News Industry Dying?
Date: March 13th 2007
I read a news story that made me think about commodification with regards to the news media. I think the author is blinded by his own historical assumptions about the news media and its industry. Here is my comment to the paper.
Dear Sasha Abramsky,
You are making a broad assumption that is affecting your conclusion. Just because news services have funded news gathering through subscriptions and advertising does not bless that business model with some kind of perpetual authority. No business model will survive forever.
Famed economist Joseph A. Schumpeter described the concept of "Creative Destruction" that sums up what is happening to the news media, just as it is happening in software development (think Open Source vs. proprietary), information (think Wikipedia vs. Britannica) and consumer media (think music and movie distributors vs. file traders). Commodification is the simultaneous reduction of value of an individual commodity along with a tremendous increase in its networked value. Unfortunately, it is a rare business that can change its business model when the effects of commodification strikes its product area.
It may appear that the news aggregation sites are killing the model, but the truth is, they are serving the market by providing a service that news organizations failed to provide when they had a chance. News organizations have an entrenched philosophy of how they believe they should provide their services and have failed to adapt. They have essentially signed their own execution orders and I have little sympathy for them.
The benefits currently being provided by today's news media business model will be met in other ways. The market will see to that. We may lose formal news bureaus, but we will gain access to many more raw reports of a given event from professional and amateur reporters. We will compensate for filtered, (arguably) unbiased news reports by being able to sift and distill those many raw reports to help establish a more accurate truth of a reported event than we can do currently. Because of the Internet, events we care about we can now investigate ourselves in those raw reports. For other news events we may rely on any of a number of news aggregation services, free or otherwise.
Once people are given access to raw materials, be it news, source code, information or media, we can often do a better job of making useful and consumable products for each other than the companies that currently provide those services to us for a fee. In fact, I see our world in a transition back to the more self-sufficient, self-providing and self-governing spirit of the past. This, of course, is to the woe of the companies who have spent the last 100 years telling us what we should like, wear, do and be. If the cost of this transition is losing the MPAA, the RIAA, established news organizations and proprietary software development and information distribution companies, then that is a cost I am willing to pay today.
Anthony L. Awtrey