Clay Shirky is smart, but that doesn’t make him right

Clay Shirky has an interesting post, Why Small Payments Won’t Save Newspapers, on whether micropayments will save the newspaper industry, sparked by Walter Isaacson’s cover story in Time. He makes Isaacson look silly. But I’m not sure Clay is right. For one thing, while we don’t like being nickel-and-dimed in negotiations over things like salaries, or the extras that come along with large purchases, people love bargains. I just subscribed to Fast Company because I like the magazine, and hey, $5 is such a deal for a one-year subscription! (I in effect am making a microtransaction, offline). What if the NYT or some other paper came up with a way to make people feel like they were getting a bargain by paying for a story?  What if they got to pay $1 for a digital week’s worth of the NYT, including the Sunday edition? Such a deal! Or perhaps I chip in a nickel if I want to comment on a story — be part of the conversation — is it worth paying to be part of the NYT’s community? (for more of Clay’s arguments, see this discussion of the problems with micropayments).
Microtransaction models have failed miserably, as he says. In fact, he calls them “a trope for desperation.” What’s wrong with being desperate? Desperation can inspire genius. Apple was desperate when it came up with the revamped model for iTunes that we know and love today. At the time, Apple was in such desperate shape that the music companies were completely unworried about letting their genie out of the bottle. That miscalculation saved Apple and forced the music companies into a future they didn’t want, which in turn has made them desperate.

A desperate news business might find a model that will work.
Clay argues that one model that won’t work is the community-driven virtual goods model. But he focuses on Korea’s CyWorld as if it’s an isolated oddity. In fact, there are scores of virtual sites in Korea and China that have been hugely successful at selling virtual goods of all sorts, all of them able to do this because they have figured out what Google already knows — if you control the server, you control what people can do with content. And then it’s a matter of having content people want. In short, they understand that people are willing to pay a little bit for content, virtual or otherwise, especially if there’s a community built around it that they want to be part of. It puts the lie, finally, to McLuhan’s assertion that what people really want from media is the advertising.
There may be no way for news organizations to control the server — their content has to be read. But the Wall Street Journal seems to have managed a hybrid model, something Clay ignores in this particular post.
Frankly, Clay offers up no better ideas for how to fund newspapers online. He waves his hands about how we are all media, as if that is the answer. I’m sorry, but journalism as a hobby reduces us to getting our news from the neighborhood gossip.
Clay also raises the very good point that we need new models for funding reporting. Right now, writers like me convince media organizations to fund them by hiring them, either full-time or in the short-term. Clay hints that we are asking the wrong organizations to publish us, and the 15,000 journalists who lost their jobs last year probably agree. So, it wasn’t that long ago that Chris Allbritton got Internet users to fund a reporting trip to Iraq. There were plenty of extremely talented correspondents going to Iraq, and yet Allbritton got people to pony up nearly $15,000 so he could go, too. Is Allbritton a one-off? Would a community-funding model possibly scale?

Steve Outing is arguing that it does, and the vehicle is Kachingle. He’s arguing in comments on his blog that this is a different model than internet currencies like Flooz and Beenz. To me, though, it boils down to him saying that content needs to go back to the model that funded Samuel Johnson, Mozart and other creative types of the past: patronage (and that always comes with strings of some sort attached).
I don’t know the answers, but I hope that the industry is getting desperate enough to find a model that is less dependent on advertising and free content. And I wouldn’t be so quick to dismiss the notion that people might actually pay for access to content, or online community, in some form.

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