I have to leave the same comment here that I did over on google+ when I first saw this story.
OK, three things:
1) It's named "The Daily Mail". May as well be the Daily Town Crier, or the Daily Cave Painting.
2) I'm not sure I can trust anyone named "The Baroness". I grew up with G.I.Joe.
3) How many times do we have to see legacy media backlash against technological advances, and how it's "making us dumber". It's the same rehashed Theuth and Thamus for the past 2500 years, and the disrupted establishment has been proven wrong each and every time.
1) It's cost has dropped significantly (as you point out)
2) Competition and efficiency in delivery have thus passed that drop in cost to the consumer in forms of lower price
3) Anytime price is lower than value, we buy. Value has remained constant, cost, and thus price, have fallen.
This is indeed the same mechanic going on in Silicon Valley. The filters we use for search and discovery are still catching up to the abundance that has occurred.
To expect the filters to be put in place before the abundance is to put the cart before the horse.
We've heard this before; Harvey Swados, 1951, re: the paperback book:
"Whether this revolution in the reading habits of the American public means that we are being inundated by a flood of trash which will debase farther the popular taste, or that we shall now have available cheap editions of an ever-increasing list of classics, is a question of basic importance to our social and cultural development."
I feel so bad for the large group of people who see abundance as a threat.
I wrote a bit about how our social graph is created ever-better filters for discovery of new content, and how abundance actually solves it's own problem as our social tools get better. I refer to this as "crowdsourcing curation". You can read more over on my "crappy blog."
The difference between the disruption seen in 1959 and the disruption today, is that it was two different (but related) industries that were vying for control of a distribution medium. Throughout media's modern history, the reigns of power have changed hands but there was still scarcity in play (sometimes artificial, sometimes natural). The gatekeepers changed positions, but they were always gatekeepers.
The Internet removes that scarcity, and removes those gatekeepers. I'm not saying that we won't find a way to benefit from this new structure, but I am saying that it is truly novel, and not just a continuation on a historical curve. I'm not sure that history can inform us on this matter.
Thanks for the reply. You may want to see my response to Mike above.
I think the music industry is a very good example of what I was questioning. The industry is expanding, but capitalization is definitely shrinking.
There are more players than ever getting their slice of the pie, but that pie is certainly shrinking (if the pie is measured in capital only). Lucky for them it was a really really big pie when it started to shrink.
The Internet added Value to the music industry, but it added it in a way that Capital couldn't capture it. I see this a lot when the Internet disrupts some legacy industry.
More than anything else, I think that the fact that there are at least 4 people that publicly wrestled with some sort of neologism to describe this phenomenon tells us that the English language was lacking a proper descriptor.
"Publicity" just doesn't sit well enough to encapsulate the concept for many. As Jarvis said: It's too "freighted with meaning".
While I think the argument over whether or not IP law fosters or inhibits innovation is a worthy one, I don't think it matters in the long run.
Individuals are taking over production and sharing of Intellectual Property, instead of just sitting around consuming it, now that the tools for it exist. Sooner or later, these legacy markets won't be able to compete with what individuals are doing for themselves in areas like music, open source software, news gathering and delivery, just to name a few.
IP is indeed DOA for the 21st century, but we don't have to change any laws to kill it. It can't compete with our urge to create and share for free.
The efficiency, in the case of Intellectual Property, is passed directly to the consumer. Believe me, the RIAA *hates* the new efficiency of iTunes. Newspapers *hate* the new efficiency of craigslist, blogs, twitter, and digital distribution.
We're the ones pocketing the gains, not the companies. Their business models are crumbling, and they're having to cut real jobs to stay afloat. The question is, are we pocketing enough gains to make up for the requisite losses in jobs.
One of the points that led me to write the article I did was that there doesn't need to be any change in IP law, or any violation of it, to have intellectual property move towards free (or at least, very, very cheap).
I'm not arguing that it this is a good or a bad thing, but something we will likely have to contend with, just as the music industry and newspapers are trying to do already.
Additionally, when I hear all the heralding of a new "knowledge economy" that we should be striving for, I worry that we're abandoning or chasing away the industries that will never approach "free" - industries that rely on atoms, not bits.
If you're right and "IP is America's bread and butter", and I'm right, and "IP is heading towards a commune instead of an economy", we're in for a very rough ride.
Thanks for the link and the kind words. You're absolutely right that I didn't focus on the *opportunity* side in that post, but I definitely see it as being there. "Deflation" is a value-neutral concept, and it has it's advantages, particularly in this economy.
Let me clarify a bit. I believe that this efficiency will make the economic markets they affect "shrink" in terms of economy and capital. It doesn't mean that the number of variation of the products available will shrink, just the capital involved.
Innovative deflation lets $100 Million at Craigslist undercut $100 Billion dollars that used to service the same thing in newsprint. We're getting better and more varied services and products (especially in intellectual property) for much cheaper, but it's also costing lots and lots of jobs without replacing them, taking money out of the economy.
My big fear is that a "knowledge economy" is being touted as our obvious salvation, but much of what a knowledge economy brings in with it may be prove terribly difficult to monetize in the long run, at the same time that this efficiency is driving out employment in traditional markets without replacing it.
Couldn't we take advantage of this deflation to help cushion the blow of falling wages? How much of our income is dedicated to intellectual property, and its derived products? If wages decrease at the same time as cost-of-living decreases, are we really that bad off? Deflation moves in both directions, as it were.
Hours will be cut. Wages will fall. So too will the cost of living fall as these efficiencies are passed on the consumer. The balance between these two forces will be the key to determining how painful the transition is.