What are you spending your social capital on?

In a recent podcast, Joel Spolsky made a very valid economic point about new media (you can listen to it here). He was talking about the decline of print journalism which you may or may not see as a bad thing. He suggested that the new media will find it much harder to support in-depth investigative journalism. I was reminded of this again when reading that Joe Saward is asking for donations to keep him flying to all of the races: http://joesaward.wordpress.com/2009/09/22/thoughts-on-the-f1-calendar/) Perhaps he can make it work, but as newspapers decline, we do lose what Joe calls authority and what Joel calls depth.

Essentially what they are talking about is that print journalists will often be assigned a beat, be it Formula 1, be it politics. They are paid to attend all the sessions of the sub-committee on water supplies in Croydon just in case one time somebody says something that is news. Knowing the subject deeply and authoritively is what makes it possible for you to be objective. It stops the worst of the ‘me too’ journalism, where an interested party posts a press release and everyone else reports it as news. News should never just be the dissemination of “what we have been told”, but rather it should be “what has happened”. Currently we are beginning to lean too much towards regurgitation.

Print is dead, or at least mortally wounded, and so we have to work out how to pay for the right kind of journalism. Micropayments, tip jars and so on have a distorting effect. People only pay on the days when the story seems worth it, or when you remind them. The previous model means that the celebrity tittle tattle 365 days of the year, paid for the one-off discovery by the Telegraph of the expenses scandal. In the interconnected world of blogs these wouldn’t fund each other because they would be two different blogs. And the expenses journalist doesn’t have a story for the rest of the year because they are doing deep research for the next piece.

The other problem that Joel raised was the economic one. People forget when they are spending money on the internet. It’s an odd concept, money, and it foxes people all of the time. Take Craigslist, the classified advertising service. People love Craigslist because it’s free. But it turns out that classified listings in the back of newspapers were essentially what was keeping the newspapers afloat.

Now, and this is where it gets complicated, we have two stories of what’s happening. Craig of Craigslist explains that what he’s doing is a social good because he has worked out a way to give this advertising away for free. But in economies things don’t really work like that. People and companies that were using his service were willing to pay for their adverts. If you are selling your house for hundreds of thousands of pounds you are willing to pay your estate agent to sell your house, and your estate agent is willing to pay for the advert in the paper which means that the paper is willing to get some readers for your advert. And so we go on.

Now the same estate agent was willing to pay $300 to place an advert can place the advert for free and so doesn’t bother. It’s estimated that Craigslist has reduced spend on classified advertising by around $1 billion per year. That money hasn’t disappeared. It’s gone to making Estate Agents and people who otherwise would have been happy to pay but find £5 in their pocket and do with it whatever they please.

In economic terms, this free product that people were willing to pay for results in that $1 billion is being spent on putting the print newspapers out of business, or more specifically, it’s being spent on putting investigative journalism out of business.

Craig doesn’t want the money, and that’s admirable. But couldn’t he collect it and set up a fund that paid for good quality journalism? Because if we lose good quality journalism, then we lose our ability to know that we are free people.

One thought on “What are you spending your social capital on?

  1. Paul Freeland says:

    I have been wondering (worrying?) about this myself for some time. The internet is teaching us to expect all content for free. I am as guilty of this as anyone, although I still buy Wired for the great in-depth articles they have. I would hate to loose those.What's the answer? We need to start paying for quality I guess. The problem is, there is not a lot of in-depth on internet blogs and the like. Also, because things are updated daily, you don't get that weekly or monthly dump of new things to read.I have only just started paying for internet content. Maybe things are slowly starting to come around. Perhaps the explosion of ereaders and the like that we have with us always will make internet content more "payable" as we are not stuck on a computer to read.Thanks for these thoughts Alex.Paul.

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