stories are fungible, Carr writes, meaning basically that one is as good as another. That’s not the case with music, and that uniqueness lends songs value that articles do not have. On top of that, the news becomes outdated very quickly, eroding most of its value.
As a side note, Patrick Thornton has some good money-related arguments against the iTunes model that put another nail in that coffin. For a dose of the other side, Marc Glasberg, CEO of the micropayment/subscription startup Icents has some hit-and-miss arguments for such a payment system.
Micropayments may be out, but Carr believes that the days of people paying for news are not gone. They are merely on a market-induced hiatus.
Right now, “supply so far exceeds demand that the price of news has dropped to zero.” This, Carr says, is a distortion in the news market, caused by the massive impact of new online technologies. Carr writes:
Now here’s what a lot of people seem to forget: Excess production capacity goes away, particularly when that capacity consists not of capital but of people. Supply and demand, eventually and often painfully, come back into some sort of balance. Newspapers have, with good reason, been pulling their hair out over the demand side of the business, where a lot of their product has, for the time being, lost its monetary value. But the solution to their dilemma actually lies on the production side: particularly, the radical consolidation and radical reduction of capacity.
Once the world of journalism shrinks enough, it will become profitable again, Carr argues. Then the users had better watch out! The producers will regain their power and show us what’s what — by prying open our wallets.
Carr dismisses writers like Clay Shirky and Jeff Jarvis, who argue that something has changed significantly and irreversibly about the way people find and consume news. For Carr, the crisis affecting the news business is a temporary affair, the good times will return. It’s just a matter of time.
To say that things will recover from this market slump in more or less the same form as before the communication revolution is the same as saying that the academy shook out the same way after the transition from oral to literate society. It’s the same as saying that books held the same power after they could be cheaply mass produced as they did when they had to be laboriously copied by hand.
The Web is mainstream (to use a sexy phrase: it’s hit a tipping point), and its effect on the part of society that has access to it, and even on the people who don’t, is as fundamental to our culture.
This is philosophy, and it’s not directly applicable to journalism, true. But we can’t ignore the immensity of the current communications revolution. And it’s naive to think that things will go back to the way they were without significant change.
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