The death of Free

admission free(Image by Leo Reynolds, used under Creative Commons licence)

When Chris Anderson’s Free! article appeared in Wired at the beginning of last year, the financial crisis was still shallow enough for his thesis to look bold but almost plausible:

anything that touches digital networks quickly feels the effect of falling costs. There’s nothing new about technology’s deflationary force, but what is new is the speed at which industries of all sorts are becoming digital businesses and thus able to exploit those economics. When Google turned advertising into a software application, a classic services business formerly based on human economics (things get more expensive each year) switched to software economics (things get cheaper). So, too, for everything from banking to gambling. The moment a company’s primary expenses become things based in silicon, free becomes not just an option but the inevitable destination.

[…]

But free is not quite as simple — or as stupid — as it sounds. Just because products are free doesn’t mean that someone, somewhere, isn’t making huge gobs of money. Google is the prime example of this. The monetary benefits of craigslist are enormous as well, but they’re distributed among its tens of thousands of users rather than funneled straight to Craig Newmark Inc. To follow the money, you have to shift from a basic view of a market as a matching of two parties — buyers and sellers — to a broader sense of an ecosystem with many parties, only some of which exchange cash.

Wired, Free! Why $0.00 Is The Future Of Business (15 February 2008)

Journalism is more subject than most things to this downward pressure on price, and publishers put everything into the free model. Pretty much every local and national newspaper gives away their content for nothing online (bar the Financial Times, because as Clay Shirky points out, “financial information is one of the few kinds of information whose recipients don’t want to share”, so it’s also one of the few kinds of information that can be successfully paywalled).

In the free economy, newspapers are fully-realised advertising delivery services, their content (or “journalism”) functioning as the lure to get readers looking at the marketing material. But then, around the middle of 2008, a rumbling downturn became a full on recession. Fewer advertisers had the budget to subsidise journalism. Free had faltered, and the reviews of Anderson’s book have reflected the unkind conditions. Closures, job cuts and commissioning freezes sped up alarmingly, and Rupert Murdoch announced that News Corp would be charging for content.

There was a general feeling that Murdoch was making a mistake by going against the course of history. But, out of all the branches of media, newspapers and magazines have been unusual for their passionate embrace of free content. The music industry (at least in its major incarnations) has pointlessly fought and scrapped with its fans to get them to pay physical-object prices for digital products. But the games industry – even though it makes a product that’s almost as vulnerable to rip and burn as words and music are – has reacted more coolly.

Many developers have taken the line that a certain amount of piracy is inevitable and non-fatal. They use DRM, but don’t invest in it at the expense of their relationship with customers. They acknowledge that gamers can get other games for free. They acknowledge that the games they’re making are distributed illegally through P2P networks. But their marketing teams work hard to ensure that the company’s own portal is the one that gamers want to go to when they download the game, eagerly cultivating the loyalty of their customers. Newspapers and magazines could supply that sort of service.

But they can only escape the death-grip of Free if they offer something worth paying for. And, as David Simon pointed out, newspapers have been treating journalism as an avoidable expense for decades:

When you hear a newspaper executive claiming that his industry is an essential bulwark of society and that it stands threatened by a new technology that is, as of yet, unready to shoulder the same responsibility, you may be inclined to empathize. And indeed, that much is true enough as it goes.

But when that same newspaper executive then goes on to claim that this predicament has occurred through no fault on the industry’s part, that they have merely been undone by new technologies, feel free to kick out his teeth. At that point, he’s as fraudulent as the most self-aggrandized blogger.

Anyone listening carefully may have noted that I was bought out of my reporting position in 1995. That’s fourteen years ago. That’s well before the internet ever began to seriously threaten any aspect of the industry. That’s well before Craig’s List and department-store consolidation gutted the ad base. Well before any of the current economic conditions applied.

In fact, when newspaper chains began cutting personnel and content, their industry was one of the most profitable yet discovered by Wall Street money. We know now – because bankruptcy has opened the books – that the Baltimore Sun was eliminating its afternoon edition and trimming nearly 100 editors and reporters in an era when the paper was achieving 37 percent profits. In the years before the internet deluge, the men and women who might have made The Sun a more essential vehicle for news and commentary – something so strong that it might have charged for its product online – they were being ushered out the door so that Wall Street could command short-term profits in the extreme.

Reclaim The Media, “Wire creator David Simon testifies on the future of journalism”

The problem for print journals is that they’ve been exploiting Free stuff for a long, long time before Anderson offered it as the future. The lure of churnalism is that someone else has already done the work for you. Copy, pictures and editorial line all arrive without the expensive business of researching and reporting. This obviously works fine when it comes to maximising profits in a closed marketplace – but when the internet means that marketers can reach the public without needing to pay the newspaper as an expensive middleman, and the public can see that the same story is appearing in paper after paper, neither party is going to feel much need for newspapers.

That’s why it’s disingenuous for someone like Steve Connor to protest that his failings should be overlooked because commercial pressures make his own bad reporting inevitable. His failings perpetuate those commercial pressures, and means that journalism is increasingly likely to be a leisure activity of the impassioned or a tithe on the desperate and ambitious. Anyone who wants to save professional journalism – the kind of journalism that, as Simon says, “requires daily, full-time commitment by trained men and women who return to the same beats day in and day out until the best of them know everything with which a given institution is contending” – should be interested in cultivating better journalists.

4 thoughts on “The death of Free

  1. Oh, there’s some good stuff going here locally at the moment…

    http://www.blackheartcleveland.com/2009/06/30/connie-schultz-roundup-roundly-seen-as-epic-fail/

    One of our local paper’s columnists (Connie Schultz) is married to a U.S. Senator, and has been involved in a flap whereby it had been proposed that the government should regulate who could use original reporting for what and how long… follow the links, it’s crazymaking stuff. So crazy I can’t even concentrate on how crazy it is right now without my head hurting.

  2. You know, I am glad you brought up the music industry here. The band Radiohead released their most recent album on their own website and allowed people to pay whatever they wanted to pay for it, including not paying anything and simply downloading it for free. It was a choice. The band made more money than they ever had previously going through the record industry. This event is at least suggestive about so called “business models” in the coming technological internet era. Forcing people to pay, demanding people pay, seems less and less the way to go. Instead think about providing something people will feel loyal towards, something people will WANT to pay for whether they have to or not. The old economic models concerning basic human selfishness, however, aren’t equipped to take such models into account. There are some great interviews with top journalists about the future of journalism at http://www.ourblook.com/component/option,com_sectionex/Itemid,200076/id,8/view,category/#catid69 which I have found useful.

  3. Lovely post, Sarah – it’s like you’re actually making all the things I sort of vaguely think about into reasoned, coherent arguments, so that I don’t have to. Which is great, because I’m lazy.

    If I was one of those professors who sell pre-made formulas for the grumpiest day of the year to the newspapers, I’d say that this is roughly the model that determines how much most people* will pay for something:

    H x (D + L) x A = ?

    Where H is How much you want it, D is Difficulty of getting it for free, L is Likelihood of being arrested for stealing it and A is the Availability of similar things for free elsewhere. You’ll note that it means people will nick anything: I’d say that’s borne out by the evidence.

    *Not me, because I’m a law-abiding citizen.

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