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peristaltorOkay, folks, I'll be honest; I've been waiting for a device like Amazon's Kindle for quite some time. Small, portable, readable, and -- perhaps best of all -- connectable directly to the internet for content. It's cheaper than a laptop, uses less power (I assume), has a direct-light readable screen, and could solve one of the nagging problems faced by the newspaper industry today: It could lower the high cost of printing papers.
According to an episode of On The Media, however, Amazon might be trying to get too greedy with its new-fangled reader.
Some background material is in order. Joseph Schumpeter, an economist of the Austrian school, coined the term "creative destruction" to describe technical progress in an industrial age. Essentially, new innovations reduce the manpower, raw material, energy and time requirements of the old way of doing things -- no matter if "old" is measured in minutes or millennia -- thus driving competition and, in the process, freeing up human and physical capitol for use doing other things. From the Wiki:
For examples, think of any big household name in business and industry, and you will probably think of a destroyer of old business. For thousands of years, Bibles and other sacred texts were hand copied by scribes in monestaries up until Gutenberg perfected the Western version of movable type. This started a revolution in printed material that dominated up until the present day, and allowed for people to disseminate their ideas far and wide for relatively little expense. Gutenberg lead to Hearst, to Pulizter, to all the big names in publishing.
Just over a hundred years ago, L. C. Smith jumped on another gale and turned his shotgun machine works to work making those new-fangled typewriters. His machines and those of his competitors retired scribes almost altogether and created another lost anomaly, the steno pool, enormous warehouses of typists copying text for letters and other document needs. Next, consider Xerox and their copiers that reduced and eventually eliminated the steno pools, which were obviated still again by Microsoft and others which, along with the cheap printer, made copying a master almost a thing of the past.
My point in all of this? With each technical leap, the profits of the succeeding company/technology came from the losses of the companies/technologies that preceded them. When IBM came out with an affordable adding machine, business needed fewer humans adding and balancing the books, leaving a single bookkeeper able to do the computational work formerly performed by many others.
In a nutshell, creative destruction leads to job losses in the near term.
Well now we have the probable losses of most of America's news industry. Yes, yes, I know, we still have radio and television. Have you ever noticed, though, how most of television news is comprised of sensationalized non-news filled in with follow-ups on stories originally found in the local newspapers? When you remove the least expensive news to produce, the written word, you raise the base price of any given news story and thus reduce the number of news stories folks are will to consume.
This might have disastrous results, according to May 8's OTM. They first covered testimony before congress on the future of news gathering. This section struck me: David Simon, creator of The Wire, noted that aggregating bloggers don't do anything to enrich the reporting they disseminate, and thus are leading to a weakening of news gathering in general. Arianna Huffington disagreed:
Then OTM brings up the Kindle, the device that could distribute newspaper content to subscribers, thus reducing the printing costs all newspapers face without entirely giving up the newspapers' revenue source. The story following the testimony delves into the Kindle with one enthusiastic apologist, Paul Saffo, technology forecaster and Visiting Scholar in the Stanford Media X Research Network. He's optimistic. Brooke Glalstone, however, finds a flaw:
Wait. Did he just say that younger kids have no problem buying things twice?!? On what planet his he living? This planet, the one called Earth, is peopled by enthusiasts not of multiple payments, but of absolutely free digital stuff. To claim that, when it comes to the printed word, these thieving generations that made Napster, Kaaza and Pirate Bay household words would abandon all old habits and just chuck a few bucks toward Amazon is laugh-out-loud ridiculous.
Notice I didn't claim the kids would be hucking their bucks to the newspapers, but to Amazon. Here's another fly in the Kindle ointment I should mention, the deal Amazon is offering to newspapers for the privilege of saving their industry:
30 percent of revenues and no rights to other media. That's insane.
What is Amazon doing here? Exactly what the record labels and the movie industry did with music and movies, quashing a fair chance for anyone who isn't a complete moron to get decent content -- by giving a fair share to the content producers, not the content distributors -- without stealing it. In less than a year, someone will slap together a hack (if is hasn't been done already), a Kindle-esque reader without the troublesome tendencies for giving unreasonable chunks of cash to Amazon. In the process, of course, the content will have to be stolen, because of course Amazon will have locked up willing (and desperate) newspapers into exclusive contracts that prevent anyone from getting the content any other way.
The recording industry created Napster by quashing digital downloads at any price. Television and movie executives likewise created wide-spread movie piracy because they didn't listen to folks who got sick of the endless commercials and silly "Piracy is Theft" ads. Sadly, sadly sadly, Amazon seems to be joining the list of companies so hell-bent on endlessly profiting from the work of others well beyond a reasonable level that theft will prove the only alternative. They are attempting to do what no one has ever been able to do ever before, to create a creative lull buttressed by contract law alone that will feed them profits without effort on their part.
In essence, lulls are vacuums. You know how nature feels about those.
According to an episode of On The Media, however, Amazon might be trying to get too greedy with its new-fangled reader.
Some background material is in order. Joseph Schumpeter, an economist of the Austrian school, coined the term "creative destruction" to describe technical progress in an industrial age. Essentially, new innovations reduce the manpower, raw material, energy and time requirements of the old way of doing things -- no matter if "old" is measured in minutes or millennia -- thus driving competition and, in the process, freeing up human and physical capitol for use doing other things. From the Wiki:
The opening up of new markets and the organizational development from the craft shop and factory to such concerns as US Steel illustrate the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one ... [The process] must be seen in its role in the perennial gale of creative destruction; it cannot be understood on the hypothesis that there is a perennial lull.
—Joseph Schumpeter, The Process of Creative Destruction, 1942
For examples, think of any big household name in business and industry, and you will probably think of a destroyer of old business. For thousands of years, Bibles and other sacred texts were hand copied by scribes in monestaries up until Gutenberg perfected the Western version of movable type. This started a revolution in printed material that dominated up until the present day, and allowed for people to disseminate their ideas far and wide for relatively little expense. Gutenberg lead to Hearst, to Pulizter, to all the big names in publishing.
Just over a hundred years ago, L. C. Smith jumped on another gale and turned his shotgun machine works to work making those new-fangled typewriters. His machines and those of his competitors retired scribes almost altogether and created another lost anomaly, the steno pool, enormous warehouses of typists copying text for letters and other document needs. Next, consider Xerox and their copiers that reduced and eventually eliminated the steno pools, which were obviated still again by Microsoft and others which, along with the cheap printer, made copying a master almost a thing of the past.
My point in all of this? With each technical leap, the profits of the succeeding company/technology came from the losses of the companies/technologies that preceded them. When IBM came out with an affordable adding machine, business needed fewer humans adding and balancing the books, leaving a single bookkeeper able to do the computational work formerly performed by many others.
In a nutshell, creative destruction leads to job losses in the near term.
Well now we have the probable losses of most of America's news industry. Yes, yes, I know, we still have radio and television. Have you ever noticed, though, how most of television news is comprised of sensationalized non-news filled in with follow-ups on stories originally found in the local newspapers? When you remove the least expensive news to produce, the written word, you raise the base price of any given news story and thus reduce the number of news stories folks are will to consume.
This might have disastrous results, according to May 8's OTM. They first covered testimony before congress on the future of news gathering. This section struck me: David Simon, creator of The Wire, noted that aggregating bloggers don't do anything to enrich the reporting they disseminate, and thus are leading to a weakening of news gathering in general. Arianna Huffington disagreed:
ARIANNA HUFFINGTON: Actually, if you look at, for example, Voices of San Diego, which is a not-for-profit site that is exposing precisely what you are talking about, local corruption, and actually having real impact investigative journalism, that is happening around the country.
DAVID SIMON: The day I run into a Huffington Post reporter at a Baltimore zoning board hearing is the day that I will be confident that we've actually reached some sort of equilibrium. You know, the next 10 or 15 years in this country are going to be a halcyon era for state and local political corruption. It is going to be one of the great times to be a corrupt politician, all right?
Then OTM brings up the Kindle, the device that could distribute newspaper content to subscribers, thus reducing the printing costs all newspapers face without entirely giving up the newspapers' revenue source. The story following the testimony delves into the Kindle with one enthusiastic apologist, Paul Saffo, technology forecaster and Visiting Scholar in the Stanford Media X Research Network. He's optimistic. Brooke Glalstone, however, finds a flaw:
BROOKE GLADSTONE: Some people have criticized the Kindle because basically what you've purchased is locked onto your device, but you don't own the content. You can't lend it to a friend, unless you hand over your Kindle.
PAUL SAFFO: Nothing new ever comes into our lives without a hidden curse. And all the convenience of having it in electronic form comes with that price. And -- it troubles me greatly.
Those of us who remember when we could share books with friends will be bothered by this for the rest of our lives, and a younger generation that grows up with the idea that you buy things and you use it once, and if you want it again you buy it again, aren't going to be bothered. (Emphatic rage mine.)
Wait. Did he just say that younger kids have no problem buying things twice?!? On what planet his he living? This planet, the one called Earth, is peopled by enthusiasts not of multiple payments, but of absolutely free digital stuff. To claim that, when it comes to the printed word, these thieving generations that made Napster, Kaaza and Pirate Bay household words would abandon all old habits and just chuck a few bucks toward Amazon is laugh-out-loud ridiculous.
Notice I didn't claim the kids would be hucking their bucks to the newspapers, but to Amazon. Here's another fly in the Kindle ointment I should mention, the deal Amazon is offering to newspapers for the privilege of saving their industry:
BROOKE GLADSTONE: Now, you testified about your negotiations with Amazon regarding the Kindle electronic reader. Could you tell us about that?
JIM MORONEY (of The Dallas Morning News): Somebody was bringing up the Kindle as the solution we should all be focused on. And I love the Kindle. I read books on it all the time. My problem is that after negotiating and negotiating and negotiating, the very best deal we could get from Amazon was to split revenues for whatever price we decided to charge. We could get 30 percent of that money. They get 70 percent.
BROOKE GLADSTONE: Wow.
JIM MORONEY: I could have probably lived with that, but there was another clause in there that they would not give me relief on, and that said that they have the right to re-license my content to any portable device, not just an Amazon-owned device, any portable device. In essence, I was giving them a complete licensing agreement for nothing for all of my content, period.
I'm sort of – that’s - give away my future, you know. (Again, emphasis mine.)
30 percent of revenues and no rights to other media. That's insane.
What is Amazon doing here? Exactly what the record labels and the movie industry did with music and movies, quashing a fair chance for anyone who isn't a complete moron to get decent content -- by giving a fair share to the content producers, not the content distributors -- without stealing it. In less than a year, someone will slap together a hack (if is hasn't been done already), a Kindle-esque reader without the troublesome tendencies for giving unreasonable chunks of cash to Amazon. In the process, of course, the content will have to be stolen, because of course Amazon will have locked up willing (and desperate) newspapers into exclusive contracts that prevent anyone from getting the content any other way.
The recording industry created Napster by quashing digital downloads at any price. Television and movie executives likewise created wide-spread movie piracy because they didn't listen to folks who got sick of the endless commercials and silly "Piracy is Theft" ads. Sadly, sadly sadly, Amazon seems to be joining the list of companies so hell-bent on endlessly profiting from the work of others well beyond a reasonable level that theft will prove the only alternative. They are attempting to do what no one has ever been able to do ever before, to create a creative lull buttressed by contract law alone that will feed them profits without effort on their part.
In essence, lulls are vacuums. You know how nature feels about those.