Among the audience A survey of new media April 22nd 2006
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Among the audience Also in this section
It’s the links, stupid Blogging is just another word for having conversations. Page 3
Compose yourself Journalism too is becoming interactive, and maybe better. Page 5
The wiki principle Are many minds better than a few? Page 8
Heard on the street Podcasting will change radio, not kill it. Page 9
Wonders of the metaverse A fantasy world where people make their own lms. Page 10
The gazillion-dollar question So what is a media company? Page 11 The era of mass media is giving way to one of personal and participatory media, says Andreas Kluth. That will profoundly change What sort of revolution? both the media industry and society as a whole Both good and bad but it’s too early to say in HE next big thing in 1448 was a technol- tried to stop, then control, then co-opt the what proportions. Page 13 Togy called movable type , invented new medium. In the centuries that fol- for commercial use by Johannes Guten- lowed, social and legal systems adjusted berg, a goldsmith from Mainz (although (with copyright laws, for instance) and the Chinese had thought of it rst). The books, newspapers and magazines began clever idea was to cast individual letters to circulate widely. The age of mass media (type) and then compose (move) these to had arrived. Two more technological make up printable pages. This promised to breakthroughs radio and television disrupt the mainstream media of the day brought it to its zenith, which it probably the work of monks who were manually reached around 1958, when most adult transcribing texts or carving entire pages Americans simultaneously turned on into wood blocks for printing. By 1455 Mr their television sets to watch I Love Lucy . Gutenberg, having lined up venture capi- tal from a rich compatriot, Johannes Fust, Second incarnation was churning out bibles and soon also pa- In 2001, ve-and-a-half centuries after Mr pal indulgences (slips of paper that rich Gutenberg’s rst bible, Movable Type people bought to reduce their time in pur- was invented again. Ben and Mena Trott, gatory). The start-up had momentum, but high-school sweethearts who became Acknowledgments its costs ran out of control and Mr Guten- husband and wife, had been laid o dur- The author would like to thank all those who helped in the berg defaulted. Mr Fust foreclosed, and a ing the dotcom bust and found themselves writing of this survey. Particular thanks go to Orville Schell little bubble popped. in San Francisco with ample spare time. at the Graduate School of Journalism of the University of California at Berkeley, Lee Rainie at the Pew Internet & Even so, within decades movable type Ms Trott started blogging ie, posting to her American Life Project, Kelly Delaney at Yahoo! and Reed spread across Europe, turbo-charging an online journal, Dollarshort about stupid Hastings at Net ix. information age called the Renaissance. little anecdotes from my childhood . For Martin Luther, irked by those indulgences, reasons that elude her, Dollarshort be- A list of sources can be found online used printing presses to produce bibles came very popular, and the Trotts decided www.economist.com/surveys and other texts in German. Others fol- to build a better blogging tool , which lowed suit, and vernaculars rose as Latin they called Movable Type. Likening it to An audio interview with the author is at declined, preparing Europe for nation- the printing press seemed like a natural www.economist.com/audio states. Religious and aristocratic elites rst thing because it was clearly revolutionary;1 2 A survey of new media The Economist April 22nd 2006
2 it was not meant to be arrogant or grandi- This has profound implications for tra- and turn them into conversations . That is ose, says Ms Trott to the approving nod of ditional business models in the media in- because institutions are closed, assume a Mr Trott, who is extremely shy and rarely dustry, which are based on aggregating hierarchy and have trouble admitting fal- talks. Movable Type is now the software of large passive audiences and holding them libility, he says, whereas conversations are choice for celebrity bloggers. captive during advertising interruptions. open-ended, assume equality and eagerly These two incarnations of movable In the new-media era, audiences will occa- concede fallibility. type make convenient (and very approxi- sionally be large, but often small, and usu- Today’s media revolution, like others mate) historical book-ends. They bracket ally tiny. Instead of a few large capital-rich before it, is announcing itself with a new the era of mass media that is familiar to media giants competing with one another and strange vocabulary. In the early 20th everybody today. The second Movable for these audiences, it will be small rms century, Charles Prestwich Scott, the edi- Type, however, also marks the beginning and individuals competing or, more often, tor, publisher and owner of the Manches- of a very gradual transition to a new era, collaborating. Some will be making ter Guardian (and thus part of his era’s which might be called the age of personal mainstream media), was aghast at the or participatory media. This culture is al- word television , which to him was half ready familiar to teenagers and twenty- Greek, half Latin: no good can come of it. somethings, especially in rich countries. Mr Scott’s equivalents today confront even Most older people, if they are aware of the stranger neologisms. Merriam-Webster, a transition at all, nd it puzzling. publisher of dictionaries, had blog as its Calling it the internet era is not help- word of the year in 2004, and the New Ox- ful. By way of infrastructure, full-scale par- ford American Dictionary picked pod- ticipatory media presume not so much the cast in 2005. Wikis , vlogs , meta- availability of the (decades-old) internet verses and folksonomies (all to be as of widespread, always-on , broad- explained later in this survey) may be next. band access to it. So far, this exists only in South Korea, Hong Kong and Japan, Word count whereas America and other large media These words! The inability of the English markets are several years behind. Indeed, language to express these new things is even today’s broadband infrastructure distressing, says Barry Diller, 64, who ts was built for the previous era, not the com- the description media mogul . Over the ing one. Almost everywhere, download decades, Mr Diller has run two big Holly- speeds (from the internet to the user) are wood lm studios and launched Amer- many times faster than upload speeds ica’s fourth broadcast-television network, (from user to network). This is because the FOX Broadcasting. More recently, he has corporate giants that built these pipes as- made a valiant e ort to get his mind sumed that the internet would simply be around the internet, with mixed results, another distribution pipe for themselves and is now the boss of IAC/InterActive- or their partners in the media industry. Corp, a conglomerate with about 60 on- Even today, they can barely conceive of a money from the content they create; oth- line brands. Mr Diller concedes that all of scenario in which users might put as much ers will not and will not mind, because the distribution methods get thrown up in into the network as they take out. they have other motives. People creating the air, and how they land is, well, still up stu to build their own reputations are at in the air. Yet Mr Diller is con dent that The age of participation one end of this spectrum, says Philip Evans participation can never be a proper basis Exactly this, however, is starting to hap- at Boston Consulting Group, and one-man for the media industry. Self-publishing pen. Last November, the Pew Internet & superbrands such as Steven Spielberg at by someone of average talent is not very American Life Project found that 57% of the other. interesting, he says. Talent is the new American teenagers create content for the As with the media revolution of 1448, limited resource. internet from text to pictures, music and the wider implications for society will be- What an ignoramus! says Jerry Mi- video. In this new-media culture, says Paul come visible gradually over a period of de- chalski, with some exasperation. He ad- Sa o, a director at the Institute for the Fu- cades. With participatory media, the vises companies on the uses of new media ture in California, people no longer pas- boundaries between audiences and cre- tools. Look around and there’s tons of sively consume media (and thus ad- ators become blurred and often invisible. great stu from rank amateurs, he says. vertising, its main revenue source) but In the words of David Sifry, the founder of Diller is assuming that there’s a nite actively participate in them, which usually Technorati, a search engine for blogs, one- amount of talent and that he can corner it. means creating content, in whatever form to-many lectures (ie, from media compa- He’s completely wrong. Not everything and on whatever scale. This does not have nies to their audiences) are transformed in the blogosphere is poetry, not every to mean that people write their own into conversations among the people audio podcast is a symphony, not every newspaper , says Jeremy Zawodny, a formerly known as the audience . This video vlog would do well at Sundance, prominent blogger and software engineer changes the tone of public discussions. and not every entry on Wikipedia, the free at Yahoo!, an internet portal. It could be as The mainstream media, says David Wein- and collaborative online encyclopedia, is simple as rating the restaurants they went berger, a blogger, author and fellow at Har- 100% correct, concedes Mr Michalski. But to or the movie they saw, or as sophisti- vard University’s Berkman Centre, don’t exactly the same could be said about cated as shooting a home video. get how subversive it is to take institutions newspapers, radio, television and the1 The Economist April 22nd 2006 A survey of new media 3
2 Encyclopaedia Britannica. sion of creativity: a owering of feel it threatens public discourse, civility What is new is that young people to- expressive diversity on the scale of the and even democracy. day, and most people in future, will be eponymous proliferation of biological This survey will examine the main happy to decide for themselves what is species 530m years ago. We are entering kinds of new media and their likely long- credible or worthwhile and what is not. an age of cultural richness and abundant term e ects both on media companies and They will have plenty of help. Sometimes choice that we’ve never seen before in his- on society at large. In so doing, it will be they will rely on human editors of their tory. Peer production is the most powerful careful to heed a warning from Harvard’s choosing; at other times they will rely on industrial force of our time, says Chris Mr Weinberger: The mainstream media collective intelligence in the form of new Anderson, editor of Wired magazine and are in a good position to get things wrong. ltering and collaboration technologies author of a forthcoming book called The The observer, after all, is part of the ob- that are now being developed. The old Long Tail , about which more later. (Mr servation a product of institutional me- media model was: there is one source of Anderson used to work for The Economist.) dia values even if he tries to apply the new truth. The new media model is: there are At the same time, adds Mr Sa o, revo- rules of conversation. This points to the multiple sources of truth, and we will sort lutions tend to suck for ordinary people. very heart of the coming era of participa- it out, says Joe Kraus, the founder of Jot- Indeed, many people in the traditional me- tory media. It must be understood, says Mr Spot, which makes software for wikis. dia are pessimistic about the rise of a par- Weinberger, not as a publishing phenom- The obvious bene t of this media revo- ticipatory culture, either because they be- enon but a social phenomenon . This is il- lution will be what Mr Sa o of the Insti- lieve it threatens the business model that lustrated perfectly by blogging, the subject tute for the Future calls a Cambrian explo- they have grown used to, or because they of the next article. 7 It’s the links, stupid
Blogging is just another word for having conversations
F YOU want to have a fun debate, ask at the time, Jorn Barger, called his site a blogs, two highlight the quintessentially Ibloggers what a blog is, says Jeremy weblog . In 1999, another user, Peter Mer- social nature of blogging. The rst is a Zawodny at Yahoo! Only a few years ago, holz, playfully broke the word into we blogroll , along the side of the blog page, that debate would have been short. So few blog , and somehow the new term blog which is a list of links to other blogs that people blogged that most of them knew stuck as both a verb and a noun. Techni- the author recommends (not to be con- one another and could probably agree on a cally, it means a web page to which its fused with the hyperlinks inside the de nition. Today a new blog is created ev- owner regularly adds new entries, or posts). In practice, the blogroll is an at- ery second of every day, according to Tech- posts , which tend to be (but need not be) tempt by the author to place his blog in a norati, a search engine for blogs, and the short and often contain hyperlinks to speci c genre or group, and a reciprocal ef- blogosphere is doubling in size every other blogs or websites. Besides text and fort by a posse of bloggers to raise each ve months (see chart 1). From teenagers to hypertext, posts can also contain pictures other’s visibility on the internet (because corporate executives, the new bloggers all ( photoblogs ) and video ( vlogs ). Each the number of incoming links pushes a have reasons of their own for engaging in post is stored on its own distinct archive blog higher in search-engine results). The this new pursuit. page, the so-called permalink , where it other feature is trackback , which noti es What, then, is a blog? A personal on- can always be found. On average, Techno- ( pings ) a blog about each new incoming line journal is the de nition that most rati tracks some 50,000 new posts an hour. link from the outside a sort of gossip-me- newspapers, including The Economist, of- Among the other technical features of ter, in short. fer when they need to be brief. That anal- Blogging is also about style. Dave ogy is not wrong, but nor is it entirely right Winer, a software engineer who pio- (conventional journals usually come in The start of something big 1 neered several blogging technologies, and chronological order, whereas blogs are dis- Weblogs tracked, m who keeps what by his own estimate is the played in reverse chronological order, longest-running blog of all (dating back to with the most recent entry on top). More 30 1997), has argued that the essence of blog- importantly, this de nition misses the 25 giness is the unedited voice of a single main point about blogs. Traditionally, person , preferably an amateur. Blogs, in journals were private or even secret a airs, 20 other words, usually have a raw, unpol- and were never linked to other journals. 15 ished authenticity and individuality. This Peeking into the diary of one’s big sister de nition would exclude quite a few of typically led to a skirmish. Blogs, by con- 10 the blogs that rms, public-relations peo- trast, are social by nature, whether they are 5 ple or newspapers set up nowadays. If an open to the public as a whole or only to a editor vets, softens or otherwise messes small select group. 0 about with the writing, Mr Winer would The word blog appears to date back 2003 04 05 06 argue, it is no longer a blog. to 1997, when one of the few practitioners Source: Technorati This explains the initial appeal of blog-1 4 A survey of new media The Economist April 22nd 2006
2 ging as an outlet for pure self-expression. As Glenn Reynolds of Instapundit, a well- known blog on American politics, put it when asked why he blogs: It beats yelling at the television. But venting an opinion is usually only the start. At rst, I saw it as about publishing; now I see it more as a revolutionary way to communicate, says Mena Trott. The company she runs with her husband Ben, Six Apart, illustrates this with its three main products. Their ag- ship, Movable Type, with its obvious pub- lishing connotations, is a popular software service for heavy-duty or celebrity blog- gers, including Mr Reynolds. So is TypePad, a similar service with web-hosting thrown in. Blogs powered by these two products have an average of 600 readers, says Ms Trott, although a few are read by more peo- ple than are some newspapers. But Six Apart’s third product, LiveJour- nal, is a very di erent kind of blogging tool. Some 60% of LiveJournal users are under 21 and female, says Ms Trott. Many of the posts are about who snogged whom clans, tribes, fan clubs, start-ups and other kitschy, and subsequently dug up an ob- last night and what happened next, why groupings remain well below this limit, as scure photograph from a Nazi convention I’m sad, how adults don’t get it, and so do most blog networks. in 1935 that showed Hitler’s face next to the forth. Other posts ask things like, Any- The LiveJournal groups of readers are awkwardly similar slogan Denn Du bist body want to catch King Kong at 8:00? typical of the new-media era in another Deutschland ( because you are Ger- and have the replies in the comment pane way. The bloggers (ie, creators) are one an- many ). In the ensuing online conversa- below within minutes. That is because other’s audience, so that distinctions be- tion, Mr von Matt’s campaign was igno- many adolescents consider e-mail passé, tween the two disappear. Creators and au- miniously de ated. Outraged, he sent an and instead are using either instant mes- diences congregate ad hoc in meandering internal e-mail to his colleagues in which saging (IM) or blogging for their communi- conversations, a common space of shared he called blogs the toilet walls of the in- cations, says Ms Trott. Like blogging, e-mail imagination and interests. MySpace.com, ternet and wanted to know: What on was supposed to be asynchronous , a social-networking and blogging service earth gives every computer-owner the meaning that the people taking part do not that last year was bought by News Cor- right to express his opinion, unasked for? have to be online simultaneously. But to- poration, Rupert Murdoch’s media con- When bloggers got hold of this e-mail, they day’s adolescents have never known glomerate, re ects this quality in its name. answered his question with such clarity e-mail without spam and see no point in Conversations have a life of their own. that Mr von Matt quickly and publicly long trails of reply and cc messages pil- They tend to move in unexpected direc- apologised and retreated. ing up in their in-boxes. As for synchro- tions and uctuate unpredictably in vol- Inadvertently, Mr von Matt had put his nous communication, why adults would ume. It is these unplanned conversational nger on something big: that, at least in send e-mails back and forth instead of surges that tend to bring the blogosphere democratic societies, everybody does IM-ing is beyond them. to the attention of the older and wider have the right to hold opinions, and that (non-blogging) public and the mainstream the urge to connect and converse with oth- The Dunbar number media. Germany, for instance, has been a ers is so basic that it might as well be added For these LiveJournal blogs, the average relatively late adopter of blogging only to life, liberty and the pursuit of happi- number of readers is seven, says Ms Trott. 1% of blogs are in German, according to ness. It’s about democratisation, where Such small audiences are common in par- Technorati, compared with 41% in Japa- people can participate by writing back, ticipatory media. Indeed, they may con- nese, 28% in English and 14% in Chinese. says Sabeer Bhatia, who in March form to the biological norm, whereas But in January this year the conversa- launched a company called BlogEvery- mass-media audiences may have been an tion arrived in Germany with a ven- where.com that lets people attach blogs to aberration. Robin Dunbar, an anthropolo- geance. Jung von Matt, a German advertis- any web page with a single click. Just as gist at the University of Liverpool, has ing rm, had come up with a campaign in everybody has an e-mail account today, studied primates and discovered a surpris- the (old) media called Du bist Deutsch- everybody will have a blog in ve years, ingly stable ratio between the relative size land ( you are Germany ). The advertise- says Mr Bhatia, who helped to make e- of the neocortex (thought to be responsi- ments were intended to ght grumpi- mail ubiquitous by starting Hotmail, a ble for the evolution of intelligence) and ness about the country’s sluggish web-based e-mail service now owned by the size of groups formed by particular economy, said Jean-Remy von Matt, the Microsoft. This means, Mr Bhatia adds, species. For humans, Mr Dunbar calcu- rm’s Belgian boss. that journalism won’t be a sermon any lated, the upper limit is about 150. Many But German bloggers found the idea more, it will be a conversation. 7 The Economist April 22nd 2006 A survey of new media 5
Compose yourself
Journalism too is becoming interactive, and maybe better
E CHANGED South Korean poli- and conversation panes at the bottom of journalism. After a year or so of looking in Wtics and the media market, but I’m online articles and are trying to interact vain for a good business model, Mr Gill- too shy to say that, says Oh Yeon Ho be- more with readers. Mr Oh, who left his ca- mor has put the idea on ice. fore he can catch his own irony. But Mr Oh, reer in the mainstream media because he But others are much more optimistic. the founder and boss of Ohmy News, a was sick of what he saw as their conserva- Last year Al Gore, a former American vice- sort of online newspaper, has earned the tive bias, also reckons that Ohmy has president, and Joel Hyatt, his friend and right to boast, because Ohmy is the helped to improve the balance. If the me- business partner, set up Current TV, a ca- world’s most successful example to date of dia scales used to be tilted 80% in favour of ble-television channel that encourages its citizen journalism in action. conservatives, he thinks, Ohmy has re- viewers to contribute their own video sto- Ohmy’s website currently gets an aver- duced that to 60%; he wants to make it 50%. ries. And they do. Viewer-created con- age of 700,000 visitors and 2m page views tent or VC2 , as Current TV calls it a day, which puts it in the same league as a What works, and what doesn’t now accounts for 30% of the channel’s air- large newspaper. But Ohmy has no report- Does South Korea, a country of early time, and rising. Mr Hyatt, the chief ers on its sta at all. Instead, it relies on am- adopters in many ways, foreshadow the executive, thinks it will eventually be half ateurs citizens , as Mr Oh prefers to call future everywhere? The reality is that you or more. To help people get started, Cur- them to contribute the articles, which are can’t point to many successes; Ohmy News rent TV has extensive online tutorials on then edited by Mr Oh, a former magazine is the only one, says Dan Gillmor, a jour- storytelling techniques, camera equip- journalist, and a few colleagues. Mr Oh nalist who quit his job at the San Jose Mer- ment and so forth. And to organise the con- likes to think of Ohmy as a playground cury News, a newspaper widely read in Sil- tent that comes in, its website allows users for South Korean hobbyists, where icon Valley, in order to found Grassroots to vote on the quality of each video clip. It adults set certain rules and thus give the Media, an experiment in American citizen is, in many ways, a pure meritocracy. site credibility. The articles tend to be When Current TV was launched, the good, because in South Korea we have traditional cable channels didn’t get it good people power, says Mr Oh. They and sneered, Mr Hyatt recalls with glee. are highly educated and eager to change What people didn’t understand is that society. Ohmy also has built-in feedback there are tens of thousands of people out and rating systems so that the best articles there who can create something great for a rise to the top. few minutes. For instance, a story by an One of Ohmy’s biggest innovations is American traveller who found himself in economic. The site has a tip-jar system the Gaza Strip during Israel’s pull-out was that invites readers to reward good work probably the best piece of video reporting with small donations. All they have to do on the subject that ran on television at the is click a little tip-jar button to have their time. During Hurricane Katrina, some resi- mobile-phone or credit-card account deb- dents of New Orleans made excellent con- ited. One particularly good article pro- tributions by taking cameras onto their duced the equivalent of $30,000 in just home-made boats and making videos of ve days. Ohmy’s own economics also ap- their own neighbourhoods. pear to be working well. Even though Mr Yahoo! provides an even bigger exam- Oh originally intended the company to be ple of the cheerful mixing of professional not-for-pro t my aim was not to earn and amateur content (as opposed to money but to create a new kind of journal- Ohmy’s insistence on the purely amateur). ism, he says he turned it into a for-pro t For instance, a lot of the articles, photos, rm in 2003. He will not divulge how audio and video on Yahoo! News come much pro t he makes, but the advertising from corporate partners such as Associ- and syndication revenues (from other in- ated Press or CNN. A tiny bit comes from ternet sites that run Ohmy’s articles) seem Yahoo! itself (speci cally, from Kevin Sites, to keep him going nicely. a one-man camera team who travels to ex- Ohmy’s success has already had wide otic and dangerous war zones around the rami cations in South Korea’s media in- world). But more and more content comes dustry. Although it has not killed o any from citizens Yahoo!’s users says Scott South Korean newspapers or broadcasters, Moore, who runs Yahoo!’s news and - it has forced all of them to adjust by be- nance pages. Indeed, Yahoo! explicitly al- coming more like Ohmy. Several newspa- lows users not only to contribute content per sites, for instance, now have feedback but also to take part in its ltering and1 6 A survey of new media The Economist April 22nd 2006
2 placement, he says. These new collabora- tive processes even have a name folks- onomies to distinguish them from the top-down taxonomies that human edi- tors traditionally create. For example, during the terrorist at- tacks on London’s Underground last year, quite a few people in the wrecked trains took haunting photos with their mobile phones. They then wirelessly uploaded these to Flickr, a photo-sharing site owned by Yahoo! Other users then tagged these photos by attaching labels such as Lon- don Underground or bombings to them so that they could be easily found. The same or other users then spontaneously rated the pictures. This in turn brought the best pictures to the attention of Yahoo!’s human editors, who displayed them prominently alongside professional content across Yahoo!’s news sites. All of this happened within minutes. The citizen journalism brought out by events such as the London bombings, Ka- trina, Asia’s tsunami and other recent the title of his 2004 book, The Vanishing like a global trading place. Last November, events has sent a new joke into the blo- Newspaper . The last reader will recycle Google launched Google Base , a free ser- gosphere: that Andy Warhol’s proverbial the last newspaper in April 2040, Mr vice that allows users to upload anything 15 minutes of fame have now become Meyer estimates. If so, one of the most visi- including classi eds free of charge. These 15 megs (megabytes) of fame for every- ble products of Gutenberg’s movable type are consummate trading and advertising body on earth. That may be true. But the would expire eight years short of the print- machines for which journalism would be area of citizen journalism that is currently ing press’s 600th anniversary. a ridiculous distraction , says Mr Gillmor, growing fastest, according to Mr Moore, is By common consent, the newspaper in- who now works as an industry researcher. the least glamorous end: the so-called dustry is in a perfect storm. In America, cir- That’s hard to compete with if your main hyper-local coverage of, say, high-school culation has been gradually but steadily cost centre is journalism. sports or petty neighbourhood crime, falling since 1990, according to Editor & Two bitter ironies serve to deepen the which is usually too small even for local Publisher, a trade journal. The trend in gloom. The rst is that advertisers have newspapers. This is one reason, says Mr other countries is much the same. Most been even slower to adjust than the news- Moore, why in almost every market in the young people nowadays do not read a papers themselves. After an admittedly US we’re already the number two provider daily newspaper at all. To make matters delayed start, the papers are now getting of local news, after the leading local news- worse (and to devalue the argument that better at helping their readers to move to paper, and that’s without even putting a society must preserve newspapers as their online o erings, so their customers lot of focus into it. trusted sources of news), the industry as a whole are not actually defecting. But For society as a whole, all this new tal- has been through a string of scandals, the advertisers do not value the two media in ent from bloggers, who are journal-ists most ignominious being the New York the same way. Lauren Rich Fine, a nancial in the classic sense, to citizen journalists Times’s asco with Jayson Blair, one of its analyst of newspapers, estimates that for should amount to something overwhelm- reporters who simply made up his stories. every advertising dollar that a newspaper ingly positive. The more journalism the According to The State of the News Media, gets for a print reader, it receives only 20-30 better; I don’t care who does it, says Dan an annual American research project, the cents for his online equivalent. Even Gillmor. That is not, however, how profes- industry has laid o more than 3,500 though online advertising is growing by sional journalists, ostensibly speaking on newsroom professionals since 2000, 30% or more a year, this is from a tiny base. behalf of the public, usually choose to see about 7% of the total. In hard-hit Philadel- Pip Coburn, an investment strategist, esti- it. Their mood is gloomy. phia, for instance, the number of reporters mates that even newspapers such as the covering the metropolitan area is down to New York Times, which are widely read Hard pressed 220, half the 1980 gure. online, get only 5-10% of their revenues Among our newspapers as they now Trends in advertising and particularly from the web. stand, little more can be said in their favour classi eds, an inherently user-generated The second irony a common one for than that they do not require batteries to medium are even bleaker. Whenever sunset industries is that decline, nan- operate, you can swat ies with them, and Craigslist.org, a do-it-yourself online bulle- cially speaking, is very pleasant. Printing they can still be used to wrap sh. Thus Jo- tin board, enters a new city, local papers presses, the main capital outlay for news- seph Epstein, a serial author, writing in the hear that proverbial sucking sound. EBay, papers, last for decades and are depreciat- monthly magazine Commentary. Another the world’s biggest auction site (which also ing peacefully with little need for new author, Philip Meyer, makes his point in owns a stake in Craigslist), already works cash. As newspapers get rid of the more1 The Economist April 22nd 2006 A survey of new media 7
2 atavistic elements in their print editions down after a spate of vandalism. ready part of a great many conversations. such as the pages of (inherently out-of- The worst conclusion that newspaper By the same logic, news sites should date) share prices they also save on ink owners could draw from such setbacks is avoid the still surprisingly common in- and paper. Thus, despite all the frightening that interactivity does not work and ternet sin called link-rot . This refers to circulation numbers, Goldman Sachs, an should be avoided. It’s like saying, ‘I hear websites that publish an article under one investment bank, estimates that the aver- there are assholes in New York, so I’m not web address (or URL, for uniform re- age pro t margin for America’s 12 biggest going there’; yes, there are assholes, but source locator ), but then change the URL newspaper publishers in 2004 was 21%, you should still go there because we can when archiving the article. If you break more than double the average of the For- gure out who the assholes are, says Je your links, you break your inventory, tune 500 companies. Some people are still Jarvis, a former journalist and newspaper says Jerry Michalski, the media consultant, making money, in other words, and are consultant who blogs at Buzzmach- and nobody links to rotting links. willing to invest. Last month McClatchy, a ine.com. He suggests joining the online Free access and permanent links are big American publisher, bought Knight conversation in ways that are appropri- two speci c examples of a new story-cen- Ridder, the country’s second-biggest stable ately circumspect. tric approach that Jupiter Research, an in- of newspapers, for $4.5 billion. The rst step, says Mr Jarvis, is to tear ternet consultancy, advises newspaper down any walls around the website. Now- companies to adopt for their web editions. Old media ght back adays it’s not content until it’s linked, he Instead of assuming that readers will start But increasingly, newspaper barons, not says, and bloggers will not link to articles on the front page, editors should expect content to preside over slow decline, want that require logins and subscriptions to be them to enter at any point, probably hav- to embrace the revolution. One of them is viewed. This has immediately obvious ef- ing started out from Google’s search page Rupert Murdoch, chairman of News Cor- fects (see chart 2). The sites that bloggers or a blog or an e-mail from a friend with a poration, one of the largest newspaper link to most are the online New York Times, link. This makes a big di erence. It means publishers in the English-speaking world. CNN, the Washington Post, Yahoo! News, that every single page needs navigation Last year he told the American Society of USA Today and the BBC. These are free or aids to help readers along in their journey. Newspaper Editors that as an industry, mostly free sites and thus, in e ect, part of For publishers, says Jupiter, it requires de- many of us have been remarkably, unac- the conversation, because they are al- constructing their websites treating countably, complacent . Young readers, individual stories (and not the website) as Mr Murdoch said, don’t want to rely on a their most important product. god-like gure from above to tell them Let’s talk 2 The next step is to allow indeed, en- what’s important. And to carry the religion Links from blogs to sites listed, Jan 2006, ‘000 courage reader participation on individ- analogy a bit further, they certainly don’t Mainstream media Blogs ual pages. This could start with a simple want news presented as gospel. So what star-rating system of each article. Deeper do newspapers need to do online to ad- 0 102030405060 engagement would include comment just? Their websites, Mr Murdoch said, New York Times panes at the bottom of stories (like those have to become the place for conversa- CNN below blog posts), or blog discussions be- tion. The digital native doesn’t send a letter Washington Post tween the journalists and invited guests. to the editor any more. She goes online Yahoo! News As with some group blogs today, contribu- USA Today and starts a blog. We need to be the des- BBC tors could be required to log in, either un- tination for those bloggers. Soon after this SF Gate der their real name or a pseudonym. This speech, Mr Murdoch bought MySpace, an Guardian Unlimited leaves reputation trails and discourages online blogging and social-networking Los Angeles Times vandalism. Just as more blogs will look site wildly popular with young people. Yomiuri Online like newspapers, more newspapers will Rhetorically, Mr Murdoch hit all the Wired have blog-like aspects, says Paul Sa o at right notes. Implementing this soaring vi- Boing Boing the Institute for the Future. sion, however, is di cult in practice. Ex- boston.com Admittedly, this kind of advice can Times Online actly how does an august publication turn Forbes sound like woolly new-age claptrap to itself into a place for conversation , espe- Time newspaper publishers. They want to cially given that all sorts of lively conversa- Fox News know whether there will still be a long- tions are already in progress in the blog- Business Week term business model for things like investi- osphere? Last year, the Los Angeles Times Engadget gative reporting and fact-checking. Ironi- gave it a go. Michael Kinsley, its opinions- PBS cally, they are nding support among their page editor at the time (as well as a former NPR internet rivals, who tend to be idealists. co-host of CNN’s Cross re show and a MTV Craig Newmark, of Craigslist, says that CBS news founder of Slate, an online magazine) PostSecret journalism needs to become a commu- turned his page into a wikitorial in CNN Money.com nity service rather than a pro t centre, which readers could edit articles (more on Telegraph and is working on making this happen. As wikis in the next article). This did not work CBC.ca The State of the News Media puts it, the at all. Vandals converged on the wiki and Sydney Morning Herald worry is not the wondrous addition of citi- wrecked it, until the newspaper shut it Mercury News zen media, but the decline of full-time, pro- down and parted with Mr Kinsley. The The White House fessional monitoring of powerful institu- Washington Post, too, experimented with a Daily Kos tions. That, after all, is what a free press in blog open to outsiders, and also shut it Source: Technorati democracies is supposed to be for. 7 8 A survey of new media The Economist April 22nd 2006
The wiki principle
Are many minds better than a few?
HEN people express scepticism happens to be anybody at all. The word Wabout participatory media, they usu- wiki comes from the Hawaiian word for ally have people like Brian Chase in mind. quick , but also stands for what I know Mr Chase is a 38-year-old from Nashville, is . Wikis are thus the purest form of par- Tennessee, who until recently worked in ticipatory creativity and intellectual shar- the middle-management layers of a cou- ing, and represent a socialisation of ex- rier rm called Rush Delivery and seemed pertise , as David Weinberger, who is destined to remain entirely unremarkable. currently writing a book on collaborative For reasons known only to himself, how- intelligence, puts it. ever, Mr Chase last May decided to play a Among the new media, wikis are the joke, a joke that went horribly, horribly perfect complement to blogs. Whereas wrong , as he would later tell his local blogs contain the unedited, opinionated newspaper, the Tennessean. voice of one person, wikis explicitly and His joke consisted of a hoax entry on literally allow groups of people to get on Wikipedia.org, a free online encyclopedia the proverbial same page . This is the that anybody anybody at all can edit, main reason for the failure of a Los Angeles simply by clicking on a button that says Times experiment with wikitorials, de- edit this page . Mr Chase posted a bio- scribed in the previous article. Wikis are graphical article on John Seigenthaler, a good at summarising debates, but they are distinguished journalist (and former edi- ill-suited for biased opinion. tor of the Tennessean) who in 1961 did a Wikipedia’s numbers actually make it stint as assistant to Robert Kennedy, Amer- an anomaly among wikis. Joe Kraus, the ica’s attorney-general at the time. Mr co-founder of JotSpot, a provider of wiki Chase, however, fabricated an entirely dif- software, reckons that most of the millions ferent life for Mr Seigenthaler, one that had of wikis already in existence are designed him living in the Soviet Union, founding a For the most part, it is much more for small, well-de ned groups of people. public-relations rm and, most perni- worthwhile to dwell on the phenomenal Team members in a company, for instance, ciously, suggested that he was implicated opportunities than on the poison pens. might use wikis to collaborate on presenta- in the assassinations of both John and Wikipedia’s promise is nothing less than tions or project calendars. Wikis are com- Robert Kennedy. the liberation of human knowledge both munities, and communities require Normally, such vandalism is corrected by incorporating all of it through the trust, says Mr Kraus. Trust comes most within minutes on Wikipedia because collaborative process, and by freely shar- easily when the people involved know other people see it, remove it and improve ing it with everybody who has access to one another or are accountable for their the entry with their own genuine insight the internet. This is a radically popular contributions. Given that the optimal that, in a nutshell, is the philosophy and idea. Wikipedia’s English-language ver- group size for humans may be less than power of collaborative intelligence. This sion doubled in size last year and now has 150 members (see the article on blogging particular item, however, fell through the over 1m articles. By this measure, it is al- earlier in this survey), most wikis might be cracks. For 132 days, the libellous lies went most 12 times larger than the print version expected to be small. unnoticed and remained on the site. Even- of the Encyclopaedia Britannica. Taking in tually, some volunteer sleuths traced the the other 200-odd languages in which it is Darwin or intelligent design? vandalism to Mr Chase, who nally came published, Wikipedia has more than 3m At rst sight, Wikipedia seems too large for clean last December and apologised pro- articles. Over 100,000 people all over the its contributors to be able to trust each fusely to an impressively gracious Mr Sei- world have contributed, with a total of al- other easily. How, then, does it work? A genthaler. With that, the episode became a most 4m edits between them. Wikipedia common assumption, expressed most cut- scholarly footnote in media history. already has more visitors than the on- tingly by Robert McHenry, a former editor- A telling one, however. Re ecting on line New York Times, CNN and other main- in-chief of the Encyclopaedia Britannica, is the incident in USA Today, Mr Seigenthaler stream sites. It has become a vital research that Wikipedians trust in some unspeci- succinctly summarised the promise and tool for huge numbers of people. And Wi- ed quasi-Darwinian process, whereby peril of the latest media revolution: And kipedia is only ve years old. accuracy evolves as more and more so we live in a universe of new media with This success has made Wikipedia the eyeballs examine an item. Does some- phenomenal opportunities for worldwide most famous example of a wider wiki phe- one actually believe this? , wonders Mr communications and research but popu- nomenon. Wikis are web pages that allow McHenry. He obviously does not. To him, lated by volunteer vandals with poison- anybody who is allowed to log into them Wikipedia is a faith-based encyclopedia , pen intellects. to change them. In Wikipedia’s case, that based on the moist and modish notion of1 The Economist April 22nd 2006 A survey of new media 9
wrong. Last month Nature issued a rebut- The rise of the amateur 3 tal. But if it did get it wrong, it is not clear Wikipedia database size, gigabytes why it would have erred more for Britan- nica than for Wikipedia. Mr Hoiberg puts a 8 By language, December 2005* * brave face on it, claiming that our model, 7 % of total although not perfect, is the best. 6 For a lot of new-media watchers, the Other 24.5 English 33.3 5 most interesting thing about the episode Total: Spanish 2.9 was something entirely di erent: that Bri- 7.5GB Dutch 3.2 4 tannica, somewhat representative of old Polish 3.9 German 13.3 3 media in general, instinctively regards Wi- Italian 3.9 2 kipedia as a threat, whereas Wikipedians Japanese 7.5 French 7.5 are not the least bit tempted to reciprocate. 1 I’m a big fan of Britannica’s work, says 0 Mr Wales, adding that he is not motivated 2001 02 03 04 05 by disrupting anybody, and is glad that Source: Wikipedia *Estimate Brockhaus, the biggest encyclopedia in Germany (where Wikipedia is very popu- 2 community and some vague notions phy, when quick intervention is needed. lar), appears to be doing better than ever. about information wanting to be free . To put this process to the test, the jour- But why not have a free alternative as In fact, it turns out that such quasi-Dar- nal Nature recently commissioned a study well? And why not test the limits of what winian logic is not the way we talk about to compare the accuracy of a sample of ar- social collaboration can do? Mr Wales is ourselves within the community , says ticles drawn from Wikipedia and the Ency- the rst to admit that there are some in- Jimmy Wales, who started the (not-for-pro- clopaedia Britannica respectively. Na- herent limitations, and says they are busy t) Wikimedia Foundation that operates ture’s experts found 162 errors in Wiki- trying to discover what they are. Wikipedia, as well as lesser-known sites pedia’s articles and 123 errors in Contrast that with the joyful reaction of such as Wiktionary, Wikinews and Wiki- Britannica’s. Jorge Cauz, Britannica’s presi- Wikipedia’s detractors to Brian Chase, the books. Instead, says Mr Wales, the process dent, immediately claimed victory be- dodgy biographer (whose article was liter- is much more traditional than people re- cause Wikipedia had a third more errors . ally one in a million). Somebody who alise . Fewer than 1% of all users do half reads Wikipedia is rather in the position the total edits. They add up to a few hun- We are all fallible of a visitor to a public restroom, says Mr dred committed volunteers like himself, Privately, however, Britannica’s editors McHenry, Britannica’s former editor. It says Mr Wales a real community of peo- were shocked to have to concede that their may be obviously dirty, so that he knows ple who know each other and value their creation contained any errors at all. Total to exercise great care, or it may seem fairly reputations. Besides democracy on the accuracy, after all, is the main selling point clean, so that he may be lulled into a false site, he says, there is occasional aristoc- for the old media. So Dale Hoiberg, Britan- sense of security. What he certainly does racy (when editors with superior reputa- nica’s current editor-in-chief, commis- not know is who has used the facilities be- tions get more say than others) and even sioned his own review of the study and fore him. One wonders whether people occasional monarchy ( that’s my role ) found that Nature did everything wrong like Mr McHenry would prefer there to be in cases such as the Seigenthaler biogra- that they could possibly have done no public lavatories at all. 7 Heard on the street
Podcasting will change radio, not kill it
LOG and wiki were already dictionary means sending a radio signal to an entire ten to it and, more importantly, subscribe B words in 2004 when Adam Curry, a population in a particular geographic area to a feed from the same podcaster, so former show host on MTV, used his own at a particular time. Confusingly, in some that all new audio les from that source are celebrity and the underlying technologies respects that is the opposite of podcasting. automatically pulled down as soon as of blogging to popularise yet another next But none of this matters any more. As with they are published. Whenever listeners big thing: podcasting (which provided blogs and wikis, people are discovering dock their iPods or other music players for him with a new nickname, podfather ). podcasting as something genuinely new. charging, the feeds that have newly ar- The word itself is hip but not helpful. It works as follows. A podcaster records rived on the computers are transferred to The pod comes from Apple’s iPod, a fash- something anything from music to philo- the portable devices. People can then lis- ionable portable music player a stroke of sophical ramblings, professional news or ten in their car, while jogging, or wherever marketing luck for Apple, which initially snorting noises into a computer with the and whenever they please. had nothing to do with podcasting. The aid of a microphone, then posts this audio It is not quite true, therefore, that pod- casting comes from broadcasting, which le onto the internet. There, people can lis- casting is to audio as blogging is to text.1 10 A survey of new media The Economist April 22nd 2006
2 Podcasting is about time-shifting (listen- as yet so new that several words ( vodcast- For creative types, professional or ama- ing o ine to something at a time of one’s ing , vidcasting , vlogging ) are still vy- teur, the appeal of podcasting is much the own choosing, as opposed to a broad- ing for the honour. same as that of other participatory media: caster’s), whereas reading blogs requires a For listeners, the appeal is threefold. it dramatically lowers the costs of produc- live internet connection and a screen. First, they become their own program- ing content. All they need is a microphone, More subtly, podcasts are di erent from mers, mixing the music and talk feeds that a computer and an internet connection, blogs and wikis in that they cannot link di- they enjoy. This liberates commuters, say, and most people already have those. rectly to other podcasts. This makes pod- from commercial radio stations that, in casting a less social, and probably less America especially, seem only ever to get Hammed radio revolutionary, medium. dumber and duller. Second, podcasts lib- Does podcasting therefore spell the end of Nonetheless, its rise has been nothing erate listeners from advertising, and thus radio? I don’t really buy into that per se; short of astonishing. Mr Curry’s own pod- put an end to the tedious and dangerous what we’re really seeing is a big mash-up cast, The Daily Source Code, has several toggling between the car radio’s pre-set of stu , says Mr Curry, the podfather. million listeners. Apple’s iTunes, the soft- buttons at 100km an hour. (However, Podcasting, terrestrial radio and another ware application and online music store some podcasters are experimenting with newcomer, paid-for (ie, mostly advertis- that makes iPods work, currently lists putting advertisements into their pod- ing-free) satellite radio, are all carving out 20,000 free podcasts and is adding them at casts.) Above all, the time-shifting that their niches in people’s crowded media a fast clip, all before podcasting’s second podcasts make possible liberates people lives. The limiting factor of podcasting, birthday. Podcasting is even expanding from having to sit in their parked cars to says Mr Curry, is that it is inherently asyn- from audio to video, although this trend is hear the end of a good programme. chronous (ie, not live). If they nd1
A fantasy world where people Wonders of the metaverse make their own lms
ET’S build a really cool swing and see den dollars , convertible into hard dollars appears imminent. Second Life reduces Lif we can get somebody to sit on it, on Linden’s currency exchange, which the cost of lming a movie to zero. says Philip Rosedale. A few clicks later, has a monthly trading volume of $4m. Second Life opened in 2003 and is there is the swing, and quite an artful one. One user, Anshe Chung, pays Linden Lab now inhabited by about 100,000 people Onlookers have gathered to watch. One, the equivalent of about $200,000 a year from around the world (still a small num- named mermaid , declines to sit on the to buy land in Second Life. Ms Chung ber compared with the video-game gi- swing, but another, called ninja , hops turns a pro t by developing this land into ants). Unlike earlier generations of video on and rides for a bit. Then a dragon residential communities (such as Hang- games, which appealed mainly to narrow comes along that is so beautifully crafted zhou , Gotland , Emerald Island and demographic groups, Second Life is pop- that everybody stares. so on) and charging avatars rent. It’s the ular with women as well as with men, Technically, all this is happening not purest way of pro ting from creativity, and with middle-aged people as well as in real life but in Second Life, a meta- says Mr Rosedale. teenagers. If there is a trend, Mr Rosedale verse (for metaphysical universe ) A lot of the things created in Second says, it is perhaps that Second Life does created by Linden Lab, a San Francisco in- Life are exported into real life, as fashion, best in places with bad weather, fast ternet company. Mr Rosedale, its founder, songs and so on. One user, Natha Keir broadband connections and unexciting says that Second Life is not a video game (whose avatar is called Kermitt Quirk) entertainment options. He considers Brit- but a place where people make things. created an online multiplayer game ish suburbs an excellent growth market. This is hard to imagine until one sees it, called Tringo, which is a bit like bingo but In time, metaverses could disrupt the but then instantly addictive. People who more fun. Tringo started as a game within economics of mainstream lm-making. log on to Second Life create an avatar the game but has now taken on a life of its Philip Evans at Boston Consulting Group (ie, an online extension of themselves). own outside Second Life. estimates that Linden Lab has so far in- As avatars, they mingle, go to parties, Other avatars have created cameras vested about $25m into the Second Life create what they wear and drive in, build and are lming things that happen in Sec- environment. But as about 90% of the the houses where they live, paint pictures ond Life. In e ect, some avatars become content is created by the players , calcu- and compose music. actors for other avatars who become di- lates Mr Evans, this works out at a total Second Life is not as separate from real rectors. These new directors then post investment of perhaps $250m, which life as one might expect. Larry Lessig, a their lms to websites in real life ( real brings Second Life up to the budgets of real-world author, recently gave a book having become a slippery concept by Hollywood blockbusters. The produc- talk in Second Life, and lots of avatars now). You can be the next Coppola tion values are amazing, says Mr Evans. showed up. People own copyright in real here, says Mr Rosedale, as he watches This potential economic disruption to life for the things they create in Second one such lm, in which a cowboy is just Hollywood, he thinks, could be the har- Life. Avatars trade their creations in Lin- sauntering into a saloon and gun-slinging binger of something very much bigger. The Economist April 22nd 2006 A survey of new media 11
2 Osama bin Laden, don’t go running to easiest things to share with friends online, your iPod, he adds. Breaking news, call-in so this is what Yahoo! concentrates on do- shows (an old-fashioned form of partici- ing. It lets people listen to music (for a patory media) and other live program- small monthly subscription or pay-by- ming will still work on terrestrial radio. download) and then rate the song. Yahoo! This might lull radio bosses into a false then uses its knowledge of the online com- sense of security, however. I’m not sure munities formed by its users to recom- that the average consumer is going to want mend the right kinds of songs by connect- to hear, you know, Joe podcasting out of ing you with other people who like the his garage, says Mark Mays, the chief exec- same music , says Mr Goldberger. utive of Clear Channel Communications, The e ects on radio, while not lethal, America’s largest radio broadcaster with will therefore be large. Radio broadcasters 1,200 commercial stations. Mr Mays understand that they need to make com- claims that when people buy an iPod they mercial radio less disagreeable to listen to, will reduce their radio listening for a few which above all means shorter advertising months, but then increase it again to edu- interruptions. This is why Clear Channel cate themselves about new music. And has introduced a campaign called less is where else to go for music than their local more , in which it sells fewer minutes to radio station? asks Mr Mays. advertisers in the hope that this will drive If they are young, they will go any- up ratings and prices. where but to their local radio station, says Historically, radio has been good at David Goldberger, the music boss at Ya- adapting. When Franklin Roosevelt gave hoo! The odds that you and I like the same his reside chats , radios were in the liv- ve songs in a row are very low, he says. ing room and families gathered round If you hate Metallica, you’re not going to them during prime time. Then television sit through three minutes hoping that the came along, and radios migrated to the car fourth minute gets better. To young peo- for use during rush hours. Podcasting may ple today, song sequences are simply herald yet another migration, to a place playlists , which happen to be among the and context yet to be determined. 7 The gazillion-dollar question
So what is a media company?
OR his rst few decades in the media in- who has a New York accent and the kind of news, blogs, e-mail, chat groups, photo Fdustry at CBS, then Walt Disney, then humour that goes with it, occasionally and music sites and so on whether as Warner Brothers, where he was chairman wonders whether she is tra cking . Be- their nal destination or as stops on a jour- and co-chief executive Terry Semel felt tween them, they have helped him to ney, Yahoo! can put more and better ad- pretty clear about what media companies work a few things out. vertising in front of them. were. He was running them, after all. The internet is a much larger change Change number two, says Mr Semel, is Then, in 2001, he left Hollywood and went than the coming of television in the 20th that unlike in television, say you don’t to Silicon Valley as the new boss of Yahoo!, century, says Mr Semel. In the past, some- need hits . Many small audiences are as the world’s largest internet portal (gate- one decided that the news goes on at 11 good for advertisers as few large audi- way). A self-avowed technophobe who o’clock at night; people like my wife never ences, and indeed may be better. This has barely knew how to use e-mail, Mr Semel even saw the news, because she never huge implications for content, turning it suddenly found himself in meetings with stayed up that late. We all grew up when into one long continuum from profes- a bunch of 23-year-olds . He already had somebody else was the programmer; now sional to amateur, from blockbuster to the ambition to turn Yahoo! into the arche- the user is the programmer. That is subculture niche. Chris Anderson of Wired typal 21st-century media company , but change number one. To Mr Semel it means magazine calls this stretched statistical dis- suddenly he was no longer so clear on that Yahoo! must do more than provide tribution the long tail . In his forthcoming what that meant. technology. We decided to open Yahoo! book of the same title, Mr Anderson ar- Mr Semel has spent the past ve years up, so that anybody using [their personal- gues that old-media economics, which are educating himself, counselled by trusted ised start page] MyYahoo! can instantly go biased toward the hits at the head of this advisers such as his daughters, aged 24, 19 wherever they want to go, even if that distribution, are being replaced by new- and 13. The rst does a lot on the internet, leads to the web pages of rivals. That credi- media economics, which allow creation the second does everything on the in- bility, he thinks, will keep users coming and consumption along the entirety of a ternet, and the third lives online and has back for a deeper engagement . As peo- much longer content tail. so many beeping devices that Mr Semel, ple spend more time on Yahoo!’s pages Yahoo!, says Mr Semel, will therefore1 12 A survey of new media The Economist April 22nd 2006
2 be happy to mix professional content and content, whereas old-media rms tend to The analogy to marketplaces has an- user-generated content, no matter how get stuck trying to generate hits. other important implication: network ef- small its potential audience, on its pages. Exchanges become necessary because fects. The value of networks (such as the The general direction, however, is towards people need help navigating around this telephone or postal systems) and ex- ever more user-generated stu . In March, huge continuum of content. In the present changes (such as eBay or the New York Yahoo! said that it would limit its own pro- century, says Paul Sa o of the Institute for Stock Exchange) increases dramatically as duction of content. the Future, you get large by allowing the the number of participants rises. Once Where does all this lead? It will look many and small to gather on your lawn. achieved, network e ects also become more and more like a stock exchange, says This is the media equivalent of what eBay, barriers to entry by rivals. If they are look- Mr Semel. An exchange, that is, for users a Silicon Valley neighbour to Google and ing for an exchange, for instance, both buy- who o er (create) and bid for (search, Yahoo!, has done for the trading of second- ers and sellers will gravitate towards the navigate, share, enjoy) content. And a hand goods among individuals. It is what market with the greatest liquidity in a stock exchange for advertisers, who bid Wikipedia has achieved as an encyclope- given share or bond. against one another to have their spon- dia. It is also very similar to what, say, the This is why a lot of new-media compa- sored links placed in front of these users. New York Stock Exchange does. nies are now hurrying to create market- Vinod Baya and John du Pre Gauntt at places with network e ects before some- Open outcry PricewaterhouseCoopers, a consultancy, body else does. YouTube, a start-up To most old-media executives, the con- argue exactly this in a report called The launched about a year ago, lets people versation turns ba ing at this point. They Rise of Lifestyle Media . Successful media upload and share their own videos. It al- nd it much more reassuring to insist that, companies, they write, will become mar- ready transfers more data each day than in one sense, media companies will proba- ketplaces that let consumers search, re- the equivalent of an entire Blockbuster bly never change. They are still, at heart, search, share and con gure their media ex- video-rental outlet. It goes without saying audience aggregators that make money by periences. To be good, these exchanges that Time Warner’s AOL, Google, Yahoo!, selling advertising to third parties who need to combine a personalised media Amazon and other internet companies are want to reach those audiences, or by charg- experience with a social context for par- also working to exploit network e ects. ing the audiences directly through sub- ticipation. Instead of exclusive owner- This race to become the most liquid me- scriptions, or a bit of both. ship of content or distribution assets (the dia marketplace has just started, and the Upon closer examination, this is not so stu of old media), the media market- winners are not yet obvious. But the gi- reassuring. Using this de nition, the me- places will compete in their knowledge of ants, Yahoo! and Google, do have a head dia industry now includes strange new- consumer activity , which they will use start. They already have network e ects in comers. Google, for instance, happens to both to interact more intimately with con- their advertising, and emerging network be a media company run by technology sumers and to match them better to ad- e ects in some types of media (text-based people , says Larry Page, its co-founder, vertising that is unobtrusive and helpful blogging, say) that can be transferred to because virtually all of Google’s revenues (itself a novelty), and thus lucrative. other types (such as video). That is be-1 come from advertising. In fact, Google is the most valuable media company in the world, with a market capitalisation about half as large again as that of Time Warner, the largest traditional media company. This is remarkable because Google, an in- ternet search engine with lots of other free internet services, explicitly does not pro- duce that which media companies have traditionally manufactured: content. We’re engaged in a semantic exercise, says Je Bewkes, the number two at Time Warner. Is Google a media company? It’s a weird discussion, what is a media com- pany. Ultimately, he thinks, everyone is going to the same media place but they’re coming through di erent doors to get there. This still begs the question: What does that place look like? And do all the doors provide equally good access? The history of the world would sug- gest that the newer companies that were designed for the medium will prevail, and will then combine, says Jonathan Miller, the boss of AOL, a rival to Yahoo!, partner in search technology to Google and itself part of Time Warner. That is because the newcomers are at ease in the long tail of The Economist April 22nd 2006 A survey of new media 13
2 cause the distinctions between di erent its tradition of open-outcry oor traders) has a price. If it is charged for, the creators types of digital les are becoming increas- and the NASDAQ (where trading has al- get 70% of the purchase or rental money ingly unimportant (assuming a good ways been done by computers). In news, and Google keeps the rest. broadband connection). To savvy teen- for instance, Google displays stories se- Where does all this leave old-media agers, it’s all just stu passed around lected by computer algorithms, whereas companies? For a number of years, they among friends. Yahoo! uses human editors to select the might continue to do well without chang- line-up. Caterina Fake at Yahoo! (and the ing, because many innovations (like Gu- A tale of two markets co-founder of Flickr) says that Google’s tenberg’s movable type) take decades to As it happens, Yahoo! and Google have people solve problems by brute-force become mainstream. A few of these com- very di erent visions about what a media computation , whereas Yahoo!’s ap- panies stand a decent chance of turning exchange should look like. This might be proach is about people, behaviours, so- themselves into a genre-speci c brand surprising, because on the surface the two ciology . Speaking for Google, Tim Arm- (such as family content for Walt Disney). companies are very similar. Their head- strong, its advertising boss in North Others, such as Viacom, which recently quarters are in adjoining and equally drab America, counters that Yahoo!’s talk about split its distribution and content into sepa- suburbs; each was founded by two friends creating a community has some of that rate companies, are preparing for a future at Stanford University; and both have as- old-media tone about it; is the future for as content producers at a speci c point in sembled audiences of users the likes of corporate-created communities or user- the tail . Yet others, such as News Cor- which the world has never seen, says Mi- created communities? Google has a high poration and Time Warner, are staying ver- chael Moritz at Sequoia Capital, the lucky trust level in users. tically integrated for now, and trying to venture capitalist who early on invested in It is a religious war, in short, but one combine old-media empires with new- both of them. where worshippers for once get the bene- media marketplaces (MySpace and AOL, But Jerry Yang and David Filo, Yahoo!’s t. Yahoo! is working on the social folks- respectively). But this is risky, since in an founders, started their company as a onomies described earlier in this survey. attempt to protect the one you could screw hobby, says Mr Moritz. It was always Google is working on solving problems up the other, as Mr Evans at Boston Con- meant to be a media company, and a such as providing (without charge) the sulting Group puts it. rather relaxed, human one at that. Larry enormous online storage required for all For old-media moguls who have be- Page and Sergey Brin, by contrast, have al- this uploading of media les. It is also come new-media moguls, such as Ya- ways been intellectually obsessed with working on the economics to ensure that hoo!’s Mr Semel, all of this is tremendous their mathematical algorithms, says Mr not only Google but its users too get some fun to watch. Until recently they were just Moritz. This shows. Today, Yahoo! does in- of the nancial bene ts of their creativity. being protective, keeping their arms teresting research into the sociological as- Google Video, for instance, is a service (or around their copyright, says Mr Semel pects of the internet, whereas Google hires rather, the rough draft of one) in which about the old industry that he left behind. the world’s top computer geeks. Google lets anybody upload video. The The faster they start to pay attention to This is not unlike, say, the rivalry be- main innovation is that the creators can making stu for people like Yahoo!, the tween the New York Stock Exchange (with determine whether their video is free or better for them. They’ve been warned. 7 What sort of revolution?
Both good and bad but it’s too early to say in what proportions
S A rule, some people, such as Jacobins, launched by Gutenberg in 1448. This in- own language, liberating them from Latin- Atend to be more enthusiastic about vites comparisons. There are Jacobins and ate clergies that had kept them in supersti- revolutions than others, such as mon- monarchs to be found in both revolutions. tious serfdom. Further on in the revolu- archs. Another fairly reliable rule is that In the rst, the Jacobins were, by turns, tion, people got news from far- ung revolutions abrupt enough to be associ- printers, publishers, Protestants and writ- corners of the world; one of the things that ated with a single year (1642, 1789, 1848, ers; in today’s revolution, the Jacobins tend impressed Alexis de Tocqueville during his 1917) tend to cause trouble but rarely bring to be those bloggers, vloggers and podcast- travels through America in 1831 was that lasting change. By contrast, revolutions ers that bay for the blood of the odious even frontier families in remote Michigan gradual enough to be associated with a MSM (mainstream media). As to mon- had weekly newspapers delivered to their name (Renaissance, Reformation, Indus- archs, the rst revolution had popes, mon- doorsteps. And the dramatically lower trial Revolution) often do have enduring asteries and the real thing; today’s revolu- cost of disseminating the written word al- e ects. A third rule, or hypothesis, might tion has, well, the MSM. Both revolutions lowed many more people to express them- be that revolutions seem never to be en- are rmly in the category of gradualist, selves creatively. tirely for the better or the worse, but some- name-not-year revolutions. Each of these bene ts also seems to how manage to combine both. That leaves bene ts and evils. Guten- have had a dark side. The availability of re- This survey has argued that society is in berg’s revolution undoubtedly had enor- ligious texts in the vernacular led to literal- the early phases of what appears to be a mous democratising e ects. It enabled en- ist and fundamentalist movements, and media revolution on the scale of that tire populations to read the Bible in their indirectly to religious wars. The surge of1 14 A survey of new media The Economist April 22nd 2006
sift through and discard clutter, thus en- hancing our cognitive abilities, not dumb- ing them down . Linda Stone, a former executive at both Apple Computer and Microsoft and now a consultant, argues that the a iction of continuous partial attention is in fact a hallmark of the era that is now ending, not the one that is starting. For the past two de- cades, Ms Stone thinks, many people have felt overwhelmed and anxious, constantly afraid that they could miss out on social opportunities if they concentrate on any one thing. This is now producing its own backlash, Ms Stone argues, because as people long for protection and meaning- ful connections, quality over quantity , they are discovering the joy of focusing . Many new-media companies under- 2 textual expression produced not only clas- quidity. Liquidity is exactly what partici- stand this, she says. Just as Google calms sics but also pornography and propa- patory media provide. the chaos of the web with a clean white ganda. Printing presses reproduced Mein Some people worry about what the page, other companies are working on the Kampf just as accurately as the Gospels. new media will do not only to democracy ltering technologies that could counter- but also to brains, thoughts, grammar and intuitively, perhaps make the era of par- Hell or heaven? attention spans. These concerns usually ticipatory media more serene than the era Against this backdrop, the big thinkers arise out of encounters with teenagers in of mass media. about today’s media revolution tend to their native habitat ie, in front of screens The honest conclusion, of course, is veer towards extremes of optimism or pes- with several simultaneous instant-mes- that nobody knows whether the era of simism. Often the alignments are surpris- saging threads ( cu2nite bfz4evr see participatory media will, on balance, be ing. For instance, Michael Moritz, the ven- you tonight and best friends forever ), be- good or bad. As with most revolutions, it is ture capitalist who became famous for sides iTunes and a video game running in a question of emphasis. Generally speak- spotting both Yahoo! and Google, has a the background, blogs in the foreground, ing, people who have faith in democracy strongly pessimist streak. He worries and homework in the small window to the welcome participatory media, whereas about ampli cation of the internet soap- bottom right. people who have reservations will be nos- box and imagines what role user-gener- Other people are not worried at all. Ste- talgic for the top-down certainties of the ated media would have played in 1931 in ven Johnson, the author of Everything mass media. Joseph de Maistre, a conser- Munich, how easy it would have been to Bad is Good for You , argues that the very vative who lived through the French Revo- broadcast the message; I think the Nazis things about new-media culture that scare lution, famously said that every country would have got power quicker. older generations actually make younger has the government it deserves. In the Paul Sa o, a futurologist and one of the generations smarter, because participa- coming era, more than ever before, every world’s most enthusiastic technophiles, tory media train kids from an early age to society will get the media it deserves. 7 also looks at the downside. Each of us can create our own personal-media walled garden that surrounds us with comforting, O er to readers Future surveys Reprints of this survey are available at a price of con rming information and utterly shuts £2.50 plus postage and packing. Countries and regions out anything that con icts with our world A minimum order of ve copies is required. Poland May 13th view, he says. This is social dynamite Pakistan July 8th and could lead to the erosion of the intel- Corporate o er lectual commons holding society to- Customisation options on corporate orders of 500 Business, nance and economics and ideas gether We risk huddling into tribes de- or more are available. Please contact us to discuss International banking May 20th ned by shared prejudices. your requirements. Business in India June 3rd Logistics June 17th Now for the optimists: Lee Rainie, the Send all orders to: director of the Pew Internet & American Climate change September 9th The Rights and Syndication Department Life Project, a research foundation, be- The world economy September 16th 26 Red Lion Square Talent October 7th lieves that people will become not less London WC1r 4HQ but more aware of di ering arguments as Tel +44 (0)20 7576 8000 they become heavier internet users, be- Fax +44 (0)20 7576 8492 cause contradictory views are just a hyper- e-mail: [email protected] link away. A survey by Pew appears to con- Previous surveys and a list of forthcoming rm this view. Mr Anderson of The Long surveys can be found online Tail says that opinion is a marketplace, www.economist.com/surveys and marketplaces work when you have li-