[ed. This article is especially interesting for the discussion that occurs in the Comments section at the end of the story. Check it out it's well worth reading, particularly the comments attributed to someone named KTech1. I'm probably biased, but I think sites like Duck Soup actually benefit traditional media by highlighting interesting articles and pointing traffic their way. We're all inundated with information, crowd-sourcing reader interest should be something you think they'd support, not suppress.]
Dustin Hoffman and Robert Redford investigate Watergate in All The President's Men. The Washington Post is one of many media companies losing money for their work through the internet. Photograph: Ronald Grant
by Robert Levine
For most of the 80s and 90s, NBC dominated US television: Miami Vice, The Cosby Show, Cheers, Seinfeld, Friends. The network earned its ratings by pushing boundaries – Miami Vice stylised the police drama, while Hill Street Blues gave it gritty realism. These shows also brought in big money – NBC was once one of the most profitable divisions of General Electric. But when the parent company was acquired by Comcast this year, the deal reportedly gave the network a value of zero.
NBC isn't the only major media business that has fallen on hard times. EMI, home of the Beatles and Pink Floyd, has trimmed its roster and cut thousands of jobs. The Washington Post, which set a high-water mark for US journalism with its Watergate reporting, has reduced its newsroom staff, closed its national bureaux, and declared: "We are not a national news organisation of record." MGM, with its roaring lion logo, was recently acquired for less than half its 2005 value.
All of these companies faced the same problem: they weren't collecting enough of the revenue being generated by their work. The public hasn't lost its appetite for television, journalism or film; shows, articles and movies reach more consumers than ever online. The problem is that, although the internet has expanded the audience for media, it has all but destroyed the market for it.
Over the past decade, much of the value created by music, films, and newspapers has benefited other companies – pirates and respected technology firms alike. The Pirate Bay website made money by illegally offering major-label albums, even as music sales declined to less than half of what they were 10 years ago. YouTube used clips from shows such as NBC's Saturday Night Live to build a business that Google bought for $1.65bn. And the Huffington Post became one of the most popular news sites online largely by rewriting newspaper articles. This isn't the inevitable result of technology. Traditionally, the companies that invested in music and film also controlled their distribution – EMI, for example, owned recording studios, pressing plants, and the infrastructure that delivered CDs to stores. Piracy was always a nuisance, but never a serious threat. The same was true of other media businesses: the easiest place to get a newspaper story was from a newspaper.
The internet changed all this, not because it enables the fast transmission of digital data but because the regulations that enable technology companies to evade responsibility for their business models have created a broken market. Scores of sites now offer music, while hundreds of others summarise news. Part of the problem is rampant piracy – unauthorised distribution that doesn't benefit creators or the companies that invest in them. It also puts pressure on media companies to accept online distribution deals that don't cover their costs.
But the underlying issue is that creators and distributors now have opposing interests. Companies such as Google and Apple don't care that much about selling media, since they make their money in other ways – on advertising in the first case, and gadgets in the second. Google just wants to help consumers find the song or show they're looking for, whether it's a legal download or not, while Apple has an interest in pushing down the price of music to make its products more useful. And this dynamic doesn't only hurt media conglomerates – it creates problems for independent artists and companies of every size.
Technology companies often promote the idea that "information wants to be free", as technologist Stewart Brand said, because it's so cheap to deliver. Indeed, one of the most exciting aspects of the internet is the way it has all but eliminated distribution costs – a digital movie can be sent from Hollywood to Hong Kong for pennies. Some pundits even suggest the price of media will inevitably fall to that level.
It's hard to imagine how that would happen, simply because the internet hasn't had nearly as much effect on the process of making movies. The same film that costs pennies to send across the world might cost $150m to make. "That tension will not go away," Brand predicted in 1984. "It leads to wrenching debate about price, copyright, 'intellectual property' [and] the moral rightness of casual distribution."
Read more:
by Robert Levine
For most of the 80s and 90s, NBC dominated US television: Miami Vice, The Cosby Show, Cheers, Seinfeld, Friends. The network earned its ratings by pushing boundaries – Miami Vice stylised the police drama, while Hill Street Blues gave it gritty realism. These shows also brought in big money – NBC was once one of the most profitable divisions of General Electric. But when the parent company was acquired by Comcast this year, the deal reportedly gave the network a value of zero.
NBC isn't the only major media business that has fallen on hard times. EMI, home of the Beatles and Pink Floyd, has trimmed its roster and cut thousands of jobs. The Washington Post, which set a high-water mark for US journalism with its Watergate reporting, has reduced its newsroom staff, closed its national bureaux, and declared: "We are not a national news organisation of record." MGM, with its roaring lion logo, was recently acquired for less than half its 2005 value.
All of these companies faced the same problem: they weren't collecting enough of the revenue being generated by their work. The public hasn't lost its appetite for television, journalism or film; shows, articles and movies reach more consumers than ever online. The problem is that, although the internet has expanded the audience for media, it has all but destroyed the market for it.
Over the past decade, much of the value created by music, films, and newspapers has benefited other companies – pirates and respected technology firms alike. The Pirate Bay website made money by illegally offering major-label albums, even as music sales declined to less than half of what they were 10 years ago. YouTube used clips from shows such as NBC's Saturday Night Live to build a business that Google bought for $1.65bn. And the Huffington Post became one of the most popular news sites online largely by rewriting newspaper articles. This isn't the inevitable result of technology. Traditionally, the companies that invested in music and film also controlled their distribution – EMI, for example, owned recording studios, pressing plants, and the infrastructure that delivered CDs to stores. Piracy was always a nuisance, but never a serious threat. The same was true of other media businesses: the easiest place to get a newspaper story was from a newspaper.
The internet changed all this, not because it enables the fast transmission of digital data but because the regulations that enable technology companies to evade responsibility for their business models have created a broken market. Scores of sites now offer music, while hundreds of others summarise news. Part of the problem is rampant piracy – unauthorised distribution that doesn't benefit creators or the companies that invest in them. It also puts pressure on media companies to accept online distribution deals that don't cover their costs.
But the underlying issue is that creators and distributors now have opposing interests. Companies such as Google and Apple don't care that much about selling media, since they make their money in other ways – on advertising in the first case, and gadgets in the second. Google just wants to help consumers find the song or show they're looking for, whether it's a legal download or not, while Apple has an interest in pushing down the price of music to make its products more useful. And this dynamic doesn't only hurt media conglomerates – it creates problems for independent artists and companies of every size.
Technology companies often promote the idea that "information wants to be free", as technologist Stewart Brand said, because it's so cheap to deliver. Indeed, one of the most exciting aspects of the internet is the way it has all but eliminated distribution costs – a digital movie can be sent from Hollywood to Hong Kong for pennies. Some pundits even suggest the price of media will inevitably fall to that level.
It's hard to imagine how that would happen, simply because the internet hasn't had nearly as much effect on the process of making movies. The same film that costs pennies to send across the world might cost $150m to make. "That tension will not go away," Brand predicted in 1984. "It leads to wrenching debate about price, copyright, 'intellectual property' [and] the moral rightness of casual distribution."
Read more:
