Clay Shirky

Pick up the pitchforks: David Pogue underestimates Hollywood

Writing in his blog on the New York Times yesterday, David Pogue, one of the Times’ tech columnists, advises toning down the alarmist rhetoric over SOPA, suggesting that opponents of the bill (and its Senate cousin PIPA) should Put Down the Pitchforks. He takes particular issue with people who have criticized SOPA without actually understanding the text of the bill. Then, after this preamble, Pogue proceeds to offer an explanation of SOPA that makes it clear that he does not understand the text of the bill.

Here’s his description of what’s at stake:

If the entertainment industry’s legal arm gets out of control, [opponents] say, they could deem almost anything to be a piracy site. YouTube could be one, because lots of videos include bits of TV shows and copyrighted music. Facebook could be one, because people often link to copyrighted videos and songs. Google and Bing would be responsible for removing every link to a questionable Web site. Just a gigantic headache.

That’s Pogue’s perspective: Letting Hollywood decide whether any given site with user contributions facilitates piracy would amount to nothing more than “a gigantic headache.” (Me, I’d have gone with “a violation of the First Amendment.”) To come to a conclusion like this, you’d have to believe that traditional media companies are committed to balancing their desire for control with a respect for citizen rights, and indeed, Pogue does seem to believe this (hence the observation that bad things would happen only if the entertainment industry’s legal arm gets out of control.)

If their legal arm gets out of control? This is an industry that demands payment from summer camps if the kids sing Happy Birthday or God Bless America, an industry that issues takedown notices for a 29-second home movie of a toddler dancing to Prince. Traditional American media firms are implacably opposed to any increase in citizens’ ability to create, copy, save, alter, or share media on our own. They fought against cassette audio tapes, and photocopiers. They swore the VCR would destroy Hollywood. They tried to kill Tivo. They tried to kill MiniDisc. They tried to kill player pianos. They do this whenever a technology increases user freedom over media. Every time. Every single time.

And they don’t just want control — they want it at low cost, and high speed. Pogue talks about the bills’ allowing the Government to sue. What he doesn’t mention is that the bills were also written to allow “market based” system allowing media firms to get injunctions against sites they don’t like, or that they were written so that firms who host user conversations would have incentives to censor their own users in advance, rather than waiting for notification from a copyright holder, as happens now.

I know David Pogue, and he’s a smart guy. I don’t think he’s intentionally trying to obscure the way the bill imagines letting media firms escape due process and impose “market-based” censorship. I think he simply cannot imagine that the bills are as bad as they actually are.

This is a general problem — there is a reasonable conversation to be had about sites set up for large, commercial operations that are designed to violate copyright. And because there’s a reasonable conversation to be had, Pogue (and many others) simply imagine that the core of SOPA must therefore be reasonable. Surely Hollywood wouldn’t try to suspend due process, would they? Or create a parallel enforcement system? Or take away citizen recourse if they were unfairly silenced? They wouldn’t imagine the possibility of a longer jail term for streaming a Michael Jackson video than Jackson’s own doctor got for killing actual Michael Jackson? Would they?

Hollywood wants to take the law into their own hands — they had our representatives add a vigilante clause, for God’s sake, to protect overzealous censors from legal challenge by users — and like a Scooby Doo™ episode, they would have gotten away with it too, if it hadn’t been for us meddlesome kids.

Chris Dodd, lobbyist-in-chief for the MPAA, who is watching the thick end of a hundred million bucks of paid-for legislation swirl around the drain, has been reduced to bizarrely indirect defensiveness, touting the First Amendment credentials of the bill’s co-sponsors, as if that meant these bills must therefore be clean as well. Yet the very first substantive section of SOPA, Section 2.a.1., gives the game away, by being a little too touchy about its constitutional implications: “Nothing in this Act shall be construed to impose a prior restraint on free speech.” Got that? This bill is not about prior restraint. Totally not! What would make you even think such a thing!?

And arguments like Pogue’s are dangerous not because they are pro-SOPA — Pogue himself is glad it is in trouble — but because they obscure the core historical fact: The American media industry tries to stifle user freedom. Every time. Every single time.

We should delight in the stand we’ve taken in favor of things like, say, notifications, and trials, and proof before censoring someone, but we should get ready to do it again next year, and the year after that. The risk now is not that SOPA will pass. The risk is that we’ll think we’ve won. We haven’t; they’ll be back. Get ready to have this fight again.

Categories: Clay Shirky

Newspapers, Paywalls, and Core Users

This may be the year where newspapers finally drop the idea of treating all news as a product, and all readers as customers.

One early sign of this shift was the 2010 launch of paywalls for the London Times and Sunday Times. These involved no new strategy; however, the newspaper world was finally willing to regard them as real test of whether general-interest papers could induce a critical mass of readers to pay. (Nope.) Then, in March, the New York Times introduced a charge for readers who crossed a certain threshold of article views (a pattern copied from the financial press, and especially the Financial Times) which is generating substantial revenue. Finally, and most recently, were a pair of announcements last month: The Chicago Sun-Times was adopting a new threshold charge, and the Minneapolis Star-Tribune said that their existing one was also working well. Taken together, these events are a blow to the idea that online news can be treated as a simple product for sale, as the physical newspaper was.

For some time now, newspaper people have been insisting, sometimes angrily, that we readers will soon have to pay for content (an assertion that had already appeared, in just that form, by 1996.) During that same period, freely available content grew ten-thousand-fold, while buyers didn’t. In fact, as Paul Graham has pointed out, “Consumers never really were paying for content, and publishers weren’t really selling it either…Almost every form of publishing has been organized as if the medium was what they were selling, and the content was irrelevant.”

Commercial radio is ad-supported because no one could figure out a way to restrict access to radio waves; cable TV collects revenues because someone figured out a way to restrict access to co-axial cables. The logic of the internet is that everyone pays for the infrastructure, then everyone gets to use it. This is obviously incompatible with print economics, but oddly, the industry’s faith in ‘every reader a customer’ has been largely unshaken by newspapers’ own lived experience of the move to the web.

A printed paper was a bundle. A reader who wanted only sports and stock tables bought the same paper as a reader who wanted local and national politics, or recipes and horoscopes. Online, though, that bundle is torn apart, every day, by users who forward each other individual URLs, without regard to front pages or named sections or intended navigation. This unbundling leads to the odd math of web readership — if you rank readers by pages viewed in a month, the largest group by far, between a third and half of them, will visit only a single page. A smaller group will read two pages in a month, a still smaller group will read three, and so on, up to the most active reader, in a group by herself, who will read dozens of pages a day, hundreds in a month.

Against this hugely variable audience behavior, a paywall was all-or-nothing: “If you won’t give us any money, we won’t show you any ads!” Offered this all-or-nothing choice, most readers opted for ‘nothing’; the day they launched their paywall, the Times of London shrank its digital audience from a large multiple of its print circulation to a small fraction of it. This isn’t a problem with general-interest paywalls — it is the problem, widely understood before the turn of the century, and one to which there has never been a convincing answer. The easy part of treating digital news as a product is getting money from 2% of your audience. The hard part is losing 98% of your advertising base.

* * *

To understand newspapers’ 15-year attachment to paywalls, you have to understand “Everyone must pay!” not just as an economic assertion, but as a cultural one. Though the journalists all knew readership would plummet if their paper dropped imported content like Dear Abby or the funny pages, they never really had to know just how few people were reading about the City Council or the water main break. Part of the appeal of paywalls, even in the face of their economic ineffectiveness, was preserving this sense that a coupon-clipper and a news junkie were both just customers, people whose motivations the paper could serve in general, without having to understand in particular.

The article threshold has often been discussed as if it was simply a new method of getting readers to pay, to which the reply has to be “Yes, except for most of them.” Calling article thresholds a “leaky” or “porous” paywall understates the enormity of the change; the metaphor of a leak suggests a mostly intact container that lets out a minority of its contents, but a paper that shares even two pages a month frees a majority of users from any fee at all. By the time the threshold is at 20 pages (a number fast becoming customary) a paper has given up on even trying to charge between 85% and 95% of its readers, and it will only convince a minority of that minority to pay.

Newspapers have two principal sources of revenue, readers and advertisers, and they can operate at mass or niche scale for each of those groups. A metro-area daily paper is a mass product for customers (many readers buy the paper) and for advertisers (many readers see their ads.) Newsletters and small-circulation magazines, by contrast, serve niche readers, and therefore niche advertisers — Fire Chief, Mother Earth News. (Some newsletters get by with no advertising at all, as with Cooks’ Illustrated, where part of what the user pays for is freedom from ads, or rather freedom from a publisher beholden to advertisers.)

Paywalls were an attempt to preserve the old mass+mass model after a transition to digital distribution. With so few readers willing to pay, and therefore so few readers to advertise to, paywalls instead turned newspapers into a niche+niche business. What the article threshold creates is an odd hybrid — a mass market for advertising, but a niche market for users. As David Cohn has pointed out, this is the commercial equivalent of the National Public Radio model, where sponsors reach all listeners, but direct suport only comes from donors. (Lest NPR seem like small ball, it’s worth noting that the Times ‘ has convinced something like one out of every hundred of its online readers to pay, while NPR affiliates’ success rate is something like one in twelve. Newspapers with thresholds now aspire to NPR’s persuasiveness.) Paywalls encourage a paper to focus on the value of their content. Thresholds encourage them to focus on the value of their users.

* * *

Threshold charges subject the logic of the print bundle — a bit of everything for everybody, slathered with ads — to two new questions: What do our most committed users want? And what will turn our most frequent readers into committed users? Here are some things that won’t: More ads. More gossip. More syndicated copy. This is new territory for mainstream papers, who have always had head count rather than engagement as their principal business metric.

Celebrities behaving badly always drive page-views through the roof, but those readers will be anything but committed. Meanwhile, the people who hit the threshold and then hand over money are, almost by definition, people who regard the paper not just as an occasional source of interesting articles, but as an essential institution, one whose continued existence is vital no matter what today’s offerings are.

In discussing why the most loyal subset of readers would pay for access to the Times, Felix Salmon described some of the motivations reported by users: “I like the product, understand the incentives involved, and want its production to continue” and “I feel that maintaining a quality NYT is immensely important to the country as a whole.” Now, and presumably from now on, the readers that matter most are disproportionately likely to score high on the God Forbid index (as in “God forbid the Sun-Times not be around to keep an eye on the politicians!”)

The people who feel this way have always been a minority of the readership, a fact obscured by print bundles, but made painfully visible by paywalls. When a paper abandons the standard paywall strategy, it gives up on selling news as a simple transaction. Instead, it must also appeal to its readers’ non-financial and non-transactional motivations: loyalty, gratitude, dedication to the mission, a sense of identification with the paper, an urge to preserve it as an institution rather than a business.

* * *

Thresholds are now mostly being tried at big-city papers — New York, Chicago, Minneapolis. Most papers, however, are not the Minneapolis Star-Tribune. Most papers are the Springfield Reporter, papers with a circulation 20,000 or less, and mostly made up of content bought from the Associated Press and United Media. These papers may not do well on the God Forbid index, because they produce so little original content, and they may not find thresholds financially viable, because the most engaged hundredth of their audience will number in the dozens, not the thousands.

On the other hand, local reporting is almost the only form of content for which the local paper is the sole source, so it’s also possible to imagine a virtuous circle for at least some small papers, where a civically-minded core of citizens step in to fund the paper in return for an increase in local coverage, both of politics and community matters. (It’s hard to overstate how vital community coverage is for small-town papers, which have typically been as much village well as town crier.)

It’s too early to know what behaviors the newly core users will reward or demand from their papers. They may start asking to see fewer or less intrusive ads than non-paying readers do. They may reward papers that make their comments section more conversational (as the Times has just done.) The most dramatic change, though, is that the paying users are almost certain to be more political engaged than the median reader.

There has never been a mass market for good journalism in this country. What there used to be was a mass market for print ads, coupled with a mass market for a physical bundle of entertainment, opinion, and information; these were tied to an institutional agreement to subsidize a modicum of real journalism. In that mass market, the opinions of the politically engaged readers didn’t matter much, outnumbered as they were by people checking their horoscopes. This suited advertisers fine; they have always preferred a centrist and distanced political outlook, the better not to alienate potential customers. When the politically engaged readers are also the only paying readers, however, their opinion will come to matter more, and in ways that will sometimes contradict the advertisers’ desires for anodyne coverage.

It will take time for the economic weight of those users to affect the organizational form of the paper, but slowly slowly, form follows funding. For the moment at least, the most promising experiment in user support means forgoing mass in favor of passion; this may be the year where we see how papers figure out how to reward the people most committed to their long-term survival.

Categories: Clay Shirky

Institutions, Confidence, and the News Crisis

Dean Starkman has written a lengthy piece in the Columbia Journalism Review, assessing the writings of a group of us he calls the “Future of News” movement. That essay, Confidence Game, focusses principally on Jay Rosen and me, both of NYU’s Carter Institute, and Jeff Jarvis of CUNY, though noting some similarity of vision with Emily Bell of Columbia, Dan Gillmor of Arizona, and John Paton, publisher of the Journal-Register Company. (Unmentioned fellow travelers include, mutatis mutandis, Steve Yelvington, Chris Anderson, Amanda Michel, Steve Buttry, Jonathan Stray, and Alan Mutter.)

Starkman doesn’t just criticize us (though he does that, at length.) He also puts forward a Burkean defense of institutional tradition as a store of embedded wisdom, arguing for the continued relevance of existing news organizations, especially newspapers, in something very close to their current form.

He jokingly calls his vision the “Neo-Institutional Hub-and-Spoke Model.” His description of what’s needed, though — “rebuilding or shoring up institutions” — makes it clear he doesn’t need the “Neo-” bit. He is talking about somehow saving the familiar institutions, not inventing new ones, a strategy that has long passed for Plan A in the conversation about what the internet changes about the news business.

He’s not even wild about the familiar institutions altering themselves too radically to accomodate those changes. Paton, who is trying to save local news reporting, is derided for being a “FON practitioner” (shades of the 5th column), and The Guardian, a storied paper since back in the day, gets ten with the cane for going ‘digital first‘. When echt newspaper guys like Paton of the Journal-Register and Alan Rusbridger of The Guardian are seen as heretics, you know we’re talking about that old-time religion.

Rosen and Jarvis and Bell and I disagree plenty, but one belief we have in common is that the way newspapers used to be organized and funded is a bad fit for the current environment, and getting worse. More than any individual sentiment we may have expressed, our public loss of faith in the institutional logic of Plan A seems to be what has most aroused Starkman’s ire.

* * *

Institutions reduce the choices available to their members. (This is Ronald Coase’s famous argument about transaction costs.) This reduction allows better focus on the remaining choices they face.

The editors meet every afternoon to discuss the front page. They have to decide whether to put the Mayor’s gaffe there or in Metro, whether to run the picture of the accused murderer or the kids running in the fountain, whether to put the Biker Grandma story above or below the fold. Here are some choices they don’t have to make at that meeting: Whether to have headlines. Whether to be a tabloid or a broadsheet. Whether to replace the entire front page with a single ad. Whether to drop the whole news-coverage thing and start selling ice cream.

Every such meeting, in other words, involves a thousand choices, but not a billion, because most of the big choices have already been made. These frozen choices are what gives institutions their vitality — they are in fact what make them institutions. Freed of the twin dangers of navel-gazing and random walks, an institution can concentrate its efforts on some persistent, medium-sized, and tractable problem, working at a scale and longevity unavailable to its individual participants.

Institutions also reduce the choices a society has to make. In the second half of the 20th century, “the news” was whatever was in the newspaper on the morning, or network TV at night. Advertisers knew where to reach shoppers. Politicians knew who to they had to talk to to get their message out (sometimes voluntarily, sometimes not.) Readers understood an Letters page as the obvious way of getting wider circulation for their views.

That dual reduction of choices masks an essential asymmetry, though. Institutions are designed to reduce they choices for their members, but they only happen to reduce the choices in society. A publisher may want reporters at their desks at 10 am, and to be the main source of breaking news for the paper’s readers. The former desire is under the publisher’s control; the latter not.

Now this seems easy enough to describe, but people inside institutions tend to confuse the two, to believe their institution is in control of both their daily routine and their destiny. And of course, the longer any given institution maintains a stable role, the less that role seems like an accident and the more it seems like a robust feature of reality.

* * *

Starkman and I could, I think, agree on this story so far, and indeed, most of the time institutional vitality is a safe bet. The ability of institutions to adapt slowly while preserving continuity of mission and process is exactly what lets them last longer than a single leader or lifespan. When change in the outside world outstrips an institution’s adaptive capabilities, though, the ability to defend the internal organization from outside pressures can become a liability. Stability can tun into rigidity and even institutional blindness.

Newspapers were stable for a really long time. The 1830s saw the rise of the penny press, when advertisers generated enough subsidy for the cover price to be reduced from six cents to one, with an attendant explosion in readership. Improbably enough, that model survived for most of two centuries with little more than tweaks and updates, right up to the sudden increase in freedoms occasioned by the internet, freedoms enjoyed by both advertisers and readers. The erosion of geographic sinecure made every story available everywhere. Casual aggregation from multiple sources delighted readers but eroded loyalty. Competition turned paywalls into cul-de-sacs instead of toll roads. Upstart web services (Yahoo and iVillage, Slate and Salon) first set then compressed a market price for ads that the newspapers never had a chance to alter. Users forwarding stories to one another increased audience size, but destroyed scarcity.

Despite these challenges to newspapers, Starkman believes that we can and must “…find ways to preserve and transfer their most important attributes to a digital era, even as we push them to adapt to new financial, technological, and cultural realities.” I don’t believe we must do this, because I don’t believe we can do this. That, I think, is the core diference between our views.

There are thousands of papers in the US, all facing simultaneous pressures on their revenues, their organizational form, the loyalty of their readership, the ferocity of the competition, and even their sense of self. If, seeing those challenges, we FONeros still thought it was possible to preserve most papers in something like their current form, we’d adopt Plan A too. You’d only pursue something like Plan B if you’d given up on broad institutional preservation in the first place.

* * *

To my eye, Starkman stacks the deck when comparing Plans A and B. He lists only three examples of successful “FON” journalism (US Attorney firings, “macacca,” and “bittergate“), but his recounting of the glories of print go back to Ida Tarbell. Tarbell was indeed a terrific reporter, but her byline has been somewhat scarce of late, given she’s been dead 70 years. Comparing a 5 year stretch of recent experiments with the greatest hits of newspapering since the McKinley administration may rally the home team, but it doesn’t make for a particularly informative comparison.

Like a Yeats of the newspaper world, Starkman yearns for the restoration of a culture considerably purer than the actual newspaper business has ever been. Reading Confidence Game, you’d never know that most papers are not like the NY Times, that most of what appears in their pages is syndicated, that sports is often better represented on the masthead than hard news. You’d never know that more American papers printed today will include a horoscope than international news. You’d never know that newspapers are institutions where grown men and women are assigned to write stories about dogs catching frisbees.

Saying newspapers will provide a stable home for reporters, just as soon as we figure out how to make newspapers stable, is like saying that if we had some ham, we could have a ham sandwich, if we had some bread. We need to support the people who cover hard news, but when you see a metro daily for a town of 100,000 that employs only six such reporters (just 10% of the masthead, much less total staff), saving the entire edifice just to support that handful looks a lot harder than just finding new ways to support them directly.

This view is, as Starkman says, anti-institutional, starting as it does from the premise that the outside world is changing faster than most newspapers’ adaptive capabilities. They have responded to 20 consecutive quarters ad revenue decline with the evisceration of international desks and newsroom staff. More is on the way. No medium has ever survived the indifference of 25 year olds.

* * *

We have long since entered a period of hybridization — William Bastone quitting The Village Voice to found Smoking Gun and Nate Silver selling fivethirtyeight.com to the NY Times, Andy Carvin and Anjali Mullany pioneering new forms of live coverage from inside traditional organizations, Amanda Michel’s career implementing citizen journalism at Huffington Post, then at ProPublica, then at The Guardian, these are concrete demonstrations that the old dichotomies of traditional vs. new media, professionals vs. amateurs, incumbents vs. insurgents, have long since stopped being real, hard choices, and have instead become points on an increasingly traversable spectrum.

All of this seems to offer the grandmotherly option between Starkman and the FON crew — “You’re both right, dear. We need institutions and we need experiments.” Even given this hybridization, though, our views diverge: Plan A assumes that experiments should be spokes to the newspapers’ hub, their continued role as the clear center of public interest journalism assured, and on the terms previously negotiated.

Plan B follows Jonathan Stray’s observations about the digital public sphere: in a world where Wikipedia is a more popular source of information than any newspaper, maybe we won’t have a clear center anymore. Maybe we’ll just have lots of overlapping, partial, competitive, cooperative attempts to arm the public to deal with the world we live in.

Some of the experiments going on today, small and tentative as they are, will eventually harden into institutional form, and that development will be as surprising as the penny press subsidizing journalism for seven generations. The old landscape had institutions and so will the new one, but this doesn’t imply continuity. We still have companies called Western Union and ATT, but as the communications landscape changed, they have become almost unrecognizably different from their former selves. Likewise, as the presses fall silent over the next ten years, even papers that survive will see their internal organization and their place in the ecosystem altered beyond our ability to predict.

If you believed, as Starkman clearly does, that this view is not just incorrect but odious, that the current form of the newspaper remains a good general fit for public interest journalism, merely going through a rough patch, then you’d be eager to dial down the ‘try anything’ ethic in favor of the hard, grinding work of rebuilding and shoring up the institutions that have served us so well these last several decades.

But if you believe, as I do, that many of those institutions are so mismatched to the task at hand that most of them face a choice, at best, between radical restructure and outright collapse, well, in that case, you’d probably find the smartest 25 year olds you know, and try to convince them that now would be a pretty good time to start working on Plan B.

Categories: Clay Shirky