Walter Isaacson: You’ve got it all wrong

I saw Walter Isaacson, former managing editor of TIME magazine, on The Daily Show last night. He wrote a cover story for the current issue of TIME called “How to Save Your Newspaper”, in which he illustrates not how print journalism will succeed by overcoming its ails, but how it will fail by the stubborn old-thinking ways of its leadership.

But before I get to all of that, I want to first point out a glaring problem in the article. To quote:

One of history’s ironies is that hypertext — an embedded Web link that refers you to another page or site — had been invented by Ted Nelson in the early 1960s with the goal of enabling micropayments for content. He wanted to make sure that the people who created good stuff got rewarded for it. In his vision, all links on a page would facilitate the accrual of small, automatic payments for whatever content was accessed. Instead, the Web got caught up in the ethos that information wants to be free.

Can anyone cite a source (besides this article) that makes such a claim about Ted Nelson’s motives in creating hypertext? I cannot. To my knowledge, Ted Nelson created hypertext for a host of reasons that were wholly unrelated to the commercial gains of those who might use it.

Getting on to illustrations of old-thinking, Isaacson quotes none other than Bill Gates. Again, from the article:

the Web got caught up in the ethos that information wants to be free. Others smarter than we were had avoided that trap. For example, when Bill Gates noticed in 1976 that hobbyists were freely sharing Altair BASIC, a code he and his colleagues had written, he sent an open letter to members of the Homebrew Computer Club telling them to stop. “One thing you do is prevent good software from being written,” he railed. “Who can afford to do professional work for nothing?”

Clearly, Isaacson is not familiar with the “consumer as producer” model, the open source movement, or the ramifications of either not only on journalism, but on all of technology. These models have greatly disrupted the status quo, empowering the masses, and causing great concern to corporate giants resolved to cling to business models that were born during the Industrial Revolution 150 years ago. We’re in the midst of a technological revolution that is every bit as disruptive as the Industrial Revolution, and it demands fresh thinking about how business will be done. Those who accept and embrace that notion are doing fantastically well (Amazon seems virtually unfazed by the current recession). Sadly, most of those are not newspapers.

Advertising and Perverse Incentives

In part of the article, Isaacson states that when media companies rely solely on advertising for revenue, the result is a company that is now beholden to the advertisers, rather than the readers. He says that the incentives for journalism become “perverse” in such a world. However, in a cocktail of self-pity and hypocrisy, he also says that during the heyday of easy ad revenues, HE LED THE WAY to putting all of TIME’s content on the web, and doing away with online sales of their content! I, for one, can’t believe Jon Stewart let that slide by!

I remember talking to Louis Rossetto, then the editor of Wired, about ways to put our magazines directly online, and we decided that the best strategy was to use the hypertext markup language and transfer protocols that defined the World Wide Web. Wired and TIME made the plunge the same week in 1994, and within a year most other publications had done so as well. We invented things like banner ads that brought in a rising tide of revenue, but the upshot was that we abandoned getting paid for content.

Forgetting that doing this was perhaps wise in terms of the bottom line, it nevertheless paints these companies as those who will gladly become beholden to advertisers if the revenues are there. It’s only when they dry up that things get “perverse”.

When I worked for AddThis.com (a social media sharing widget that allows users to easily share content, and publishers to see statistics about what content is being shared, using what services, in which countries, etc), one of my jobs was to brainstorm about the kinds of things publishers might want to do with the statistical information available to them through our service. There was one idea that I had that I thought might have merit, but that I never have actually seen in the wild.

It seems pretty easy to conceive of a system for classifying content, and then charging different rates for advertising based on:

  1. Which classes of content their ad is displayed with (Tier 1 would cost more than Tier 2 content)
  2. Where on the screen the ad is displayed.

It’s not particularly difficult to conceive of a system that can foretell, to some extent, how content should be classified based on the recent popularity of keywords in the article, or recent spikes in “viral” sharing activity for certain kinds of content. This would give publishers the ability to increase their ad revenues while at the same time giving advertisers some assurance that their ads will be displayed prominently near “front page news”-tier content. I doubt that any generic system like this exists that will work for all publishing systems, but internal technology development should, at this point, be place pretty high on the priority list. Hint: Engineering is not really a cost center. It’s a revenue center. Reclassify your engineers. They can make you money. If they’re not making you money, it’s an issue with mission and management, not engineering.

Micropayments?

Here’s the thing about paying money for content: we don’t want to do it. Even Isaacson admits that he has stopped subscribing to the New York Times, since he can read it for free online. He then daydreams about digital versions of a wallet or EZPass, or digital coins of some sort. Some way for publishers to collect a nickel or dime from you whenever you happen across some content that you value enough to pay for. He also is quick to point out that these types of digital wallets have failed miserably for various reasons.

He has faith that micropayments could work if there were an “iTunes-easy” way to charge for the content. As if the iTunes model works solely because it is easy. iTunes works because it gives you the ability to purchase and consume a product over and over again, and integrate it with just about all of the rest of your digital life. When I launch iTunes, it beams the music to my stereo, and posts whatever I’m listening to to whatever social network I want, so my friends can see what I’m doing.

I should be clear in saying that there’s no reason they couldn’t create an iTunes-like application for newspapers. I don’t really know why there isn’t one already, or why Apple doesn’t just approach the media companies to actually give iTunes the ability to replace the newspaper at the breakfast table. Either way, where’s the beef? Either get to writing some code, or get your people together with Apple’s people, and see what you can do! It seems to have worked with Amazon and the Kindle. Where’s the innovative thinking? Why do companies have to come to you? GO GET YOUR BUSINESS.

I should also be clear in saying that micropayments in the form of some technology that is going to disrupt my browsing experience and force me to pay attention to things like security and privacy, on the spot, while I’m in a cafe or airport connected to a free Wi-fi hotspot teeming with malicious pranksters is not going to work.

Journalism isn’t going to die

What would happen to journalists if the AP and all of the traditional newspaper conglomerates went out of business? Journalists, and journalism, would survive. It’s not that we don’t value the information. In fact, the traffic that is sent parading to those companies’ web sites from the aggregation sites and blogs is proof that we value the content.

That being the case, it would not surprise me if some of the traditional news outfits did collapse, and people with more innovative ideas about how news is produced and delivered to consumers, and funded, sprung up to take their place. Journalists are also not limited to doing print journalism. Television and the internet are hotspots of news content. And just because we’re in an age where consumers become producers doesn’t mean there isn’t room for an actual journalist to strike out on his own and make a living for themselves.

In fact, they’re probably in a good position to do just that. The barriers to entry have never been lower. In order to produce news, you no longer need huge investments in real estate and heavy machinery. All you need, at least to get started, is an internet connection and a whole lot of heart and hard work.

Look at the Huffington Post — they don’t even have a print offering, and yet they appear to be doing well. Why? Because all of the money the NYT spends on real estate, machinery, bureaucratic administrative hierarchies, advertising sales people that have to cover more than one medium, etc., they can put into devoting people to understanding internet social trends and technology, and exploiting them to increase their readership.

In all, what the New World wants in this revolutionary age, is a news organization that leads in the direction its readers are already moving in. Not one that tries to handcuff them to paper for the sake of justifying investments and business models put in place generations before they were even born. It’s not up to us to save “our” newspaper. It’s up to the old, rich white men in suits to save theirs.

  • http://www.a440.org/steve/blog/ Steve

    To your request at the beginning of the article, I just found and read the original 1965 paper “A File Structure for The Complex, The Changing and the Indeterminate”, in which Nelson introduces the term “hypertext”. The article largely pertains to building a file system to augment the work of Vannevar Bush and his proposed 1945 “Memex” project, which already had the concepts of hypertext in place: the notion of linking two objects together for instant retrieval of the second upon referencing the first. Although Nelson applies the concept to include sound and video recordings, there is no mention in his article about monetizing anything. This is hardly exhaustive, but the original introductory paper, at least, didn’t have this aspect to it.

    I personally would love to see “the ideal” micropayment scheme get implemented and take off, where the payments are so small, and the transactions so transparent, that it would just happen and even the most aggressive consumer of whatever (news, music, video, information in general) would be paying somewhere between the cost of a magazine subscription and an internet connection per month. Of course, there are myriad problems to be solved.

    As far as “an iTunes-like application for newspapers”, you mention the Amazon and the Kindle a few sentences later, and I believe this is exactly what they’re doing: you can pay a subscription fee for certain (mostly journalistic, if I’m not mistaken) content to be delivered to your device as it’s published. We are getting close.

    It really does come down to entities (not just newspapers!) being flexible enough (and have enough vision) to let go of decades-old thinking to change their business models.

  • janeatwood

    you pick effectively at some of Isaacson’s points which I I too felt were off. You completely miss his point
    that no matter what revenue system is created, the
    Huffington Post/aggregators should not be getting the
    new york times’ ad revenue. Worst, you do not address
    the main point, who is going to send a reporter to
    Bagdad with the pro’s to support/research/tie in?
    Instead you simply assert that it will happen. No
    matter how badly Isaacson describes the problem or
    pathetic his solutions, the problem remains that an
    inews will not serve those who want to aggregate or
    subscribe or partake of an issue, a back search, or an
    article.

  • http://ecorrado.us Edward M. Corrado

    I’d argue that Ted Nelson didn’t event hypertext. He more came up with a term. While, like with anything, there is a long and twisted path, I’d credit Vannevar Bush and his Memex concept. Yes, Nelson and Andries van Dam did come up with the Hypertext Editing System that IFM funded in the late 1960s but I still believe that Bush’s 1945 essay (based on earlier work) that appeared in the Atlantic Monthly is the basis for hypertext.

    As for the motives of Nelson and van Dam, I don’t know. The quotes from the project report I found on Wikipedia didn’t mention anything about micro-payments, or payments at all. It was more about file management and accessing various parts of a textual based document.

    Clay Shirky had a good response to the micropayment issue on his blog at: http://www.shirky.com/weblog/2009/02/why-small-payments-wont-save-publishers/

  • m0j0

    Steve, sorry to have caused you to waste lots of your day looking into that, but thanks!! ;-P

    @janeatwood – I didn’t address the point of “who is going to send a reporter to baghdad” because it’s not much of a point, and I thought that was well understood to be a buzzphrase put forth by the rich old men in suits as a scare tactic.

    The logic of that question is a bit flawed in that it makes the rather grandiose assumption that, without the current collection of traditional print newspapers, there will be no news, no revenues to be found, and the entire journalism industry will disappear. When you read it that way, I hope it begins to sound ludicrous.

    The TV news outlets will send people to Baghdad, and the innovators and entrepreneurs will (and are) finding ways to generate revenue without a print offering, and *that* is the point: if it doesn’t make money, don’t print. Focus on digital media for your revenue, exploit television, and do everything *but* print. Print has to be the most costly way to communicate any message, and it is currently making probably the least amount of raw profit (if print divisions do, indeed, make a profit these days).

    I assert that it will happen because it seems pretty obvious that it will. Also, I think folks at the NYT already know this, so it confuses me why they bother to print at all at this point. They must be spending at least 10’s of millions of dollars yearly on real estate, printing machinery, paper, ink, labor to run the machines, etc., that could be put to good use furthering technology to reap a greater portion of online revenues. But it would be life-altering for them to do that. So instead, they’ll cling to the cement block that is print media, and they’ll sink to the bottom of the ocean and drown.

    And if they don’t like the aggregators, it’s because they can’t beat them, in which case they should probably join them. All of this falls outside the scope of their business model, and so again, they will resist change, and die off. Business has worked this way pretty much since the beginning of time. Disruptive change occurs, established businesses hang on to old ideas, and die off. So far, the world has failed to come to an end over it.

    Also, we shouldn’t forget that journalism existed before the New York Times, and it will most certainly exist after them. They need to lead, follow, or get out of the way. They still have time to lead, or to follow, and they should seize that chance while they have it.

    Instead of taking as fact the fearful rantings of old men who were titans of their day, start to think long and hard about what they’re saying, the assumptions their making, and the basic incentives that exist in your industry and on the internet. You’ll soon find that, while things are going to change dramatically in journalism over the next 5-10 years, journalism, and reporters in baghdad, will not disappear.

    For example, you talk about back searching articles as something that won’t be available to people. So why don’t the print companies create an archive of their own and charge admission to it? I’ll tell you why: because they spend 10’s of millions of dollars (I’m guessing – it might be 100’s of millions) on things that have nothing to do with how people want to get their news!

    These “problems” are all opportunities. Trouble is, for print media to retool their entire operation takes work and money. On the other side of the fence, someone like me can fire up a web site and start producing revenue within a few weeks for a startup cost that is, even to the common working man, nominal.

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  • http://transcopyright.org Theodor Nelson

    A THOUGHT FOR YOUR PENNIES: MICROPAYMENT AND THE LIBERATION OF CONTENT

    Theodor Holm Nelson, Project Xanadu
    Sausalito, California

    I was recently surprised to see my name and my original micropayment concept discussed by Walter Isaacson in the hallowed columns of TIME, even more surprised to hear him say my name also on the Jon Stewart show. In both these venues, Isaacson brought forward ideas– micropayment and its benefits– that have been waiting a long time.

    His article has earned controversy in many places, including the New York Times. But those who have commented on Isaacson’s work have seen only one side of the picture, imagining micropayment, say, as paying $2 for a subscription or 10¢ for an article on line. As today’s kids would say, THAT’S SO NOT MICRO!

    I’d like to put the Micro back in micropayment, and bring back the rest of the idea.

    First, I must clarify one issue. The way Isaacson phrases it, I thought of hypertext in 1960 just in order to make micropayment possible: “Hypertext — an embedded Web link that refers you to another page or site — had been invented by Ted Nelson in the early 1960s with the goal of enabling micropayments for content.”

    This has it inside-out. I came up with the idea of micropayment to make HYPERTEXT possible. (Note that I coined both these words, hypertext and micropayment.) But the hypertext I envisioned was very different from what we see now. In 1960 there was no such thing as an “embedded Web link”, since there was no Web, and my designs were very different.

    Now, some people say the World Wide Web was my idea, but I make no such claim. My idea was better.

    The World Wide Web, a hypertext system seemingly so radical, is based on and locked to many computer traditions: a document simulates a rectangular piece of paper; a document is entirely represented in one file; a document consists of a long string of characters (and if any characters are quoted from elsewhere, their previous identity is lost); a document’s formatting and links are mangled into the text content (“embedded markup”); a document’s structure is hierarchical; and a document can only have one-way links (since the document is in one file, its links can only point outward).

    All these conventions, I believe, are mistaken. I can only hint here at how deeply they limit us.

    Designing hypertext in 1960, I was bound by no such computer traditions, since they didn’t exist. Return with us now to those thrilling days of yesteryear, and think what might be possible if we begin from scratch, with no World Wide Web to lock us in.

    Whoosh! Here we are back in 1960. Loosen your mind. The computer screens are blank (in fact there are almost no computer screens, except in government hands). And there are no computer traditions. With no computer traditions, documents don’t have to be rectangular (we can imagine computer documents as free-form, even changing, shapes). We can show documents connected side by side for intercomparison, with their connections visible. We can see quotations connected to their origins. And much more.

    A NEW LITERATURE

    These first 1960 musings about on-screen documents led to several big hypotheses:

    1. The computer screen may completely replace paper, and we have to plan for that possibility. We can provide new documents and facilities never before seen (as above). But that’s just the beginning.

    2. We have to design a whole new literature for the screen– transposing and redesigning all the things we do already in the world of paper. We will need mechanisms corresponding to all aspects of paper literature: writing, annotation, publication, presentation, scholarship, archiving, preservation, librarianship. All these must be rethought and remapped to this new world. Some may become simpler, some may not.

    3. Even with so many requirements, this needs to be a simple universe, with few and simple principles. Furthermore, the design must be generalized to apply not just to text, but to audio, video and movies as well.

    4. The copyright laws will not change, and must be recognized in the system design.

    This means ownership and sale of content. There will be rightsholders (authors, publishers) and content purchasers. Somehow royalty payments to each author/publisher must be automatic, to simplify and lubricate transactions. (As a writer and movie-maker, I knew that artists had to be rewarded.)

    5. And who will pay and how? As in all aspects of life, economics will be fundamental; there must be a fluid system of commerce.

    The deep-document system designed from these ideas is still an ongoing project; we won’t get into its various names here.

    The overall design of this system took far longer than I hoped (some two decades, working with several brilliant colleagues). So far it has been politically difficult to implement and upstaged by the World Wide Web. However, people now recognize that many necessary things are impossible on the Web– clean side-by-side intercomparison, side-by-side annotation, two-way links, clean payment for content.

    (I would like to say much more, but this note is about micropayment.)

    PUTTING THE MICRO BACK IN MICROPAYMENT

    While mechanisms of content sale are important, first let us consider the UNIT of content sale.

    Some think, for instance, that the user should buy a subscription to an on-line journal for a year or a month. That is an unacceptably big commitment in today’s noncommittal world.

    Others think content should be sold by the article. But that, too, I would argue, is too much. What if you discover, in the first paragraph, that it’s not what you wanted? And today’s hyperactive users want to skim and jump. They should not be burdened paying for the parts they don’t get to. (Indeed, skimming and skipping have always been important secrets of being well-read.)

    Should the unit of sale be the paragraph? No. Paragraphs come in very different sizes. The sentence? Ditto.

    Should the unit of sale be some fixed number of characters, like a hundred or a thousand? No again. There is no need to fix any arbitrary unit.

    Let me propose a simpler and more sweeping idea. Sell content by the arbitrary piece– charging for whatever length of portion the user sends for. (Fully analyzed, this actually means selling by the character.)

    Is this crazy? It is no more difficult than selling other units, and solves a number of problems.

    Here’s how it should work.

    (Note that the sale method must be smooth and non-intrusive; this is an interface issue. Steve Jobs has shown with Itunes that people will buy content, if it’s easy, smooth and cool.)

    Publishers place source content on special content servers. The source content can be anything from finished pieces to manuscripts and raw notes. The source contents do not change, so the addresses of content do not change. Let’s call these source units “content scrolls”.

    A publisher sets a price per character on a given content scroll or makes it free (‘free’ means setting a price of zero).)

    When you click to get a document, first there comes an empty frame and a list of the content portions. (So far no payment.) Now your viewer program sends for each portion separately (just as today’s browser brings in pictures from all over to make one busy illustrated page). Each portion is delivered as soon as payment is assured.

    Each portion is sold from where it sits in its original content scroll. Each downloaded portion, no matter how small, is paid for according to size (the number of characters) and the price per character.

    There need be no minimum download, since accounting can be to the millionth of a cent (now we’re talking MICRO!)

    Of course you don’t get a portion or see it unless you pay for it. But you can skip downloading any portion and thus not pay for it, since (if you want) you can see its price, origin, or size.

    (You should also be able to set a threshold saying “if I click and the cost is under X, just buy it.”)

    The portions retain their identity– source addresses– so that if a reader has already bought a portion, it’s just pulled from where it already resides in the reader’s cache memory.

    Having the source address also means the user may follow any quotation to its origin with just a click.

    Of course a document so distributed may be one big portion– a whole consecutive source article– or built up from many portions of different sources.

    “But this won’t work on the Web!” you say. We’ll get to that.

    THE UNSUNG COPYRIGHT ISSUE

    Though copyright is now a huge public issue, people usually discuss only one aspect (unauthorized grabbing of content), and that in polarized, Manichean terms: downloading thieves (or liberators) versus copyright defenders (or trolls).

    A key issue not being discussed is re-use of content– a fundamental aspect of conventional publishing.

    In the paper world it’s tough. If you’ve ever tried to publish an anthology, produce a documentary film, or publish an article with long quotations in it, you know the enormous complication of licensing the re-use of copyrighted material.

    Publishers are accustomed to making copyright deals with other publishers, in advance, for a certain press (or production) run. This is a bureaucratic and confrontational hassle of negotiation, contracts, payment, publication of a pre-negotiated quantity (or venue)– this is a draggy system of licensing that requires tight predicting of press runs and sales.

    Now comes the beauty part. The whole negotiation issue can be finessed within the system described. Each publisher is exactly rewarded for re-used or quoted material, but no negotiation among publishers is required; the re-used material simply comes from the servers of the original publishers. (The Transcopyright permission method gives this a legal basis.)

    SHOVEL-READY

    Forty years ago, even twenty years ago, these ideas sounded insane to people. But I have grown accustomed to the grudging vindication of my ideas one by one. People sneered when I said there would be a big market for personal computers. People laughed at the notion of world-wide hypertext.

    Now perhaps people are ready to see other facets of the original idea, including micropayment, but will it be the real deal?

    What I am proposing is a different document format– a compositing format for serious document work and intercomparison, as well as for salable content.

    The deep document structures I propose, and their different linkages, views and payment, have been prevented by the present methods of the World Wide Web, based on its viewer standard– called the Web browser, based on computer traditions. I’ve argued about this with Tim Berners-Lee (whom I like and respect), but he is locked to his traditions. He created the original Web simplification of hypertext and now controls the Web through the browser standard. It will not change.

    However, recently there have been breakthroughs in viewing methods that bypass the Web rules– YouTube, and the view for veiled content offered by Amazon and Google. These work in the Web frame but outside the conventional Web page. This may be the best approach to finally getting serious documents. It makes the system “shovel-ready”, in today’s fashionable term.

    Progress involves back-and-forward steps. Old thinking often takes a while to come alive in new minds. Back to the future.

    hcoinRemarks-D28=30=


    MY NEW BOOK, ‘GEEKS BEARING GIFTS’
    Version 1.1 is already out– see
    http://stores.lulu.com/store.php?fAcctID=132719

    Theodor Holm Nelson
    Founder, Project Xanadu
    Visiting Fellow, Oxford Internet Institute
    Visiting Professor, University of Southampton

  • m0j0

    Mr. Nelson,

    Thanks very much for the clarification! And thanks for your work, however bastardized it may have become.

  • http://byjoeybaker.ocm Joey Baker

    Mr. Nelson —

    Thank you so much for you post. It was fantastic to hear it from ‘the horse’s mouth.’ I truly respect your work, and your efforts, but I have to disagree with your idea, which, if I understand correctly boils down to charging the user by the character. My issues are these:
    • It encourages people/newsorgs to write more, and write fluff, so that they can make more money
    • The number of chars doesn’t determine the quality of what you’re reading
    • How do you charge for pictures? Movies? Audio?
    • It still puts up a paywall, which discourages users from looking at information/news that they may need, but not be willing to pay for. This could lead to a subversion of the Fourth Estate.
    • Aside from being a micropayment, it also makes the user micro-manage their information. That’s not user friendly or cool like iTunes.

  • http://www.informationvalet.org Bill Densmore

    Ted:

    Thanks for weighing in. Since 1994, when I began thinking about a system for transactions on the web that would help newspapers to be compensated for referring readers to information from anywhere, people who thought deeply about our ideas have said to me: “That sounds a lot like Xanandu.”
    — bill densmore
    http://newshare.typepad.com/about.html

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