Content Matters

During my holiday last week, I finally read the Chris Anderson book Free, the Future of a Radical Price. Of course, I've been following the whole Chris Anderson - Malcolm Gladwell debate for some time.

This week, Union Square Ventures' Brad Burnham weighed in with a thoughtful post entitled Chris and Malcolm are Both Wrong, which addresses a number of issues that have bothered me throughout this debate.

First, Brad points out that the examples Malcolm uses to debunk the Free model are much too narrow. I've long argued that using the WSJ and the FT as examples of getting people to pay for news makes no sense as those are two of the only sources where a large percentage of the subscribers get their companies to pay for the newspaper. Despite the latest comments from Rupert Murdoch that he intends to make users pay for online news, I don't think he'll really be able to get consumers to pay for online access to the NY Post or the Sun.

At the same time, he chastises Anderson for suggesting that the basic economic laws of scarcity no longer apply in the digital media world.

Burnham follows the Goldhaber argument that the new scarcity is attention, not information and that the platforms that provide the infrastructure for the attention economy (Facebook, Twitter, Craigslist, etc) have become the dominant players. The challenge, as Brad points out, is to determine the economic model for these social networks "that depend on the contributions of its participants and increases in value as more people use it". He suggests that model might look more like Craigslist than Yahoo, which may be a scary thought for large media, though encouraging for those of us who've lived in startup world.

This thoughtful post should be read by everyone in the digital economy.