On the need to pay for content

September 27, 2009 | By | 8 Replies More

There has been a lot of talk lately about coming up withe new models of providing information, such that the consumers will “continue” to pay for content.    Not so fast, says Paul Graham:

Publishers of all types, from news to music, are unhappy that consumers won’t pay for content anymore. At least, that’s how they see it. In fact consumers never really were paying for content, and publishers weren’t really selling it either. If the content was what they were selling, why has the price of books or music or movies always depended mostly on the format? Why didn’t better content cost more? . . . Economically, the print media are in the business of marking up paper.

But don’t people pay for information? Only certain kinds of information:

People will pay for information they think they can make money from. That’s why they paid for those stock tip newsletters, and why companies pay now for Bloomberg terminals and Economist Intelligence Unit reports. But will people pay for information otherwise? History offers little encouragement.

[via Daily Dish]

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Category: advertising, Communication, Internet, Writing

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (8)

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  1. Niklaus Pfirsig says:

    Information wants to be free. Innovation comes not from closely guarded company secrets, but from building on the work of others.

    The entire internet exists only because of the free interchange and use of information.

    Some of the ideas that became the foundation of the internet came from phone and telegraph companies, from individuals like Boole and Jaquard, from a model railroad club, from amateurs, hobbyists, and professionals who saw a problem, conquered it and passed the solution along to others. Not for money, but for the sense of helping others.

    But there are those that have found ways to abuse the copyright and patent systems as a way to maintain monopoly power. Copyrights and patents were originally established to create limited monopolies to enable the innovator an opportunity to recoup investment and a reasonable profit from the innovation. For this reasons, copyrights and patents expire.

    Corporations have lobbied for the extension of copyright and patents, what such limited monopolies can be applied to and the life of these legal monopolies. This stifles innovation and enables the corporations, through armies of lawyers to enforce private taxes for decades.

    Don Lancaster describe the problem well in "The Case against Patents".

    Copyright protection has also been abused, particularly in the digital age.

    Here is a well worded essay on the problem .

    It;s not surprising when a multi-billion dollar corporation goes after a small business due to a misinterpretation of the arcane legalese in a software license as happened when Microsoft shut down Ernie Ball .

  2. Dan Klarmann says:

    I've been intending to post on the related issue of what content is worth paying for, and where is the world of information heading?

    Consider for a moment, who pays the creators of content? Composers, reporters, designers, writers, and other creative types invest considerable time in creating information or entertainment that did not exist before. In the old model, they were hired by publishing houses. As those fold, who will support them?

  3. Niklaus Pfirsig says:

    Dan,

    Who paid the publishing houses?

    I think the broadcast model is a good way to go. Commercial broadcasters have traditionally been advertiser supported and are themselves for-profit businesses.

    The programming content in those cases serves as bait to expose people to the advertising. Of course there was nothing to stop the media consumers from recording songs from the radio or programs from the TV.

    There are a lot of websites where you can legally download music. These are actually venues for great music and variety, in general, people are encouraged to donate money to these artists to encourage them to create more works.

    While the publishing houses would restrict themselves to the center of the bell curve to maximize profits, the direct to the people self-publishing that is available with the internet puts the choice of what is a smash or trash in the hands of the consumer, and makes available a much broader range of music available to the consumers.

    The same goes for video. A lot of dvd sales and streaming video now works on a subscription basis, and without the expense of maintaining the bulk distributing channels, there is still profit to be made.

    As for print media, the net wont replace books for several reasons, but the news is another thing entirely. News has largely been advertiser supported for ages.

    Basically there is a shakeout going on and it looks like the nuts that fall off the trees are mainly those who were profiting from restricting and controlling the content.

    • Erich Vieth says:

      Niklaus: I think we're entering a "Dark Ages" of news publishing, where the current scheme for monetizing the process is disintegrating and there is not yet anything to replace it. Good news reporting doesn't just happen; it's expensive to produce.

      I love Craig's List, for example, but I also realize that it's popularity means there is less investigative reporting at the newspapers that used to take at least a bit of the money the received for their high-priced want-ads to hire investigative reporters.

  4. Jay Fraz says:

    Erich : I think Michael Moore has stated one of our biggest problems involving our business models with newspapers is CAPITALISM:

    <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/ZFkbShik1L0&hl=en&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/ZFkbShik1L0&hl=en&fs=1&&quot; type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>

  5. dave says:

    Bushwah.

    Sorry, but Michael Moore is being selective about his facts (nothing new there). The reason that European and Japanese papers are "doing well" has mostly to do with a simple fact of geography and demographics: almost all European and Japanese papers are national in scope, while American papers are regional at best, mostly metro. This means that European papers have a much wider base to sell to: 60 Million Germans, 35 Million French, etc. In Japan, it's even richer: 130 Million Japanese are all divided into about three papers: the Yomiuri, Asahi, and to a smaller extent, the Chunichi. This provides a huge demographic base from which to draw. Note how the US "national" papers are actually doing fine: USAToday, NYT, and WSJ.

    Most Euro and Japanese papers also enjoy a very close relationship with their respective governments. This provides a steady stream of content that cna come only through the papers– and to that Moore is right: these papers have content their citizens want. Note, however, that there are far more efficient, transparent, and more productive ways to get that information, but Euro and Japanese papers tend to protect their monopoly on such govt-sourced information, to the ultimate detriment of the citizenry.

    Gotta love the populist anti-capitalist rhetoric from a rich person, though.

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