The case of micro-payments

Freakonomics tried to summarize the controversy around micro-payments, and my my current co-cubicle Alejandro tried yet another comment.  Both are rather extensive, but I’m unhappy with either take, so I’ll try mine.

News is a hard to define concept, invented when capital-based factories emerged, and first financial markets then unions took opportunity of cheap pulp-based paper.  Whether starlettes’ gaffes or the potitics behind the latest Nobel prize are newsworthy is a constant debate with some of my friends — so let me focus on one assumption that we can all agree on; news making including three steps: gathering, edition and distribution.

The first step was the most affected by digitalisation, be it through spontaneous distributed testomony or thanks to the use of search engine by journalists; experts would be le least affected part of that first step, mostly by lack of OpenAccess.  Many applaud and professional are horrified to see hordes steping on reporters’ toes, but the truth is: Amateurs, Temps, Freelance, Passers-by has always been intensively used by cash-strapped papers.

What those don’t always do too well is editing: cheking quotes, making sure every point of view has a saying, identifying facts from opinion. This is the heart of the problem because, to be consistent, writing has to be done by one individual, but comments allowed distributed inputs. It’s the journalist added value, and has to be sold.  My take would be that a vast majority of journalist are not worth their salt on that level, blogs and comment reveled that and this explains most of the crisis — but a minority do great job, and need to be paid. By setting up a church-like incentive structure, Wikpedia managed to harvest that work for free, from a thousand or so individuals — not enough to have a decent WikiNews. There is no more juju left and we need to find money in the remaining pocket.

The last part is the one at stake in the micropayments debate: distribution.  This one justifies pooling journalists by entire, generalits, reputable papers — but, beyond the fact that most remaining local titles are now in a monopoly position, distributon networks were often shared: the NMPP in France is one extreme, but representative example; why the newsboy’s job was done by teenagers? Because it was so labor-intensive it wouldn’t be worth it otherwise.  The recent ability to print for free on-line doesn’t resolve the problem that ads won’t suffice to pay the two previous steps: a collection agency would neither be new, nor be impratical.

Few (except maybe Dave Winer) ask: Should we save newpapers? I don’t care for institutions that made some believe that being literate and having strong prejudice (a.k.a. “an angle”) made you the beacon of democracy and give you a free pass on slander, idiocy, stalking, irrelevance and trespassing.  But I do appreciate any structure that will encourage readers to look beyond their usual cup of warm political homophily to reinvigorate their narrow views — what a common agency could do.  There is no price for BBC’s recent reporting on Iran: humane, rich, multi-faceted; and there are no words harsh enough against the xenophobic talking-heads that made that report necessary.

I know having an agency is bad competition, and won’t foster new standards, impair generativity. . .  But newspapers are dying (as I said: I don’t care) and serious investiate reporting isn’t too well (that’s bad) and not even Google can resolve it — so, if the solution is a syndicate-controlled iTunes, that’s an acceptable second best over Perez Hilton.

Can this agency be open and shared? Yes: search engines are well identified industrial complex and letting them access to a syndicated news database is fairly feasible; Google has principles and won’t let it? Well, they don’t refer ads do they? And that is going the be the only difference anyway.  Individual commentators, wealthy patrons or news-gathering sites like Digg would have to pay to link to an ad-free version for their readers.  Based on their business model, they could agree to a threshold beyond which they don’t cover their viewers — and those remaining are shown ads.

What ads show next to a war report, anyway?  Blankets for the needy?  We’ll need more integration with e-merchants and social-networks for better targetted offers — once again, this demands control, i.e. an well designed interface, i.e. a powerfull, common agency.  What if one viewer is not identified? Let’s encourage as many people to use an integrated solution for its benefits first, and see who’s left with the current solution.

Van Alstyne argues that “News is not like an iTunes song; it’s perishable.” Well, the majority of iTunes market, hits songs, are as perishable if not more then news — and Apps from the iPhone even more.  And perishable goods is hardly an issue to sell, really.  Arguing for subscribers-only graphics is also quite feasible: better understanding is a great added value, and search engines rarely use it.

More generally I agree paywalls are bad — because they are inconvenient. But you shouldn’t abandon a needed idea because it’s inconvenient: if you can’t change you wheel, would you ride on a flat tire? You have to use proper tools, make the idea convenient and design it well; sell what people are consuming, instead of complaining that uses won’t ice-cream if you don’t provide them spoons: if news is a social contruct, then sell not the right to read it, but the right to clip it, quote it, send it. I will cost me a fortune (I send a lot of clips) but I don’t care: I’m in charge of keeping my social network vivid, aren’t I?  At least, I’m the one that can put a price on that effort. And I’ll be the one who can follow international news for free when I have convinced them to use the service too.

Should we consider a per-unit of a flat-rate? I’m assuming risk-phobia and bundled-goods indicate that the best solution is an intelligent combination, like the London Oyster card: you have credit, and the cheapest solution between a-piece and all-you-can-eat plans is withdraw after you’ve watched it.  I know Oyster is a privacy nightware: once again — don’t confuse a good idea with a terrible design.

Finally, some have argued for badges to put on one’s blog to show one’s support for a free press; not a bad idea — except outside of the UK, people rarely buy lapel-pins for prestige; blogs are tedious to maintain, too.  Offering one’s friends a page where to read what articles you enjoyed, and offering them the right to read the story in full, on a convenient format. . . That is a real social gift.  Of course, you‘d be able to pool those together; but that is only if you have several friends. 🙂

What if companies pay for our news and offer a free take on world view to anyone?  They already do: it’s called advertizing, and it is as bad as it sounds.  I’m simply encouraging to give that ability to anyone.


About Bertil

I'm a PhD student in Digital Economics, and I love viennoiserie. Je suis un doctorant en économie (numérique) et j'aime la viennoiserie.
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