Thursday, November 14, 2013

Thoughts about the Future of Print

My work life is mostly in the world of print. I run an academic economics journal. Yes, I give some lectures now and then, but I write this blog, and I have written an introductory economics textbook and a book for the general public on understanding economics. So I'm always on the lookout for articles on the future of media in the digital age, and here are three that recently caught my eye.

Frank Rose writes on "The Future of Media: First Print, Then Cable," in the Fourth Quarter 2013 issue of the Milken Institute Review. He sets the stage with a review of how

"Contrary to popular belief, the 20th century did not end at the same time for everyone. For those in the music business, it sputtered to a halt with the close of 1999 – the year recorded-music sales in the United States reached their all-time high of $14 billion; by 2012, sales had dropped to half that. For newspapers, the end of the century arrived a year later, when U.S. ad revenues hit nearly $49 billion; now they’re down to a mere $22 billion. Hollywood was able to stave off the century’s demise until 2002, when box-office admissions in the United States and Canada peaked at 1.6 billion; last year they were down 15 percent from that (which is not bad, considering). Magazines, for their part, seemed to lead a charmed life – through 2006, anyway, when ad pages topped out at 253,000; since then, they have dropped by a third. As for television, the major broadcast networks have been on a slow, inexorable slide into the future for decades. In 1980, according to Nielsen, well over half the TV sets in America were tuned to ABC, NBC or CBS during prime time. By 2012, even with the addition of the Fox network, the portion tuned to a broadcast network was below one quarter."

Rose also describes what he sees as three key expectations that are emerging for media in the digital age. 
"Over the past few years, as more and more people have become comfortable with smartphones, tablets and services that let you buy or stream stuff online, three key expectations have emerged. Any one of these would be challenging to a 20th-century media company. Taken together, they require a total rethinking of the enterprise. First, people are coming to expect an infinitude of choice. They want news and entertainment on their own terms. They see no reason they shouldn’t be able to watch movies or TV shows or listen to music whenever they want, wherever they happen to be, on whatever device they have with them – and with a minimum of advertising, thank you. ...  Meanwhile, a second set of expectations has been developing. Humans have always
wanted to somehow inhabit the stories that move them – to be spellbound, entranced, transported to another realm. ... Historically we’ve managed to plunge in with whatever technology is at hand, from books to film to TV. But digital raises the possibility of immersing ourselves even further, and in entirely new ways. ... But there is a third, closely related expectation as well: more and more, audiences expect some kind of active involvement. No longer passive consumers, they now want to be participants – critics, providers and (through the act of sharing on social media) distributors of information."
But oddly enough, you may have noticed that Rose's list of media industries that have been overwhelmed by digital forces doesn't include plain old books. Evan Hughes offers an argument for why plain old books have held up so well in the digital era in "Books Don't Want to Be Free," which appears in the October 21 issue of The New Republic.
"If you’re in the business of selling journalism, moving images, or music, you have seen your work stripped of value by the digital revolution. Translate anything into ones and zeroes, and it gets easier to steal and harder to sell at a sustainable price. Yet people remain willing to fork over a decent sum for books, whether in print or in electronic form. “I can buy songs for 99 cents, I can read most newspapers for free, I can rent a $100 million movie tonight for $2.99,” Russ Grandinetti, Amazon’s vice president of Kindle content, told me in January. “Paying $9.99 for a best-selling book—paying $10 for bits?—is in many respects a very strong accomplishment for the business.”
Hughes emphasizes two main reasons why books have held up so well in the digital era. First, books are they are less vulnerable to disaggregation: you can pull apart and sell individual songs on an album of popular music much more easily than you can pull apart chapters of most books. Second, books are already so low-tech that they are in an odd way less affected by digital technology.

"Part of the problem for journalism, music, and television is that they are vulnerable to disaggregation. Their products are made up of songs and articles and shows that have long been consumed in those individual units. Once the Internet made it possible to ignore the unwanted material, overall value slipped. Easy access to favorite singles opened those up to impulse buys—but also made purchasing the whole record feel almost indulgent, a splurge for audiophiles and diehard fans. Now the TV viewer wants “Breaking Bad” without bills from Comcast. The ability to score individual articles by the clicks and ad dollars they reap has exposed vital but embattled forms like international reporting and arts criticism to further pruning.
Hollywood has fallen victim not to disaggregation but to its opposite: Netflix and the like have bundled films into affordable smorgasbords, undermining the perceived value of each movie. (More recently, Pandora and Spotify have hit music from this second flank.) The dark side of digitization—piracy— is obviously another force at play. Sites like BitTorrent, following in Napster’s wake, have helped convince a generation that they shouldn’t have to pay for the goods. In publishing, meanwhile, the deal with the customer has always been dead simple, and the advent of digital has not changed it: You pay the asking price, and we give you the whole thing. It would make little sense to break novels or biographies into pieces, and they’re not dependent on the advertising that has kept journalism and television artificially inexpensive and that deceives the consumer into thinking the content is inexpensive to make ...
Some print stalwarts find e-readers a step down, but the fundamental experience of immersing yourself in a text is not bound up in any particular medium or venue. Reading never depended too much on sensual verisimilitude, only a mental leap from the words to the ideas they represent. The book is so low-tech, it’s hard for technology to degrade it.
Finally, what a lot of digital media comes down to is the issue of how to get and keep the attention of possible consumers. Hal Varian emphasizes this point in "The Economics of the Newspaper Business." a talk he gave at an Italian journalism awards ceremony in September. The talk is an absolutely elegant example of how to say something real and interesting in a very short time window. Varian argues: 
"The fundamental challenge facing newspapers is to increase the time people spend on their content. ... Subscribers to physical newspapers spend about 25 minutes a day reading them. The typical time spent on an online news site in the US and UK is about 2-4 minutes, roughly one-eighth as much. Interestingly, newspapers in the US make about one-eighth of their total ad revenue from online ads. If readers spent as much time reading the online content as the offline content, ad revenue from online content would be much closer to the offline revenue."

My job is to be Managing Editor of the Journal of Economic Perspectives, which is one of seven journals published by the American Economic Association. A couple of years ago, the AEA made a decision that all issues of the journal, from the first issue back in 1987 up to the most recent, are freely available online. Both individual articles and entire issues can be downloaded to readers like Kindle or Nook, too. Of course, making a publication free only works because the AEA has income from other sources, like dues from its members, subscriptions from libraries, and payments for the EconLit service it runs that indexes the articles in academic economics journals. This blog, like many blogs, is created from curiosity, obsessiveness, and attention-seeking, but is otherwise done without any specific payment.