Newspapers, The Recording Industry And A Misplaced Sense Of Entitlement

from the how-it-works... dept

Earlier this month, the Guardian's Henry Porter wrote a poorly thought out opinion piece attacking Google for not simply handing money over to the recording industry, declaring that Google "creates nothing." This is beyond wrong, it's dumb. If it were true, there would be nothing to worry about, because no one would care about Google. It seems clear that Porter didn't bother to read the widespread criticism about his piece, because he's right back at it, with a column all about "the good old days" of local newspapers, that concludes with yet another misguided attack on Google:

The crisis in local news is not just about "the business model", a phrase I am coming to loathe. It is about the fabric of a society and the careers that grew out of local journalism and have made so many contributions both to journalism and national life.

This is something that new companies such as Google, with all their wealth and lack of obligation to anything beyond their own exhilarated sense of entitlement, will never understand. Why would they when they can sell advertising around journalism that has been provided for free by increasingly desperate newspapers?

This is, of course, a pretty pathetic response. Tim O'Reilly points us to a great "off the cuff" piece by famed baseball statistician Bill James, who in researching a crime novel he's writing also ended up researching the history of the modern newspaper and noted that it was actually quite similar to today's blogging pioneers:

Writing the crime book ... the modern newspapers started about 1836. There were newspapers for a hundred years before that, but they were relatively expensive. In 1836 somebody "invented" the steam-driven printing press ... not sure tying together a steam engine and a printing press can really be considered an invention. But anyway, paper was cheap, so putting together a little engine and a little printing press enabled anybody with a small investment to start his own newspaper. Every significant city by 1845 had dozens of little newspapers, which were much closer to Blogs than to modern newspapers.

One of the first things they did was start writing crime stories, exploiting crimes for money. Then there was 100+ years of newspapers getting bigger and bigger and more organized and more expensive to produce. What were basically one-man shows, and then the better ones hired assistants and then business managers, they added sports sections, cartoons, advertising salesmen and then advertising departments. They invented wire services (about 1890), and then there were syndicated columnists and syndicated features. The newspapers drove each other out of business for 100 years....

We're back to 1836 now, in a sense; everybody who wants to has his own "newspaper", and it's tough to know who is good and who is reliable and who isn't, but the same processes are still running. The blogs will get bigger; the good ones are hiring a second helper and a third and fourth, and we'll spend a century or more sorting things out and re-creating the market. It's hard, but it's not a bad thing. It's a good thing.

But an even better response to Porter's accusation that Google is the entitled party comes via Michael Scott, who points us to a great discussion of Porter's statement by the blog TechnoLlama, who points out that Porter appears to have the whole story backwards:

Is it not the old media the one that has an "exhilarated sense of entitlement" that prompts them to bemoan their loss of prominence with the public? People vote with their feet (or more accurately, with their clicks), and if some local newspaper does not fulfil those functions, then it will disappear.

I'm pretty good at stating the bleeding obvious, but this has to be repeated. We are currently undergoing a shift in media consumption of cataclysmic proportions, the lines are being drawn between what Lessig calls the Read-Only and Read/Write cultures (RO and RW respectively). As the advertising well dries up, the old RO media is left hurt and bewildered, wondering where have all the punters gone. Then they see clips of Susan Boyle on YouTube accumulating 100 million views, and it dawns on them. YouTube and Google have stolen all of the viewers! The parasites do not create anything, yet profit handsomely from stolen content. They try to negotiate, but Google is not budging as it has the upper hand. Then they talk about lost profit, and expect some form of compensation. Soon there will be talk of yet more legal action.

The problem for the RO crowd is that they have it completely backwards. In the age before YouTube, Susan Boyle would have been viewed only by those who actually watched the show (just over 8 million UK viewers). It would have been a water-cooler moment, with people commenting on it. But the fact that it was posted on YouTube and went viral made it a global story, it enhanced the ratings for the show, and in general enhanced ITV's position with advertisers. But all that the RO crowd can think of is loss revenue from those 100 million clicks.

Indeed. I've been amazed to read stories in the press claiming that somehow Boyle and the show Britain's Got Talent somehow is a sad story because the show and/or Boyle didn't "monetize" the traffic with ads, and I'm wondering where these people are coming from. Both Boyle and the show got tremendous amounts of free publicity from YouTube that they never would have received just a few years ago, thanks entirely to YouTube. The fact that the site was able to help promote the whole thing without the TV producers having to pay for advertising, bandwidth or distribution is revolutionary, and a massive change in the way things used to be.

And people are complaining?

The only sense of entitlement is coming from the old school players -- the newspapers and the recording industry -- who fail to recognize revolutionary technologies that are changing their markets, and enabling tremendous new opportunities. These old school players seem to feel entitled to their old business models, even as they fail to embrace the new opportunities and fail to provide what consumers clearly desire. There is no sense of entitlement from the new generation. The philosophy of entitlement comes from the old guard, that seems to think that because they made money one way in the past, the rest of the world has to ignore the possibilities of new technologies in order to let the world pretend that it still needs to do things and pay for things the old way.

That's the only sense of entitlement I'm seeing.

It's not in people participating in news stories by sharing them, spreading them, linking to them and commenting online. And it's not in people sharing music, listening to music and promoting music online. It's in the old industries that refuse to admit that new technologies make things more efficient, and it's in pretending that all new efficiencies must be illegal or immoral because money can no longer be made via outdated business models.

Filed Under: business models, entitlement, henry porter, newspapers, recording industry, susan boyle
Companies: google

Don't Blame Google And Scribd For Your Own Business Model Problems

from the try-this-on-for-size dept

Another weekend goes by and another old school newspaper guy writes a long screed condemning Google as a menace hellbent on destroying all that is good and right in the news business. This one, by Henry Porter in The Guardian is particularly amusing due to the logical inconsistencies within. It starts out, first, with a rehashing of the misguided attack on Scribd, where Porter seems to blame Scribd for actions of its users (who knew it was so difficult to separate out the drivers from the automakers). To him, Scribd is pure evil:

it still allows individuals to advertise services for delivering pirated books by email, which must make it the enemy of every writer and publisher in the world. In effect it has turned copyright law on its head: instead of asking publishers for permission, it requires them to object if and when they become aware of a breach.

Yes, that's why many authors and publishers are using Scribd to help promote their books. Apparently the fact that Scribd might be useful never occurred to Porter. It's the same complaint by plenty of folks who refuse to even think about new business model possibilities, to immediately condemn any useful new service as killing off any hope of a business model even as those willing to embrace the technology are finding it enhances rather than diminishes their opportunities.

Then, right after he complains that Scribd isn't doing enough to prevent books from getting online, he complains about Google for the exact opposite thing:

Google presents a far greater threat to the livelihood of individuals and the future of commercial institutions important to the community.... When the Performing Rights Society demanded more money for music videos streamed from the website, Google reacted by refusing to pay the requested 0.22p per play and took down the videos of the artists concerned.

This is the very next paragraph. So, let me get the logic straight: Scribd is a problem because it allows books to be posted online without permission and doesn't do enough to take them down. Google, on the other hand, is a problem because it has taken down music videos rather than leaving them up and simply paying.

So, apparently, the lesson of the day is that content creators should be able to demand a specific amount of money from any service provider for actions done by their users (not the service provider itself), and if that service provider can't pay up, too bad. Oh, and then, of course, there's the popular claim of the content creator that Google adds no value:

Google is in the final analysis a parasite that creates nothing, merely offering little aggregation, lists and the ordering of information generated by people who have invested their capital, skill and time.

Fair enough. If it adds no real value, then remove your works from Google, Mr. Porter. But, the truth is Mr. Porter is wrong and he knows it deep down inside. If Google "created nothing" and offered no value, no one would use it. But the fact is that it creates tremendous value, hence all of the usage, including some that drives traffic to Mr. Porter's weakly argued, poorly reasoned rant. The fact that Mr. Porter or his bosses are somehow unable to capitalize on that traffic is their fault alone, not Google's.

Filed Under: blame, business models, henry porter, problems
Companies: google, scribd