In his blog, Prof. Shirky claims that micropayments would not work for newspapers, similar to the iTunes-music model, because
1. You listen to music multiple times, but read newspaper only once, and hence are not likely to pay for it.
- Whether people would pay depends on perceived value and convenience, not solely on repeated use.? What about that prom dress that would be worn only once?? What about the fashion accessory that would lose its luster after once use?? What about that vacation that you’d go to only once?
- Mike Masnick’s blog also debunks Shirky’s claims, stating that Shirky is retrospective about business models … what would work and what wouldn’t. Innovation is constantly swimming against a stream of skepticism.
- Prof. Shirky suffers from a classic fallacy, that my needs are the most representative of the market.? Whereas, the market is a heterogeneous mass of needs and preferences that does not follow a piper.
2. Music companies have choked the market with licensing.
- Is this completely correct from a user standpoint? There are any number of ways one can get non licensed music.? I can borrow a friend’s CD and rip. I may find the same song on a dozen rip (and illegal) sites.
3. There’s a handful of companies that publish music, but any number of news outlets.
- Not true at all. A lot of music is being directly marketed by musicians cutting out Sony, EMI etc. in the bargain.
- Look for the most insightful news, whether it is coming from Baghdad or from the news reporter messing up Enron’s mirage performance … it only came from one source.
4. There’s not enough competition in music digital distribution.
- Here Prof. Shirky contradicts himself by giving examples of Amazon and eMusic. Yes, eMusic doesn’t have distribution contracts with the big 4 music companies. But that is like saying past performance is predictive of future results.
5. Newspapers cannot copyright the news
- However, do the newspapers only carry news?? Aren’t they a rich source of opinion, debate, historical perspective, and other value added content services? Can you get Thomas Friedman’s or Maureen Dowd’s commentary on the radio or cable?
- People would pay not because it is legal, but because it is the right thing to do. People pay for public TV and radio, don’t they? Even though listening to NPR without paying is perfectly legal?
Don’t be fooled by the eMusic examples. The vast majority of popular music is held by 4 organizations that will not license it to eMusic et al. So long as that situation obtains, past performance *is* predictive of the future.
And you’re onto something with the PBS/NPR model, where 10% of the listeners pay, and it supports free access for everyone. This is logic that uses the network for what it does well, and is, in economic terms, the antithesis of the MP model.