Stop thinking in money, Mr. Murdoch!

Dear Rupert Murdoch,

I may not be in any position to give business advice for you, Mr. Murdoch, but since you started pushing forward your idea to start charging for online news content, I couldn’t help saying to myself: “You just don’t get it, do you, Ru?” Since I know you’re reading this, let me share you some widely agreed thoughts about how things work nowadays. May this blog post be called “Internet economy for dummies: Love is no more the only thing money can’t buy”. This should be obvious information for the younger generation, but you’re not one of them.

To simplify to extreme: in the “old economy”, whenever we create something, resources are used, and because resources are scarce, this “something” has a cost. This cost then affects the monetary value of this “something”. For example when we make a newspaper, the approximate monetary value of the newspaper can be counted by adding the costs of paper, ink, labor, copying, distribution etc, and then dividing the number with the amount of copies. To make a newspaper you need money, and that keeps the poor idealist hippies at bay.

But what if paper, ink, copying and distribution had no cost and the amount of copies is unlimited? Then the same calculation brings the monetary value of the newspaper to approximately zero. Add the fact that everyone has an unlimited amount of paper and ink, distribution would be instant world wide and everyone can make a newspaper for free. Now, how much can you charge for it, when idealist hippies are writing the same stuff for free and have the same audience?

Unfortunately for you, Mr. Murdoch, the Internet was invented and we moved to another era. Publishing transformed from scarcity to abundance and this means the economical models are different. It’s not simply about money anymore: we have new currencies, such as reputation. The USD on your bank account has been rivaled not by EUR, but by WLR (Wikilandia Reputation), a currency of reputation, good will and ego boasting. Open source is a serious competitor to your model: Most of the world’s servers are running Linux, the biggest rival of Internet Explorer is Firefox and Wikipedia is our most important single source of information. All three are ridden by non-profit foundations rather than money. They have value that money can’t buy, and *boom*. Money has lost some of its power.

I can just imagine how much you would be willing to pay for Wikipedia but – I hear your curse – owning Wikipedia is impossible. It works outside your world, in a different dimension where money can’t buy content.

Then what is valuable, you might ask? At least money is not valuable anymore. YouTube is still making losses every day, but still its value is counted in billions. You probably would have stayed away from that kind of business, but Google seems rather happy to own this little peace of money-eater it bought couple of years back. Maybe Google thinks more about the value than the money. For Google, which is a 100% Internet company, money is a mere number, credits instead of bills and coins. It’s not the main focus, the primary objective on their radar. Google understands that money has the tendency to find its way to where people are. In the internet, you can be big without being rich!

But don’t worry! Even though you’re better in the USD-based economy than WLR-based one, you have a chance: Just that you can’t really sell air doesn’t mean you couldn’t make USD out of it: You can sell compressors, air fresheners, ventilators or scuba diving equipment. You have to make it special. Nobody buys air just to get the oxygen required, but to add value to their lives by specialized air products. Just like nobody pays for the news anymore, but are prepared to pay for specialized highly valued content or better consuming experience that is not available for free.

(Of course, if you happen to be a cigar-smoking representative of music of film industry, you can always push out legislation that turns online content usage and effective independent publishing into criminal activity. This still seems to be too easy.)

For further reading, I suggest the following:
Free: The Future of a Radical Price by Chris Anderson
What Would Google Do? by Jeff Jarvis

Tags: free content, news