Never before in history have people paid as much for information as they do today.
I’m guessing that by the time you reached the end of that sentence, you found yourself ROFLAO. I mean, WTF, this the Era of Abundance, isn’t it? The Age of Free. Digital manna rains from the heavens.
Sorry, sucker. The joke’s on you.
Do the math. Sit down right now, and add up what you pay every month for:
-Internet service
-Cable TV service
-Cellular telephone service (voice, data, messaging)
-Landline telephone service
-Satellite radio
-Netflix
-Wi-Fi hotspots
-TiVO
-Other information services
So what’s the total? $100? $200? $300? $400? Gizmodo reports that monthly information subscriptions and fees can easily run to $500 or more nowadays. A lot of people today probably spend more on information than they spend on food.
The reason we fork out all that dough is (I’m going to whisper the rest of this sentence) because we place a high monetary value on the content we receive as a result of those subscriptions and fees.
Now somebody remind me how we all came to think that information wants to be free.
It’s a strange world we live in. We begrudge the folks who actually create the stuff we enjoy reading, listening to, and watching a few pennies for their labor, and yet at the very same time we casually throw hundreds of hard-earned bucks at the saps who run the stupid networks through which the stuff is delivered. We screw the struggling artist, and pay the suit.
Somebody’s got a good thing going.
UPDATE: Alan Jacobs, over at Text Patterns, adds an interesting gloss to this post:
One of Nick’s commenters suggests that his point is misleading because we’re not paying all that much per bit of data. That’s probably true, but it may not make the point the commenter wants it to make. Consider an analogy to restaurant dining: Americans in the past twenty years have spent far, far more on eating out than any of their ancestors did, and that’s a significant development even if you point out that huge portions of fat-laden food mean that they’re not paying all that much per calorie. In fact, that analogy may work on more than one level: are we unhealthily addicted to information (of any kind, and regardless of quality) in the same way that we’re addicted to fatty foods?
Back when we were more conscious of what particular bits of information we were spending our information dollars on was our information diet (so to speak) healthier than it is today when we buy tickets to all-you-can-eat buffets? I’m not sure I know the answer to that question, but it’s a question worth pondering. It certainly underscores how silly it is to simply try to measure “cost per unit of information” as if that alone tells us anything. Unless, of course, you believe that every unit of information is identical in terms of quality and value.
Thank you as always for a provocative post.
Somebody earlier in the thread points out that some of these subscription services pay the content owners. The most obvious one is cable where there are famous carriage fights over pennies per subscriber.
I think it would be interesting to look at data here more closely especially as TV is about to move to the Internet perhaps.
For example, the theory with newspapers was once they moved online, there would be as reliable a source of advertising and subscriber revenue. That didn’t happen. Maybe it shouldn’t have–not passing judgment.
With TV, there is reportedly some $120 billion annually in costs to produce all the video you see on film, TV, cable, DVDs, etc.. Of that, some $80 billion comes from cable subscription fees. How about that figure. Three-quarters from cable. I somehow doubt that the studios are going to bet their lives on Hulu. Better to watch TV Everywhere and how that emerges.
This story ain’t about bits of data. It is about the ecosystem for content.
It’s interesting that the distributors have managed to continually reduce their costs of distribution yet keep raising prices. You can only do that if you are operating in a monopoly-type situation. These are regulated industries, they have the help of government to keep out competition.
But the other side of the coin is that they do ensure an ecoystem which employs lots of people. If they were open to the forces of disruption in distribution, there would be lots more people out of work. So is this good or bad? We are taught that open markets and level playing fields build the most successful companies. This clearly isn’t true in the distribution sector.
Great article, Nick.
The companies raking in the large monthly subscriptions use content as marketing. Content companies are starting to push back, but they have been struggling when pushing against the likes of Google and Apple…
“I “won’t pay for information” in the same sense that I won’t pay $30 for a lobster after I buy entry to an all-you-can-eat buffet.”
Hmm. The buffet owner had to buy the lobster.
How about Comcast and ATT etc have to pay royalties to content providers? Who wants to administer that?
I’m a musician who gets 1000s of streams per quarter on pandora and rhapsody, and I get a buck or 2 for all these plays. Thanks, “long tail!”
Interesting discussion here. Thanks Nick.
I keep waiting for you to discuss the work of Andrew Odlyzko, an academic specialist in the economics of information. His work is data-rich, often peer-reviewed, and directly relevant to many of your assertions here.
http://www.dtc.umn.edu/~odlyzko/doc/eworld.html
I’ve discussed this at length with a friend who recommended the post, I find it incredibly misguided.
I would like to comment on a lot of it but would result in a wall of text, however having read through your further comments it’s obvious where the crux of the problem is:
“Are you trying to draw a distinction between paying for information and paying for access to information? There’s no distinction. They’re the same thing.”
This couldn’t be further from the truth (with respect to the internet). ISPs are content agnostic, they do not care what data they are transferring. Their job is to provide access to the internet as a service, providing that service (building and maintaining the physical and logical network) requires a LOT of money, therefore internet access costs money.
People can then put their content on to the internet and offer it either for free in which case we pay nothing extra, or they can charge us for it, in which case we pay for the access and on top of that we pay for the content. Simply having an internet connection does not immediately give you access to all of the content online, some of it is protected and only available if you pay.
You make out the artist to be the poor ol’ small guy who is trodden on and the networks to be the big “suits”. If an artist is stupid enough to put his content online for free then he’s not going to get paid for it!
Nick
You challenged us to do the math. I did the math, and found you’re wrong. Dead wrong.
See: Fact Check
Nick, I think most of the debate about “free” information arises from a misreading of the statement “information wants to be free”. There is really only one way that info wants to be free: the costs of storage, hosting and distribution are approaching zero. As I’m sure you know, it’s cheaper than ever for content providers to distribute information online and to store that content. Look at any blogger who has successfully reached millions of readers by paying minuscule costs for hosting her content and giving readers unrestricted access to it. And these costs are continually decreasing, theoretically approaching zero. Social networks make it even cheaper to grow a user base; the incremental costs of adding the next user/reader are practically zero from a content distribution perspective. This is really what we should all keep in mind when we say, “Information wants to be free”. This argument, about the diminishing costs of distribution and storage, do not pertain to whether media companies can build businesses around pay models or anything like that. And this argument is not relevant to discussions about the costs of content production or marketing.
So, I guess I’m agreeing with you to some extend: Yes, as consumers we always pay through staggering Internet and cable bills. So information is really expensive, in that regard. But I think as we debate the idea of “free”, we should keep the word in its proper context.
I love it. Little late to the show but this is right up my alley. For $50 a month you can download thousands of dollars worth of illegal content…and then…the real kicker…throw it all away!
Forgive me if I’m being redundant to a preceding comment, but Mr. Carr (and consequently many commenters) have misstated the meaning of the quote his article uses in its title.
Information doesn’t want to be inexpensive, it wants to be unfettered. These two things are not the same. A little research would have revealed this. Instead, we now have more blog vomit in the world.
Actually, Mr. Smythe, you’re wrong. The original quote, from Stewart Brand, goes as follows: “On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time.” As you can see, Brand is explicitly using “free” in its cost sense here. The distinction between “free as in beer” and “free as in speech,” an important distinction, came later.
Yours,
Janitor Nick, official cleaner of Rough Type comment vomit