Linux Monday: The Economics of Free

Linux Monday: The Economics of Free

On the net, the default price is zero, and Linux and open source fit well into that ideology. Old media, not so much. Journalism and the music industry are struggling. They face much the same dilemma: when the product is free, how do you make money?

Journalism is adapting from a pay model that's as old as the printing press, and digging in its heels with ridiculous plans like the Associated Press' scheme to charge bloggers $12.50 for a five word excerpt. And the music industry has yet to accept that recordings are no longer the money making product, but have become a promotional item that sells concert tickets and t-shirts. Instead, they prefer to sue their own customers.

The Linux community, 18 years in, is dealing with the economics of free much better than the old media. In part that's because open-source has always been about free.

"In the past, the media was a full-time job," says Wired editor Chris Anderson. "But maybe the media is going to be a part time job. Maybe media won't be a job at all, but will instead be a hobby." And indeed, that's how it started for me, as a just for giggles pastime that got serious and eventually (for a year and a half) turned into a paying gig.

That's sort of how Linux grows and grows: a geek needs a driver for one odd piece or hardware, and learns some marketable skills in the process.

But still, doesn't somebody have to feed the beast with some $$$ at some point?

"Basically it's a sophisticated variation of a loss leader, like giving away razors so you can sell blades," writes R. McDougall at Climbing The Hill:

No matter what you make, someone will always either manage to break it; or find some flaw they would like improvement in -- especially as time and market conditions change. So you sell support and contract upgrades.

But since everyone else can just take a copy and distribute it themselves, won't you have endless competition?

Well yes, but the hard truth is that's probably in your own long-term best interest. There is collective benefit to having competition.

As the creator of the software you have competitive advantage amongst any pretenders; you know it best, and your superior skill will tend to win out in the end. So the only people you are really competing against are other experts.

"Decide what it is you do that provides value to someone with money," McDougall concludes. It seems that if the main product is free, the money is in the niches.

Which is part of why I believe that ultimately it will be political interest groups that finance journalism. Just as software has expanded from the either/or Mac/Windows "choice" to the plethora of Linux distributions, TV has expanded from the Big Three to hundreds of channels.

That means there's no market for namby-pamby neutrality anymore. The indifferent and undecided aren't watching news at all anymore. Walter Cronkite's avuncular that's the way it is has been replaced by the open advocacy of Olbermann and Maddow, Limbaugh and O'Reilley. When they get the facts right, it still functions as journalism. It's still the traditional model of advertiser support, though the ads are more niche-oriented. But perhaps the model will shift to the more overt partisan press we see in other countries.

That model it makes us, the sudience, do some of the work of weighing the competing ideas, just like we Linux users have to do a little of the work on our end. You may not have to compile the whole package, whether that package is a story or a program. But you'll be expected to play at least some active role and be informed about what you're using.

Post-Gutenberg Journalism

The Great Depression Hits Journalism in the Post-Gutenberg Era

The economy may be in a recession, but in journalism it's already a great depression. Just look to the Des Moines Register. Leading names at the paper got whacked: Jane Norman of the DC bureau. Cartoonist Brian Duffy... there are even reports that Yepsen himself has interviewed for a job at the Paul Simon Public Policy Institute at the University of Southern Illinois. Soon the only person left at the register will be the photographer who shoots pics of hot chicks at the downtown Des Moines bars for the Juice section, as the Register contemplates a British-style Page Three Girl format.

One paper has taken the cutbacks even further and isn't even a “paper,” in the dead tree sense, anymore. The Detroit Free Press announced this week that it's abandoning home delivery four days a week, becoming the first major metropolitan newspaper in the U.S. to end daily home delivery.

Under the plan, only the more profitable Thursday, Friday and Sunday papers will be delivered at home. Newsstand copies will be available other days, and the online content will be expanded.

Granted, Detroit's economy is in even worse shape than most places. But this isn't a local issue or a blip in the market. It's the future. Printed newspapers are going the way of slide rules and carbon paper.

"The dynamics of delivering information to audiences has changed forever due to technology," says the Detroit Free Press publisher. "Our economics have become unsustainable." The daily edition format can't compete in the 24 hour news cycle of the 21st century, but the web site can. There are environmental concerns as a bulky physical paper requires gas and vehicles for delivery (300,000 miles of driving a night for the Detroit paper), and recycling once it's done. The last Gutenberg, pre-internet generation is aging and dying. And classified ads, the bulwark of revenue, are moving to free sources like craigslist.

Free. That's a big word. People expect online content to be “free” in every sense of the word. The term we Linux geeks use is “free as in freedom, free as in beer.” The only money-makers on line are 1) service providers, because you have to connect 2) sites that provide physical goods and services, and 3) porn. Here in Iowa, the Gazette's pay to play experiment fizzled, and even the mighty New York Times failed and re-opened their opinion content that was briefly behind a money wall. The only sites that make a go of it on a pay-to-play basis are highly specialized (for example, the Capitol Hill newsletter Roll Call). Publishers have learned the hard way that pay-to-play for content hurts circulation more than it helps revenues.

Circulation revenue was generally a break-even proposition for print papers, covering the labor and materials to print and deliver the printed product. The money-maker was advertising. And that's a problem with the transition to the post-Gutenberg era. Any internet user with even an intermediate level of savvy can run an ad blocker in Firefox. The parallel problem exists in broadcast, as people fast-forward their TiVos past the ads..

So people don't want paper, they want content to be free, and they don't want ads. But at some point you have to feed the beast with some money. I don't have an answer, any more than I have an answer to how to pay musicians in the download torrent era.

You have probably surmised, from the term “free-lance” in my bio and the disappearance of cross-posts on another site, that I'm a recently downsized journalist myself. I started doing this work six years ago just for myself, just for fun, and I've continued the last few weeks. But it's impacted my product. I'm less inclined to take vacation time off the day job, hop in my car, and drive 45 minutes to see a Mike Huckabee that I would be if I were paid.

But like an open-source programmer, I keep doing it for the reason I started doing it: it's fun. And after six years, it's become habit. About three years ago, I looked over my traffic and realized that when I wrote original content about local and state events, my readership shot up. So I started focusing on those things a bit more and I like to think I got pretty good at it. The changes in technology and ideology since I first abandoned journalism as a career in 1992 made it possible for me to indulge my creativity, inform the public, and be my own publisher. And it got me paid for a while.

Just as traditional journalism is abandoning its old models of delivery, it may need to change its mindset as well. The rise of the citizen journalist, combined with the decline of the old-model large metro dailies, may shift the whole paradigm of American journalism and make us more free as in freedom.

The dominant ideology of American journalism is “objectivity,” defined as a sort of neutrality in which to balance your news diet within the story. Republican rally? Gotta shoehorn in the Dems' counter-message person or the protesters. Candidate baldly lies? Can't say so; you have to get someone else to say it. Carry it to the extreme and throw the Holocaust denier on with the Holocaust survivor. (I've just violated Godwin's Law.)

During my public radio career, I covered an abortion clinic picket. The real story was that the clinic rallied a couple hundred defenders, and the protesters were no-shows. The “other side” of the story was that there WAS no other side. Yet I got bashed for being “not objective.” That's one of the reasons I quit the first time around: objectivity made it harder to tell the truth.

The objective paradigm also makes rank and file journalists give up some of their rights as citizens. A friend of mine took a job with a paper and had to sever all ties to a political party, except for voting in a primary. Some organizations don't even allow that, if it requires registration in a party, and some journalists go as far as not voting at all. That's another reason I quit the first time around; the specific incident was David Yepsen chewing me out for a bumper sticker on my car.

Other societies have an openly partisan press, and this model argues that finding balance and objectivity is the job of the consumer. Instead of a mushy but well-balanced casserole, you have the meat, peas and spuds each in their own corner of the plate. If you insist on eating only the dessert, you're not getting a well-balanced diet, but that's your loss.

Broadcasting is already moving away from the objective paradigm, and American consumers are smart enough to get that. If you're watching Fox or listening to Limbaugh, or if you're an Olbermann fan, you know where they're coming from. Sure, bug media is still corporate, but the marketplace seems to be finding news niches, even without the Fairness Doctrine that the right is propping up as a straw man. Just look at Keith Olbermann and Rachel Maddow's ratings.

And, of course, my own Fairness Doctrine is just to do it myself. The costs of competing online are few. All I've ever spent on the Deeth Blog is a little gas money, a couple sessions of pay-to-play wifi, and my domain name. And I really am competing. After I covered Bobby Jindal last month, a Google search of the top news stories found, in this order: 1) CNN 2) the New York Times 3) me.

This isn't to say that a traditional, objective format is all bad. You can bake a delicious pizza with all four food groups. But does every pastry chef also have to be a fry cook?

It's possible for a press to be partisan yet fair, and that's where I see myself. I always read the Republican blogs, and often comment. I need to know what they're up to. And I'm proud of having a lot of Republican readers. My attitude gong into a GOP event, or writing a GOP story, is: “OK. You know what I am. You know where I'm coming from. Now tell me what you're gonna say and I'll tell people.” By wearing my biases on my sleeve, I can pass that along in a different way than an old-fashioned objective journalist can. Having participated in the process lets me understand it better (I've always found that political activists on opposite sides have more in common with each other than they do with people who are disinterested.)

As long as net neutrality is maintained – and that's still a big if – journalism's move from a big metro paper, print model to a citizen journalist model has the potential to make our press freer in both senses of the word.