Want high-quality news? Pay for it.
Google, Yahoo, and The Huffington Post make money on free content by externalizing the costs of production. It's time to change that. Contrary to popular belief, information does not want to be free. Creating good information is expensive – and it should cost us something.
Menlo Park, Calif. — I’m not convinced that information can be personified. I doubt very much that it is conscious or that it possesses a soul. But I do know that – contrary to popular belief – it certainly does not want to be free. Automobiles, houses, and diamonds do not want to be free, either. The digerati who sold the “information wants to be free” slogan to the world were really saying that they did not want to pay for information, music, movies, or any other form of information. Businesses that grew profitable giving away free information were also big supporters of the concept.
Creating good information, great music, and outstanding films is expensive. Of course there are people – myself included – who produce information without expectations of making money. I write because I hope my books and articles will help influence thought and policy. But in general, if we want to have great investigative reporting, accurate and well-written news, and broad coverage of events, we had better come to grips with having to pay for it.
Producing good information requires hard work. Research has to be done. Facts have to be checked. Material has to be edited. Writers and reporters have to be trained. Words don’t just roll off people’s off fingertips and onto the computer screen. Well-crafted prose is the result of hours of effort spent honing sentences and paragraphs.
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Information, of course, shouldn’t be expensive merely because it’s costly to produce, but because it’s valuable. The person behind the “free” slogan, Stewart Brand, put it brilliantly in 1987: “Information wants to be free because it has become so cheap to distribute, copy, and recombine – too cheap to meter. It wants to be expensive because it can be immeasurably valuable to the recipient. That tension will not go away.”
Today, however, this tension is out of balance. One of the truths of economics is that if you sell something for less than it costs to produce, you’ll produce less – or none – of it. That’s what’s happening to news outlets across the country. If revenues get low enough, the only content they’ll be able to publish is from individuals like myself, people with little economic motivation.
So here is what the individuals who liberated information really meant to say. We can get away with making information free as long as we can externalize its costs. This is easy to do in an overconnected world, and here’s how it works: Externalizing costs means making someone else pay for what you use or do. That is what the banks did during the 2008 financial crisis. They made profits and passed the costs of the bailout onto taxpayers. In the case of information, Google News – to cite just one example – can take the information that others produce, distribute it broadly over the Internet, and make money by selling ads.
This externalizes the cost of generating the content by having others – individual writers, that is, or professional news gathering organizations – produce it. In the case of blogging sites like The Huffington Post, many writers produce material for the site with the hope of gaining free exposure and becoming better known, without being paid a penny for their work. If they are being compensated, the compensation comes in an exceeding indirect way.
One of the big problems created by the Internet in our overconnected world is that it is easier than ever to externalize costs and make large amounts of money.
But the time has come to put information back on the market. Unless we put in place systems that enable information providers (for example, writers) to recover the cost of providing good information, there will be less and less of it. Doing this will require a concerted effort on the part of information suppliers as well as the people who have been externalizing their costs.
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The Wall Street Journal has been leading the way. You can’t get in-depth access to the Journal’s excellent content without paying. The Tablet edition sells for $3.99 per week. Other providers of valuable information should follow the Journal’s lead. And The New York Times recently started charging some frequent readers for access to its website. Other content providers should be courageous enough to charge for their content as well.
But there is more that can be done. The businesses that have been profiting by externalizing the costs of providing information to consumers should help as well. They should provide efficient mechanisms so that information providers can be compensated for the information that appears on their sites. That is, why shouldn’t Google charge readers for its news service just like The Wall Street Journal – and pay the providers for content?
A Google Information Store might turn out to be a good business for Google. The store would support the availability of high quality news and investigative reporting that is key to preserving our democracy. It would help Google and other aggregators to ensure that they “did no evil” by supporting, not destroying, reliable news – a national treasure.
Bill Davidow has been a high-technology industry executive and a venture investor for more than 30 years. This essay is based on his latest book, “Overconnected: The Promise and Threat of the Internet.”