Changes More Fundamental Than News

In Clay Shirky’s essay on what will sustain the news business, he writes this:

I don’t know. Nobody knows. We’re collectively living through 1500, when it’s easier to see what’s broken than what will replace it. The internet turns 40 this fall. Access by the general public is less than half that age. Web use, as a normal part of life for a majority of the developed world, is less than half that age. We just got here. Even the revolutionaries can’t predict what will happen.


Shirky goes on to frame today’s “experiments” -- Wikipedia, Craigslist -- as equivalent to experiments in the age of the Gutenberg bible that led to the reordering of civilization. (Widespread literacy ultimately led to the protestant reformation and doubts cast upon writings of the ancients, Shirky writes, quoting other scholars.)
Today’s experiments are many. We don’t often talk about the ones that have failed, though there are many more of those than the Googles, MySpaces, Craigslists or Wikipedias (assuming you’re willing to confirm them as successes, nascent though they may be). Even experiments that may prove to be economic failures -- there’s no guarantee that either Facebook or Twitter will become self-sustaining -- have been so disruptive as to rend the fabric of the previous media orders. They are bringing about new forms of communication, technology and interaction that are fundamentally changing human behavior. Those able to harness these forces are finding themselves armed with great power to sway people, and earn a few bucks. Just ask President Obama. LINK
We don’t know what experiments will bear fruit today. The foundation model, citizen-funded journalism, micro-payments to solo operators, advertisers, subscriptions for high-end information. We do know, as Bill Battino acknowledged as I held up the report his research team at IBM had produced that will be available Monday for free, that information may not want to be free but it is (genuflection toward Chris Anderson) moving in that direction.

I put this disruption of news against the backdrop of the severe disruption of a financial system whose reward system has for decades been based on scarcity, control of and limits to information (why do you think traders will pay $1,200 - $1,600 for a Thomson Reuters or Bloomberg terminal on their desks?). We see in the anger over the relatively paltry revelation of the AIG bonuses how clouded and guarded information is, how hard it is even for analysts poring over disclosure statements filed with the SEC to figure out exactly what’s going on. (A significant amount of my MBA coursework was spent on ferreting out the hidden morsels in annual and quarterly reports that corporate officers are legally bound to report but are trying through obfuscation to hide.)

Not only do I think the information disruption will be much farther and wider than to the news business, but I also think this pressure is going to lead to changes in the way we handle finance, perhaps business in general. Imagine if there were transparency in the investment banking, private equity and venture capital worlds. How much less of a margin would the people in those worlds make? How would it change behaviors if the arbitrage was open and visible to all?

No comments: