Adding Value on the Internet
His plan: “Every business day I plan to post an annotated list of recommended readings, some generated that day and others that may have appeared in the recent or even distant past.” But he does not want to do a simple tab dump:
I am going to make an effort to get off the beaten path and find studies, reports and articles outside the usual places that many bloggers tend to cite and comment on . . . . [because] the heavy concentration on breaking news has, unfortunately, led to a sharp decline in long-form analysis. Mainstream publications don’t have the resources to cover issues in depth, except under special conditions, such as the BP oil spill, while bloggers clearly don’t have the time. This has created a vacuum, I believe, that needs to be filled. The sort of longer form analyses that one used to read in major newspapers and news magazines still exists; it’s just off the beaten track. It appears in publications from academics, trade associations, government agencies and international organizations. The problem is finding and disseminating them.
He makes the point that it was once difficult to find solid information, but that those who did get it were able to capitalize on it in some fashion, precisely because of its scarcity. “In that era, access to data conferred power and many economists made good livings simply because they had it.” However:
Today the easy availability of raw data and government reports allows anyone to do his or her own analysis. But because no one can “own” such things the way they used to, fewer people are willing to invest the time and resources to really understand them. I think this is one reason why we had an economic crisis; the coverage of things like the housing market, mortgage finance and other underlying causes by experienced reporters and analysts wasn’t as broad or as deep as it once was. . . .
My plan is to look beneath the surface and find in-depth analyses of topical issues that mostly escape attention. Reputable academics, government agencies, trade associations, think tanks and other institutions that still have the incentive and resources to analyze issues more thoroughly than bloggers or even major media reporters are able to do. Luckily for me, the Internet provides tools that make it possible for one person to do the work of many.
Digital Society does not normally speak fiscal, so the interest here is not so much on the specific topics that Bruce will cover (though he will certainly be a daily stop in my personal efforts to understand the world) but on his underlying rationale.
He is right: the fact that one cannot get a return on the investment required to obtain data and information and/or to chew it over and penetrate its mysteries is dumbing things down. Nicholas Carr published a new book yesterday called The Shallows: What the Internet Is Doing to Our Brains which expands on a point from an earlier article, Is Google Making Us Stupid?: “Once I was a scuba diver in the sea of words. Now I zip along the surface like a guy on a Jet Ski.”
The problem is stark. If collecting and analyzing information cannot be monetized in some fashion, then the incentives to engage in these activities will be minimal. Effort will be devoted to competitive aggregation, in which everyone tries to free ride on everyone else, devoting minimal resources to in-depth activity. Advertising is not the answer, because the business plan of anyone who expects to make money from aggregation is that they will be able to divert some of the clicks from people interested in a topic from the producer of the original material to the aggregator. Nick Carr again (he really is very good):
Wow. “A billion clicks.” “Millions of dollars.” Such big numbers. What Google doesn’t mention is that the billions of clicks and the millions of ad dollars are so fragmented among so many thousands of sites that no one site earns enough to have a decent online business. Where the real money ends up is at the one point in the system where traffic is concentrated: the Google search engine.
The FTC staff is catching flack from all ends of the political spectrum for publishing a staff report that raises the possibility of government subsidies for news gathering. The report has problems (stay tuned to this space), but much of the criticism is juvenile. If content users will not pay, and advertising won’t support news services because the revenues get siphoned off, then there must be subsidies from somewhere or there will be no news. Duh! Attacking the FTC staff for noticing this is truly shooting the messenger. Furthermore, whoever provides these subsidies will have an agenda. Double Duh!
So if you don’t like the consequences of the new free world, think of some alternatives. It ain’t easy. The system whereby information was scarce and could be monetized had many problems; there are huge gains in making data generally available where it can be analyzed by anyone who wants to, not just by some special priesthood, and no one wants to create artificial scarcity. And, as Bruce notes, the government already funds lots of data collection efforts, and universities and think tanks are in the information-as-a-public-good business. As Bruce also says, there is an important function here in terms of having someone knowledgeable cull through this product and bring it to public attention, with a professional gloss.
It’s almost enough to make one believe in a property-rights-based system: Information is not free to produce, at least good information isn’t, so reasonable charges designed to fund its collection are fair. So is a considerable level of exclusivity, as long as the information is available to all who are willing to pay. (There is something to ye olde doctrines of common carriage.) One of the ironies of the current tech world is that people are willing to pay billions for hardware, connectivity, and software, but squawk loudly at paying for the content that is the raison d’etre for these functionalities. Of course, the Jet Ski level of analysis of people like the Free Press does not help here.
It is also amusing that Bruce says: “I am primarily interested in things that are publicly available on the Internet and aren’t hidden behind a pay wall or demand onerous registration requirements.”
I urge him to rethink this one; one of the bits of information that I would find very interesting is whether there is a lot of material behind pay walls or registration requirements that outshines the free. For example, on the tech side, I much like GigaOm, which costs, I think, about $70/year. For technical tech with an investment twist, there is a reasonably priced Next Inning. The WSJ and the FT are worth their costs. There must be lots of others. From my point of view, I would much like Bruce’s opinion on which sites contain material that meets his high standards of quality and interest.
Hey, maybe Bruce can turn it into a business and charge for access – sort of like a fund of funds. I would pay for such access to his expertise. And let me tell you about the time in 2001 when I suggested to Eric Schmidt that he should charge for Google:
After a seminar last year, I met [Google President Eric Schmidt] and fell into a conversation reminiscent of Who’s On First. I said Google is a great search engine and it should make me and others pay for using it. He assured me that the company has no intention of charging. I responded that its value to me far exceeds the amount of a modest fee, and if the company charged then it could spend the proceeds doing even more good things, and I would get even more surplus value. He answered that I need not worry because they are making money from ads and other services and will not make users pay. I said I worried that they might not be making enough money.
He edged away, keeping a wary eye on this madman.