New media expert Chris Anderson gets it. He understands what is happening, the trends, the economic realities, the economic principles, the economic forces of our time, the economic gravity of our era; he gets it.
And read how utterly clueless--the depths of cluelessness the Spiegel interviewer reaches. This level of absolute ignorance is remarkable. How can anyone be so oblivious to what is happening? How can anyone as self-supposedly smart as Spiegel be so obtuse? Precisely for this reason--this very occlusion to reality--of what is really happening--that large media like Spiegel are falling from their perches and falling behind in the race against new media.
You can either ignore principles/realities and harm yourself as a consequence, or, you can learn and understand and demonstrate humility towards principles/ realities and utilize them and benefit from them. Principles do not bend to accommodate us; principles do not bend to our whim or our liking or to popularity or to governmental fiat or to presidential proclamations; we submit to principles; we contour ourselves toward principles. We change and modify and conform and reshape ourselves to fit into principles.
The principles Anderson identifies in the article are the very concepts that Spiegel has the most conflict with. This is a neon-bright indication that Spiegel, which is stuck in the 20th century, is on its way out; out of money, out of attention, out of influence.
The contrast in reality of Anderson's comments and the fiction that Spiegel is clinging to:
1) Reality: Definitions change; Value migrates
What used to be an accurate definition, and what used to be valuable can change into something meaningless, and useless (definitions of words; and actual things like horse carriages). The implication is that the people most closely associated with or tied to or clinging to the non-reality, lose.
Fiction: Using meaningless words like media, news, and journalism--all constructs of the 20th century that were adequate then to explain reality--using those same words and definitions now is adequate to explain reality. We have a different reality now, where "news" can come from sources other than "news" sources; where anyone can be and is a "journalist"; "media"--the plural form of the word "medium" as in middle or broker or intermediary. Who needs the network news media to get news anymore?
2) Reality: Important "news" reaches me after permeating through chosen and trusted filters.
Fiction: "News" can only be obtained at a centrally located and controlled news outlet.
3) Reality: Many individuals (abundance) are more responsive (abundance) to niche issues (abundance) than;
Fiction: A small number of journalists (scarcity) at one centrally located and controlled news broker (scarcity) covering a limited number of popular topics (scarcity) is the best way to create abundance in news.
4) Reality: Sources of "news" other than well-written news stories from established news companies can be valuable as well. What is happening on my street is important and valuable but of no interest to news organizations.
Fiction: Only new sources from well-written stories from established news organizations is valuable.
5) Reality: to compile, analyze, add value to and distributing information is valuable, and for which there are many business models to do so.
Fiction: Newspapers are the only business model to compile, analyze, add value to and distribute information. Web-based model cannot support itself.
6) Reality: Costs are too high offline. "The math of profit is pretty easy, revenues minus cost. You do your best on the revenue side and if you are not making money you lower your costs. The problem is not that there isn't money to be made online, it's just that our costs are too high."
Fiction: Its impossible to make money online
7) Reality: Large amounts of people are making small amounts of money selling news online. Many of the small amounts of offline news sellers are losing money both online and especially offline.
Fiction: Its impossible to make money online and only the few established news outlets will continue to remain solvent despite the new media.
8) Reality: Online ads are built for immediate transactions and not for building brands. Offline ads are a good vehicle for branding purposes.
Fiction: All ads vehicles are the same and the expertise of the offline ads can be directly translated to the online environment.
9) Reality: Attention and reputation are as valuable as monetization.
Fiction: Money is the only valuable commodity.
10) Reality: There is creative destruction.
"There is no law that says that industries have to remain at any given size. Once there were blacksmiths and there were steel workers, but things change. The question is not should journalists have jobs. The question is can people get the information they want, the way they want it? The marketplace will sort this out. If we continue to add value to the Internet we'll find a way to make money. But not everything we do has to make money."
Fiction: There is no creative destruction because the market will arbitrarily be controlled and stop economic progress through legislation, regulation, bureaucratization, lobbyists, tariffs, taxes, special interests, and unions.
11) Reality: Money can be made by giving away things for free and monetizing it in another way.
"The online economy is about the size of the German economy. And it's based on a default price of zero. Most things online are available in a free form. We have never seen an economy this big with a default price of zero. I realized that we needed an economic model to explain how an economy could be based on "free." And we need to understand the psychology of that."
Fiction: Nothing can ever be given away for free no matter what and expect to monetize it in another way.
12) Reality: Free is the default price; free is the gravitational price. The marketplace follows the underlying economics. "You can be free or compete with free. That's the only choice there is."
Fiction: Somehow, someway things will revert back to the way things used to be and "free" will disappear.
13) Reality: Charge for the niche content or the scarcity and give the abundant popular content away for free.
Fiction: Charge for abundant popular content and give away scarce niche content away for free.
