Home > News, Society > What do you do when what you sell becomes worthless?

What do you do when what you sell becomes worthless?

Alas, poor Print Media, we hardly knew theeOurs is an age of rapid and unprecedented change.  While that may seem like a cliched and meaningless truism to those of us who have heard these words and felt their consequences all our lives, it is important to remember that the digital revolution is one of those messy and incomplete things at this stage, a little bit like the French Revolution was in the 1790s.  Yes, it has happened, but it will take a lifetime or more for all its effects to make themselves felt and not every aspect of life will feel them a the same time.  This post will be about how to deal with these changes generally, but first, some context in the example of the music industry.

Maybe ten years ago or so, the big hullabaloo was over file sharing and music piracy as record companies found themselves sitting on a huge back-catalogue that was suddenly valueless.  Songs that once could only be gotten from them were suddenly available to all in a cheap and convenient way.  To be sure, before that, the same industry tried (unsuccessfully) to stop people from recording music from the radio or buying a cassette tape and making copies for their friends with public service announcements equating these actions to theft (something the music and movie industries do to this day).

The music industry survives to this day, but only after making a few adjustments to the way they got money out of people.  The big change that came originated from the notion that music, at its very core, is not a product, but rather a service.  This might seem a little counter-intuitive or you may think that the distinction does not matter.  In reality, it makes all the difference in the world.  For most of the twentieth century, we have been conditioned to think of music in terms of singles and albums, which are objects you can see and touch, put on a store shelf and exchange knowing that once you give it away, you no longer have access to it.

This is a very different paradigm, however, to that which has existed for most of human history.  Before the dawn of audio recording equipment, music was very definitely not a tangible object you could see or touch – a product.  Rather, it was something people did, like cleaning a house and fixing a car and if you wanted music, you either did it yourself or paid others to do it for you – it was a service.  So what, you say.  How is that relevant to the situation today?  It is relevant in that technology has progressed to the point where music and a lot of other jobs that were services-turned products are being turned back into services and that is going to put a lot of very hardworking, talented people out of work.

With music recordings, you can reach far more people than any live performer could on their own.  This was a very big change and while it greatly enriched the lives of a few, it also greatly lowered the median pay of musicians everywhere.  A tenor who could make a living performing night after night would now find himself out of work as people bought up the records of the very best tenor of his day and listened to that instead.  Bars that once paid bands to come in and play could now substitute the band for a jukebox or even a radio.  The work dried up and the average musician, the one that could not somehow contrive to sell millions of albums, was all the poorer for it, in spite of whatever work they might put in.

Today, the same thing is happening, but in reverse.  There is less and less reason to buy a physical album and cheap, high quality substitutes can be found quite easily, if you know where to look.  This would make you think that something like the iTunes music store would be unsuccessful, but you would be wrong.  The iTunes store succeeds in the wake of Napster, BitTorrent and a thousand imitators.  Why?  Because what iTunes provides that other methods of attaining music in digital form do not is a valuable service.

Search for any song in iTunes and you will find high quality recordings of it almost immediately, and if you choose to buy it, the program will upload it to your music player automatically and organise it into categories for you like artist, album and genre for you when you want to find it again and even download pretty artwork to display while the song is playing.  If you download a torrent of an album on the other hand, not only do you need to do a lot more legwork when searching, but you have to deal with getting copies of varying quality and you will have to do all your organising and uploading manually.  Perhaps you prefer that, but it’s the difference between doing an oil change on your car yourself and getting a mechanic to do it for you.  Yes, one is cheaper in terms of expenditure, but more expensive in terms of time.  iTunes succeeds because the service it provides is worth something to the people who use it and the price is right.

All that being said, I’ll get to the actual point of this post.

News Limited, the Australian subsidiary of News Corp is a media company that owns various newspapers here in Australia.  Its parent company also owns a network of newspapers and TV stations around the world.  Some of these news outlets have earned reputations as mouthpieces for the ultra-right-wing views of the company’s founder, but that is another story for another day.  Anyway, the reason for all this preamble was to give context to my discussion of the upcoming announcement that News Limited plans to hide its digital news content behind a paywall.

Oh Ghostbusters, you still have so much to teach us after all these years

This guy knows what's up

For those of you who don’t know already, print is dead (sort of).  It’s a meme that has been bouncing around in Western society since the advent of television, when TV news began to erode the influence of newspapers and it is even truer today.  Where once newspapers were the public’s primary source of news, today there is TV news, news websites, blogs, Twitter, forums, chatrooms, Facebook and multitudinous other networks through which news can propagate with greater reach, better convenience and at a much, much faster pace than has ever been possible.

What this all boils down to is the fact that people simply have very little reason to pay for news anymore, except perhaps out of habit or snobbery.  Circulation for newspapers has been in steady systematic decline for some time and consequently, so have advertising revenues from those papers.  The obvious answer is for news companies to pick up the slack by getting advertising revenue from the online versions of their newspapers, but here’s the rub: the companies that like to advertise with newspapers simply will not pay the same kind of money for online ads as they will for print – there is less chance that readers will pay attention to online ads and if ads on news websites are too expensive, they can find cheaper alternatives elsewhere.

Since News Limited cannot get their revenues out of their advertisers like they used to, the next step is to try to get these revenues out of their readers.  The logic goes that their digital content has hitherto been available for free, so they will ask readers to begin to pay for it on the basis that these same readers have always been paying for news in the form of broadsheets anyway.  Simple, yes?  Unfortunately, it doesn’t work this way and hiding content behind a paywall will only serve to make this content irrelevant.

The thing that the people in charge at News Limited fail to understand is that like music, news was originally a service rather than a product and the digital age is turning it back to what it was back when town criers and gossip were the primary means of news dispersal.  To the people in charge, however, the whole point of the company is predicated on the notion that news is a product.  It was the same with record companies ten years ago and it is the reason that the number one purveyor of digital music today is a computer company rather than a record company.  People simply aren’t going to start coughing up for something they can otherwise get for free unless you add significant value that was not there before.  This paywall is the reaction of analog men in a digital age and if they do not get their act together and add value to what they offer, they will flounder just like the record companies did and in ten years time, the biggest purveyor of news may well be a tech company that decides to invade their space.

What form this greater level of service might eventually take, I cannot say.  The key lies in greater convenience and in using the technology to do things that were not possible in the broadsheet format.  This will require a greater level of investment than these companies were hitherto willing to commit and, unfortunately for them, lowered expectations of the revenues they can expect from each new reader.  However, the possibilities in this area are myriad – embedded audio and video, animated visualisation of data, clever algorithms to help the reader find further information, customisation of content, social connectivity and, of course, greater scope in editorial content.

Perhaps the digital newspaper of the future will show you the headlines with the embedded picture being a short looping video (a la Harry Potter’s fictional newspaper The Daily Prophet) and when you click on it, you can choose to have the story read to you by a digitised voice (you get several choices, including Morgan Freeman and Jeremy Irons) or you can read it yourself.  Once you’re done reading or listening, you are but a click or scroll away from finding related articles from a list, by clicking on a sentence to bring up search results, by bringing up a digitally-generated timeline that lets you see how this story has developed over the last few months or years at a glance or by viewing available source documents for the story so that you can verify for yourself what the journalist told you (for news regarding politics etc.).  Perhaps on the sidebar, you can see what your friends are reading about or even recommend stories to them.  At a touch, you can write a letter to the editor or have the comments on a story read to you by that same voice digitiser that allocates different voices to each of the commentators according to their own (or your own) preferences, allowing to skip over the comments of particularly ignorant or repugnant commentators.  Maybe the digital newspaper of the future has a built-in twitter-esque ticker that will bring you up-to-the-minute news and allow you to transmit your own news to your friends.

The point of all this is that news companies cannot afford to be defensive.  What News Corp and News Limited should be doing is trying to beat Twitter and Facebook to the punch, not shielding their faces, hoping to protect themselves from the coming blow.  Make it irresistible, make it addictive, make it worth the money or get out of the business.

Categories: News, Society
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