The collaboration economy

Two events of recent days underscore for me how old-media executives are not comprehending the collaboration economy: how it adds value, how it creates efficiency, how it operates under new currencies.

Add this to the other blind spots these old media powers have about the new economic reality: the imperatives of the link economy, the need and benefit of giving up control, the advantages of creating open platforms over closed systems, the value of networks, the post-scarcity economy and the art of exploiting abundance, the need to be searchable to be found, the deflation innovation brings, the value of free, the triumph of process over product…. This is what I wrote in my book about. Trying to get media to understand it is why I wrote it.

Behind each of these new laws of the new age is a set of consequences that result if you don’t at least try to understand them and continue to operate under the expired rules of the industrial economy. We online folk tend to operate under entirely new assumptions and think that our legacy colleagues see the same world we do. But they don’t. That hit me square between the eyes – once again – this week at a Paley Center debate over paid content between Steven Brill and NPR chief Vivian Schiller.

“I don’t know of any worthwhile content that’s free,” Brill said at the start of his remarks. He said it as a truism, as if we’d all assume the same. But I think most of you reading this would think that false. You may not value this very blog, but it’s free. The web is filled with free wonders. There’s plenty of wonderful content that’s free, more every day.

Later, Brill suggested we imagine going into the New York Public Library and instead of seeing many books, we see millions of pages, loose and flying about. What would we do? His stated assumption is that we would recognized the need for professional editors and journalists to make sense of it all. My response to his question was, “Go to Google.” Not for the first time, he sneered at me. But others around the table agreed that Google brings together our editing through our links and clicks; we will make order of that pile of pages, given the means to do so. Our assumption is that we value those actions and opinions, even if they are free – perhaps all the moreso because they are free.

That afternoon, I finally read AP CEO Tom Curley’s remarks in Hong Kong – before his duet with Rupert Murdoch at the Forbidden City – in which he equated control with value. That is the distilled essence of the old media model.

Listen to Curley: “The value of that content has been undervalued. It’s now at the lowest level, I think in history…. But the reality is that all of us know that our content is valuable…. We deserve to be paid, and now it becomes a matter of trying to figure out how to do that…. It’s time for us to get control of our content, and so we shall do that.”

Curley is saying that it’s up to him – not us, not the market – to set value. That is possible only if one controls distribution. That is why he wants control – or wants it back. He asserts value as a matter of entitlement, emotions, and ego over economics. But in this open economy, there is unlimited competition and value is created in many places, measured in many currencies.

Curley says that “we intend to participate in that stream, in that revenue stream.” But what about the content stream? He needs to participate in what Marissa Mayer calls the hyperpersonal news stream. He has to break out of the idea of sites and portals and go to where the people are. Yet Curley said he’d prevent his customers from redistributing his content through emails or “re-syndication” – from the stream, in short.

Here’s the nub of it: Curley says, as has been quoted often already, that “there is an oversupply, at least in the short term, of us.” That is true only if you see the world in the old, owned, controlled, closed, centralized, professionalized, scarcity economy – only if you think you can own news and access to it and thus its price. In the post-scarcity economy, he can’t bear new competitors; he call them the oversupply.

But in the collaborative economy, it’s another matter. All those “extra” people add new value and efficiency – if you see the opportunity in it and enable them to. They’re us. That’s how Google sees us, capturing our links and clicks to discover the value of those million – no, trillion – flying pages. That’s how Wikipedia and Craigslist created their value, dealing in trust and membership as a new currency. That’s how I want next-generation news organizations to look at us, as the people who will create news while the news orgs add value to it: vetting, correcting, organizing, training, promoting, selling. The news orgs and their journalists then become so much more efficient because they work collaboratively with the public. That’s how they become sustainable and profitable again. But this happens only if you trust and value the others and understand the economics of collaboration.

Curley talks, at last, about wanting to link to journalism at its source, which is important, since the AP has long cut the link to original journalism by rewriting it, by turning it into a commodity. But Curley talks about his news registry doing this among his closed circuit of members and big old companies – not the unlimited number of witnesses and citizens who will create news now. He talks about creating “our own self-referring network” (after talking nonsense about Google referring to itself nine times out of ten when Google links out to news far more than the AP ever does). He still sees a closed, controlled world where he sets the value. He, like Brill, does not respect the links and clicks and creation of people outside their walls, paid or otherwise because he can’t control it and he thinks that control is what still gives him value; the truth in the new economy is exactly the opposite: You gain value by giving up control. They do not see the value in collaboration and collaboration as a key to the creation of value and the recognition of efficiency of the new news economy.

  • Andy Freeman

    Curley’s biggest mistake is forgetting that the reader has choices too.

    It’s past time for Google search to cut off a couple of newspapers and AP to demonstrate that fact.

    As to value of news, Craigslist and PennySaver proved that a lot of people were buying newspapers for the ads, not the news.

    BTW – Content on buzzmachine is NOT free. No content is free. Consumers always pay in time and attention. In some cases, that can be monetized (to a point).

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  • http://www.portagemedia.com/socialcommentary Jeremiah Staes

    Long live the innovator who commoditizes content! Until, of course, the next wave comes along that commoditizes YOU. :)

    Always the irony of a business cycle. The innovator pushes for change, for making things more streamlined, for choices, until which point they’re the establishment and don’t want/can’t innovate to keep up. And then we go ’round the wheel again.

  • http://www.hoghouseblog.com Denise Ross

    When I used to report for a small daily newspaper, the AP treated us with about as much respect as it seems to now be regarding its readers. It viewed our content as theirs to do with what they would, which often meant distributing it to our competitors at about the same time our newspaper hit the streets. (Their most recent habit was to simply raid the paper’s website when we didn’t send the stories along through established channels soon enough for their taste.)

    There’s a long-entrenched mentality there that probably can’t be shaken.

  • KP

    Well, hi, I’m KP from Germany and a huge fan of FREE, and I think building paywalls around news isn’t the way to go.

    But:

    I do think that agencies like AP or dpa in Germany should work on aggregators of professional online content themselves, and they should add real value to the content – like (semantic web) meta data – and then they should license this structured data as a perfect live feed to Google, Microsoft, Yahoo and whoever wants it. I am sure Google & Co would be willing to pay for such a rich feed of high quality online content – just like they seem to be willing to pay for a Twitter feed.

    In this scenario, everyone’s a winner,:

    Google & Co
    - get perfectly structured content, faster (even live)
    - can better monetize it than (even on GNews)
    - is the good guy even in the eyes of the publishers

    AP or dpa
    - collects millions from Google & Co
    - finds a new and role in the industry
    - will be profitable again

    Publishers
    - get significant revenue shares from the AP or dpa
    - get even better search traffic (cuz Google offers better serps)
    - don’t have to build paywalls anymore
    - embrace Goolge & Co as friends (stupid war is over)

    Users/Readers
    - get better serps
    - get better news services
    - have access to all the content for FREE

    I cannot see any reason for this concept not to take off, just look at what is going on with Twitter and the search engines right now … oh I so want this to happen :)

    Cheers,
    KP

    • Andy Freeman

      You’re assuming that:
      (1) Human-added semantic tags are worth more to Google than it costs to add them. (Google can generate robo-tags better than AP.)
      (2) The tagging organization (AP?) will share the profit with news gatherers.

      Neither seems to be true.

      Of course, semantic tags could be added by news gatherers. In that case, the money goes to them, not AP.

      However, if those tags aren’t worth enough, none of that matters.

      • KP

        @1 Oh no, the extra data isn’t just tags, it’s also pictures, videos, all sorts of (local) entity data that sits behind editorial walls today, and it is not supposed to be human-added, of course. I was thinking of two things basically:

        - Instead of manual tagging it would have to be a mechanism like Reuters’ Calais

        - Plus, and this is even more important, the AP would have to cooperate with their clients/shareholders in a way that Google & Co can’t (because most publishers still consider Google a worse enemy than AP ;-) i.e. publishers delivered their rich structures multi-media content back to the AP, and AP would A) add it to the general feed and B) use the stuff to continue the story telling (find new aspects, drill down deeper, add historical data, add links to it, etc.) in order to improve their own news product

        @2 AP would have to share their profit with the publishers, yes, and that’s what they already do – as long as they are profitable

        Okay, having in mind the mindset of the people involved both at the AP and at the publisher houses, this scenario is not going to happen, at least not within the next two or three years, and that could already be too late, I’m afraid.

        But be it as it may, the only way for the AP (or similar agencies in other countries) to save their ass is

        1. to collaborate with their clients/shreholders very intensively
        2. to create something special and valuable from this cooperation
        3. to license this new value to the big guys in the information/ad business

        To make this happen, AP would have to focus on their core definition – being a (THE) service provider for publishers – instead of fighting windmills. If they worked on this very very hard, all the pieces would fall into place.

      • Andy Freeman

        There actually isn’t that much unique&valuable data behind traditional editorial walls. (The porn industry has the same problem. Why should I read what a legal reporter writes when I can go to places like volokh.com and get the story from experts and participants?) That means that AP’s relationships aren’t worth much even if they worked, which they don’t.

        Google and others do robo better than AP/Reuters.

        In short, outsiders are more capable and better positioned to execute that plan than AP/Reuters, so why do you see it as a way for AP/Reuters to survive?

        Remember – no one outside AP/Reuters cares whether AP/Reuters survives. Yes, we want services, but we don’t much care who provides them.

        BTW – Institutions don’t “have to” do anything. In fact, they typically die instead of making fundamental changes that would allow them to survive. Any “plan” which assumes otherwise is a fantasy.

      • KP

        D’accord, it all comes down to the imperative „change or die“, and this very blog here is one of the many places where the debate is about change. The reason why we discuss this is the importance of independent media to our democracies (unlike porn). Yes, the old publishing business model doesn’t work anymore. But does that mean we don’t need the product (financially backed-up independent information) anymore? I don’t think so.

        Jeff Jarvis is doing a great job in trying to help news orgs to finally adopt to the new rules, to accept that Google has created a service that should have been created by the media 10 years ago (of course they haven’t done it because they were – still are – too focused on their old business).

        I believe that Google knows how important the media product is, and from what I read in interviews with Eric Schmidt he (Google) does want a strong media industry himself.

        My assumption is that if the media joined forces in a productive (as opposed to a protective) way and created a new accurately structured and comprehensively integrated content feed/API, Google would bet he first to sign the contract. And this wouldn’t be about short-term business only, it would also be about strategy and image, about Google being the good guy again and forever.

        Rgd. Google has better robos: I think that Google Serps and Google News could do a lot better. There are too many false/irrelevant results and, for instance, wrongly attached images (at least on Google News Germany), and there is no drill down at all. Reuters’ OpenCalais is both technically and conceptually far ahead of what Google does.

        This doesn’t help the AP, of course, but it shows them how to do it: go find the next innovator in content refinement, buy them and start the integration process as quickly as possible.

      • Andy Freeman

        > The reason why we discuss this is the importance of independent media to our democracies

        You’re confusing an ideal of how media operates with reality. In this world, losing “independent media” wouldn’t matter much because that media doesn’t do much of value.

        If you want people to care about media, you must have a media worth caring about. We don’t.

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  • http://www.gholubowicz.com Gerald

    Hi Jeff, I talked about creating a new model to finance photojournalism on my blog bulb. http://tinyurl.com/ylochuv As I try to apply this concept to photojournalism, it appears obvious that our “old” economic model is a total mess and by building walls around us. Collaboration for a journalist is the tool to destroy those walls and finally return to the roots of our profession, wich is giving the news of peoples for peoples.

  • http://www.thebatavian.com Howard Owens

    Any time somebody says, “I deserve to get paid,” he’s essentially saying, “I’m a communist.”

    Only communists believe that there should be an imposed, fixed value on the product of labor.

    The free market says something very different: You are only worth what the market says you’re worth.

    Curley admits that content has lost value. That’s the market speaking.

    If the market says your content is only worth a penny, then it’s only worth a penny, and you don’t “deserve” a penny more. You only deserve what the market is willing to give you.

    It has nothing to do with a network economy. It has to do with supply and demand. The “network economy” (if you want to call it that) has merely increased the supply and lessened the demand for any one specific piece of content, or the content from any specific supplier.

    If media executives would think about this problem like business people rather than communists, perhaps they could find a solution.

  • Rob Levine

    >>>You may not value this very blog, but it’s free. The web is filled with free wonders. There’s plenty of wonderful content that’s free, more every day.

    Jeff, please tell us how much you make from this blog! The fact is that _most_ – not all, but most – of those “wonders” are losing money.

    • http://www.buzzmachine.com Jeff Jarvis

      It’s in my book, Rob, and I’ve repeated it here often. Two years ago, this blog made $13,300 in advertising; last year, as I recall, about $17,000; this year, with the crash, it will be much less. I don’t even really try to make ad money here because it’s hard to make sales in the media wonk industry. But because of the blog, I got a high-paying teaching job on the public dole ;-); I got a book contract; I get consulting and speaking gigs; there are many ways to recognize revenue and value. Over its life – which I hope will be long – this blog will be worth a lot to me. Yes, most of the millions of blogs don’t make money; they don’t try to. But more and more are professional. See Technorati’s latest State of the Blogosphere report on exactly that point. http://www.docstoc.com/docs/13297824/Technorati-SOTB-2009

      • Rob Levine

        Yes, but that’s another way of saying that free media “wonders” live on cross-subsidies – in economic terms, this blog is a marketing expense rather than a product in its own right. There’s nothing wrong with that. But it’s worth pointing out that: first, one might hesitate to regard such sources as neutral; and, second, it’s not really a model for how anyone can make money in a pure media play.

        By their very nature, consulting and speaking gigs are limited. So I think it’s short-sighted to suggest that promoting a consulting business is any kind of model for media.

        • http://www.buzzmachine.com Jeff Jarvis

          Rob,
          You asked me about MY blog. I’m not trying to run a hyperlocal business. I’m blogging to be part of the conversation. That is my business model. The rest is gravy.
          In our New Business Models for News Project at CUNY, we go through much detail research and modeling involving hyperlocal and local news businesses that are run as businesses and, we believe, can be not only sustainable but profitable.

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  • http://allcollaboration.com/ Lokesh Datta

    I have wondered aloud if the current organizational mechanisms are dead, to be replaced by flexible collaborative formations, within or across companies. See: http://allcollaboration.squarespace.com/home/2009/6/5/organizational-challenges.html

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