of the business that has not faired well online. A possible reason for this is that people now consume news from an increasing variety of outlets. This makes it harder for advertisers to know what they are paying for. When people divide their attention, advertisers need to guess where to target them. Technologies may solve the targeting problem, but news outlets could help themselves by reconsidering the way they present information. Facebook, with its sharing model for the news, is, in fact, solving the problem in the advertising market by providing a magnet for consumers and a target for advertisers. In the process, it is demonstrating what the future of news organizations might look like. In addition, a sharing perspective might lead news outlets to focus on other means of obtaining payment for how the news is presented rather than for the news itself.
Thinking about shared information, and innovative business models to achieve it, is really in its infancy. Platforms are developing that allow content to be distributed and then read easily. These are likely to produce important competitive forces for consumer attention. In addition, while this book focuses on shared information in the sense of its distribution, efforts are emerging to facilitate sharing in the creation of information itself. Consequently, if information really wants to be shared, we are likely to find more ways to do just that in the future.
1. See the account by Peter Galison, Einstein’s Clocks, Poincare’s Maps: Empires in Time (New York: Norton, 2003). This book was brought to my attention by Scott Stern, who had been asking the question, “If patents were granted for non-obvious inventions, then what was non-obvious to Einstein?” It turns out that the answer may well have been clocks.
2. As James Gleick documents, getting to shared time took a tremendous amount of effort, from the precision of atomic clocks to the housing of the actual time at the old Naval Observatory on the grounds of the US Vice President’s residence; see Faster: The Acceleration of Just About Everything (London: Little Brown, 1999).
3. Richard Stillson, Spreading the Word: A History of Information in the California Gold Rush (Lincoln: University of Nebraska Press, 2006).
4. In expositing this view, I will rely on the tools of economic theory. And, for that reason, while I will frequently allude to examples that illustrate the theory’s implications, I cannot claim here to be providing proof. Nonetheless, if every theory required proof as it was exposited, there would be no progress. So there is important value in this exercise.
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Free Information
The title of this book is a slight modification of a now famous saying, “Information wants to be free.” For information sellers, that notion has loomed as a threat as well as a warning against giving in to what information may want. For information consumers, that notion seems to encourage them to release information widely. The digital revolution, it suggests, has permitted information to be closer to its essence, posing a challenge for businesses going forward.
In actuality, the saying has several interpretations, each with a different implication. The first interpretation involves a set of predictions regarding what the price of information will be. The second, a statement regarding what the price of information ought to be. The third, a set of beliefs regarding the constraints on information’s use. In each case, there are implications for those who have information to sell and the business models they can utilize to do so. However, each is dressed up in certain presumptions that can obscure what digital technologies now allow in terms of sustainable business models for information.
Predicting the Price of Information
The origin of the saying “information wants to be free” was a remark by Stewart Brand to Steve Wozniak at the Hackers Conference in 1984. Brand said,
On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other. [1]
Somehow, we’ve forgotten all but part of the third sentence of Brand’s comment. In its entirety, it is a statement regarding what price information might sell for and it is agnostic regarding whether that price might be high or low. In that respect, information is in good company.
The standard way to predict price movements is to examine changes in supply and demand. In the case of information, the easiest place to start is supply and, specifically, why information might want to be free: the cost of distributing information is falling and is now arguably costless. (Because someone has to allocate attention to processing some particular bit of information, there are always costs in getting information through the last neuron. But up until that point, nowadays, getting an extra bit of information from where it is to a person does not take up real resources.)
The reason there is a price is to economize on scarce resources, but if distribution costs are zero (or nearly so), then a price of zero will not stand in distribution’s way. This is why “information wants to be free” is that part of Brand’s quote that is so often evangelized. [2] It is perfectly consistent with this piece of the economics of information and the logic that “since it isn’t costing anything for you to release information to me, I might expect to be able to get it without having to pay.”
While information wanting to be free has to do with its supply, information wanting to be expensive is a statement about demand. In particular, Brand notes that information can be useful and valuable to individuals. And the economic logic goes something like, “If information is valuable to you, by paying me, I’ll have an incentive to release it to you.”
Seen in this light, information is no different than many other goods traded on the market. Coffee, for instance, can be produced at relatively low marginal cost even though many people desperately need it every morning (and most afternoons). The eventual price of coffee will reflect both of these things, the low marginal cost of production and distribution and the great demand. We would not, however, describe the eventual price as a fight. If coffee cost a lot to produce, one would not normally consider peace breaking out in the coffee market. Thus, the tension that Brand identifies is not fundamental to information. Instead, it is just a statement that there happens to be a supply side and a demand side to information, and like all other goods and services, that their resolution determines price.
Yet the ambiguity in Brand’s mind regarding what will happen to the price of information is real. Information has become cheap to distribute and, possibly, more valuable over time. Both supply and demand have increased. Economics 101 tells us that, under these circumstances, one cannot say whether its price should rise or fall, if information should be free or expensive. What one can say is that more information wants to be distributed and consumed. Each force reinforces the other to provide more information than before. It isn’t a fight but a mutual effort toward more. And when it comes down to it, it is how much information exists rather than what precisely it sells for that is economically relevant.
Copying and Pricing
There is another set of predictions inspired by the Brand quote that more strongly suggests a downward movement in the price of information. Two effects follow from the adoption of digital technology in the realm of information. First, the technology
