October 2009



By John Birmingham

A visual representation of the world's internet traffic on a single day: 15 January 2005. © The Opte Project.

A short history of the media future

In the year of our Lord 2007, I built a library. Indeed, I built two. One of them, a professional library, was built into an office where I carry out the pleasant business of penning novels, essays and columns. The other was a formal library – nothing more or less.

In the professional library, I can bend over and ponder a brightly coloured tangle of cables and sockets. Some bring the world to my desktop via a high-speed internet connection; others use a local area network to spread that connectivity throughout the house. On the glowing cluster of huge, power-hungry screens that dominate most of the tabletop real estate at one end of my workbench, you may find up to a dozen windows open. Meanwhile, in the media room above, a small tower of web-connected gaming consoles, a dedicated server and a Foxtel iQ box occasionally reach down to share files with the computer on which I’m working.

The formal library, in contrast, has none of this. Occupying the centre of the original house, its one nod to modernity is a rather groovy white lampshade hanging in the centre of the room. The vast and intricate web of optical fibre and wiring, which forms a sort of nervous system for the rest of the house, courses around this one space like water around a rock. Previously, it had been little more than a second lounge room. People tended to pass through the library-to-be on their way somewhere else, somewhere more interesting – like the media room. But the re-appearance of so many old friends – locked away in storage for so long – now displayed as they were meant to be, in a towering wall of hardbacks, paperbacks, quartos and dense, regimented ranks of magazines, somehow re-vivified that previously transitory and redundant space.

Of all the dying forms of modern media, the book is the oldest and, after newspapers, is often regarded as being in the most precarious of states. But there is life in the old forms yet and with that life, real power. The atomisation of all media, thanks to the irreversible shift from the old, hard, analogue means of communication to ephemeral digital versions, is a process only accelerated by the global recession. Much power is at stake, both commercial and cultural, as once-dominant media empires face the threat of annihilation. And since these empires are empires of the mind – having established TV networks, venerable newspapers and publishing houses, less venerable movie studios and totally non-venerable (but very wealthy) recording labels – it is natural that we grasp for metaphor when trying to understand their fate. But whether the appropriate metaphorical image to be applied is the arrival of moveable type – which was truly paradigm-changing – or, say, the emergence of commercial radio – which was not – remains an unsettled question.

The invention of the printing press is often cited, with good cause, as exemplifying the ability of new information technologies not only to tear down and remake existing power structures, but also to change the way human thought is structured. This invention broke the stranglehold of the medieval Church – with its monopoly on the manuscript – over the transmission of information through space and time. It is understandable that anyone whose interests are entwined with the fate of the mass media might be drawn to the apocalyptic attraction of such a comparison. Other appropriate analogies, however, lie closer in time. During the 1920s and 1930s, nearly as much end-of-days hysteria (at least in the established media) attended the rise of broadcast radio as now swirls around issues of piracy, digital-rights management, the parasitism of Google and the collapsing business models of long-established media empires.

As Jack Shafer from the online magazine Slate pointed out in August this year, the battle between radio and newspapers in the decades following the Great War anticipated many of the issues now reaching flashpoint between old and new media operators. Just as a phalanx of newspapermen and their owners have recently taken up sword and shield against news-aggregators like Google and Gawker for stealing their product, newspapers in the 1920s and 1930s were enraged by the “unauthorised use” of their content on air. And just as today’s contentions over IP rights are taking on a distinct air of jihad, the earlier “crusade” against radio:

… often lapsed into full-scale disparagement of the new media. Some print journalists and industry leaders claimed that radio content was inaccurate, skimpy, sensationalist, and trivial and that its practitioners were amateurs. When radio news was accurate, they asserted, it was either a bunch of headlines from a newspaper or a story directly pilfered from one.

Shafer asks drolly, “Does any of this sound familiar?”

It does, but not just because history has come roaring back into the present to repeat itself. The same category of trespasses informed the publishing industry’s recent confrontation with Google over the issue of the search-giant’s plans to publish the text of millions of out-of-print (but not necessarily out-of-copyright) books; the prosecution and jailing of the Pirate Bay administrators in Sweden for enabling copyright violation across a range of media; the cannibalisation of the music industry by sites such as Napster, and its eventual conquest and subjugation by Apple’s iTunes store; and the plans of media megasaurs such as Rupert Murdoch to erect fortress-like ‘pay walls’ around their properties to protect them from poaching by the likes of Google News.

It is not so long ago that the most buzzing of buzzwords surrounding old and new media was ‘convergence’: the idea that all systems of communication were inexorably gathering around a single platform that would ultimately be controlled by a handful of overlords. Time Warner’s merger with AOL and Telstra’s once-mooted takeover of Fairfax were, respectively, a consequence and a fantasy of this imagined convergent future. But only five years later – Telstra cancelled its plans to become a diverse-media company in early 2004 – ‘atomisation’ may be the more appropriate motif.

Fairfax’s share-price collapse is emblematic of a media sector in free fall. For all the public woe of Australia’s media giants, though, they are the very picture of health compared with their peers overseas, where the collapse and disintegration of established media businesses is accelerating. Fairfax’s reported loss of $380 million last financial year – on top of a rolling series of massive redundancies – might seem less than brag-worthy, but the house of Fairfax is cruising in comparison to, say, the New York Times, whose mountain of debt was reduced to junk status last year; or the Tribune Company (publishers of the Chicago Tribune and Los Angeles Times), which has filed for bankruptcy protection in the US. Writing in the Atlantic in January, Michael Hirschorn quoted the former New York Times executive editor Abe Rosenthal saying that he couldn’t imagine a world without the Times. Perhaps, Hirschorn quipped somewhat grimly, we should start. At that stage, there was a small but very real possibility that the Times could cease to exist as early as May.

The media world is already doing without tens of thousands of reporters and support staff who have lost their jobs in the last 12 months. Well, they have not ‘lost’ their jobs, for that implies the jobs still exist, waiting to be filled, perhaps, by leaner, hungrier, more capable newsmen and women. Rather, the jobs – and sometimes the papers, magazines, TV and radio shows that provided them – have simply vanished. In the US alone, 26,000 of them in the past two years, according to industry death-watch blog Paper Cuts. At home, News Corp has cut more than a hundred journalists from its staff lists so far this year. Fairfax’s last big cull, in 2008, reduced its staff by 550, of whom a third were reporters. ACP Magazines’ new venture-capital owners pulled the plug on more than a century of publishing history when they shut down the Bulletin. The Nine Network, which for decades made a fortune for the Packer family off the back of a strong nightly lead-in from its news department, has been shedding news jobs for several years, beginning with 100 jobs in 2006. The network has also starved masthead shows, such as Sunday, to death and even the group’s new-media success story, ninemsn.com, shrank its work-force by 10% this year, following redundancies last year.

There is more than a whiff of panic in the air. Murdoch acknowledged as much in his Boyer lectures of late 2008, in which he flagged the future of newspapers as “a subject that has a relevance far beyond the feverish, sometimes insecure collection of egos and energy that is the journalistic profession”. Much of the fear he put down to “misguided cynics” within the industry, and self-pity, which “is never pretty”. His Rupeness even managed to shrug off the despair of the then-cataclysmic stock market and banking collapses, declaring newspapers to have a great future because they are a source the reader can trust. They are a brand the reader can trust. “It's true,” said Murdoch, “that in the coming decades, the printed versions of some newspapers will lose circulation. But if papers provide readers with news they can trust, we’ll see gains in circulation – on our web pages, through our RSS feeds, in emails delivering customised news and advertising, to mobile phones.”

He graciously did not deign to mention the brand for which he is perhaps most famous in the US – Fox News – which is not only distrusted by millions of Americans, but actively loathed for its unhinged demagoguery. It is instructive to examine Murdoch’s hydra-headed business operations because, of the media dinosaurs, he is among the best placed to survive. Surveying his kingdom, he looks over traditional businesses, such as newspapers, publishing companies and TV networks, while also commanding a position on the new frontier with his acquisition in 2005 of MySpace and computer-game portal IGN. The former was the more significant purchase, described, in an unusually fawning profile of Murdoch by Wired magazine, as “the ultimate Web-services mashup … a free-for-all of blogging, instant messaging, phonecam uploads, MP3s, video clips, and anything new that came along, all stewing in a broth of hot bands, hit movies, and teenage lovelies”. In other words, a perfect entrée to the web for the owner of some of the world’s premium low-brow media. But how was he going to make it pay? MySpace had no revenue model. How would he ‘monetise a freebie’, to borrow from the lexicon of the new world he had entered? “We’ll figure it out,” he told Wired’s Spencer Reiss, flashing what the writer described as a cat-that-ate-the-canary grin. For Murdoch, in 2005, “The Internet is media’s golden age.”

By 2009, the golden age was over and Murdoch was stringing razor wire over the rusted barricades he had hastily erected around his besieged holdings. In the evolutionary hothouse that is the internet, MySpace had been left behind by Facebook, which was, once upon a time, what Twitter is now: the hottest social networking site in the world (or “notworking site”, to steal a cruel but telling neologism from Urban Dictionary). “Once upon a time” in this context means five minutes ago. For Murdoch, for News Corp and, apparently, for every other multi-billion-dollar media house, there was simply no time to adjust. The competitors kept appearing from nowhere, in what the same Wired article called “a Cambrian explosion of digitally empowered life-forms”. And that was all the way back in 2006, in the early days of Amazon, and before Facebook, Twitter, YouTube, Google Maps, Skype, Wikipedia and the iTunes and App stores became part of everyday life.

The global recession did not precipitate the existential challenge News Corp and its peers now face, but it did intensify it. Advertising revenue, which had already been deserting the established media for Google and Yahoo, collapsed in step with the world economy. The golden age rhetoric is no longer heard and News Corp now leads the charge towards revenue protection and ‘pay walls’. In early August, Murdoch announced that online news businesses would soon be charging for access and – what’s more – he expected his competitors to follow suit. “Quality journalism is not cheap, and an industry that gives away its content is simply cannibalising its ability to produce good reporting,” he said. “The digital revolution has opened many new and inexpensive distribution channels but it has not made content free. We intend to charge for all our news websites … I believe that if we are successful, we will be followed by other media.”

He was correct in that, at least. A fortnight after Murdoch made his prediction, Fairfax Media’s managing director, Brian McCarthy, announced that he would be “happy to talk” to News Corp about plans to charge for online content. This prompted a swift rebuke from the chairman of the ACCC, Graeme Samuel, about the dangers of collusion: “I would think it would be best for them to talk to their lawyers and to the ACCC before they talk to each other.” Online industry bulletin B&T Today reported that in the US, where looser market rules apply, News Corp has already met with rival publishers “including Hearst Corporation, the New York Times Company and the Tribune Company, to discuss a shared online payment model”.

The problem for Murdoch, indeed for all the long-time media owners, is that they are trapped between the demands of the various regulators that they not engage in anti-competitive behaviour and the brute reality of a market disappearing beneath their feet as the tide rushes out on their old business model. They need to talk to each other because overturning the entrenched information-entitlement culture associated with the net is an epic undertaking that can only work if those involved do collude against the market. In an environment where people are offered the choice of similar products – one free and one not – most will choose the freebie, leaving anyone who goes it alone with a paid model to manage, somehow, the instant mass desertion of their audience.

For all of Murdoch’s admirable faith in his brand and the trust it engenders among consumers, there is no evidence they are willing to pay him for his wares, unless those wares happen to be rare and valuable – like the market data and intelligence provided by the Wall Street Journal. The Journal offers information that can be monetised (that word again). But does the Courier-Mail, with, for example, its 26 August report on Premier Bligh’s unveiling of the latest ad campaign by Queensland Tourism featuring reworked lyrics to a Monkees tune? Possibly not.

And, of course, to clear a field in which he and his commercial rivals might compete, Murdoch would need to address the problem of state-run – but highly regarded and free-to-view – news providers, such as the BBC and ABC. Their very existence, once trifling if not irrelevant, now looms as a mortal threat. Hence the recent attack on the BBC by James Murdoch, Rupert’s senior heir and News Corp’s chairman and chief executive for Europe and Asia. “Dumping free, state-sponsored news on the market makes it incredibly difficult for journalism to flourish on the internet,” he complained, while delivering the James MacTaggart Memorial Lecture at the Edinburgh Television Festival. “We seem to have decided as a society to let independence and plurality wither. To let the BBC throttle the news market and then get bigger to compensate.”

However, even with dreadfully unfair competition from all-powerful Orwellian state bodies like the ‘Beeb’, the quest for sustainable online revenue is not entirely quixotic. As Mark Cuban, the US billionaire-owner of HDNet, advised Murdoch in his personal blog on 8 August, “You can sell content on the internet. People pay for content on and off the internet every second of every day. It’s easy to do. If you do it right.” Recommending first that the mogul block aggregators from accessing his news sites because “the value of the traffic sent by most sites is minimal at best”, Cuban then advised him to forget about selling his product “ala carte” [sic] because that method only works for information with real value.

The Wall Street Journal can sell subscriptions because if a businessperson or trader doesn’t have the information the minute it’s published, they could be in serious financial trouble. The WSJ moves markets. You can charge for it. Page 6 doesn’t move markets. Fox Sports doesn’t move markets. People won’t pay for it by story. They won’t pay for a general interest or newspaper, TV or sports website by the day, week or month unless they absolutely have to know what you publish for business reasons. There aren’t enough of those people around to pay the bills per site.

Instead, advises Cuban, Murdoch needs to aggregate his strongest products, drawing on the vast resources of his empire, to package tailored media to specific demographics. As an example, he cites an imagined “Newsjunkies Subscription” that includes access to every News Corp news site from around the world (excluding the Wall Street Journal), a choice of any two books from HarperCollins, a subscription to the Weekly Standard and a $99 credit at The Fox Store from which subscribers could pick classic or new-to-DVD releases. Over $300 value for $9.95 per month over 15 months.

By burying the consumer in a flood of content, Cuban establishes an illusory ‘perceived value’ far in excess of the actual price being asked and the cost of providing the digital data. Were it to work, and decades of marketing experience suggests it could, Murdoch – or any other mogul with the resources to offer such deals – might suddenly find himself on the happy side of the internet’s entitlement equation. And in the same way that megafauna can come to dominate resource-scarce ecologies – the resource in this case being revenue – the huge cross-media conglomerates which seem to face looming extinction may yet grow larger and more powerful as their smaller competitors collapse or are consumed.

Does this presage a lessening of precious diversity in the media ecosphere? Not necessarily. There will almost certainly be fewer hard-copy newspapers and magazines. Likewise, free-to-air television has yet to demonstrate it can survive the loss of its programming control to digital delivery systems, both legitimate, such as iTunes, and illegal, such as Pirate Bay. The phrase ‘own worst enemy’ keeps echoing through my mind when I think of the Nine Network’s inability to air a breakout success like the first series of Underbelly with even a modicum of predictability: the huge DVD sales of Underbelly were driven in large part by consumers who tired of Nine’s arbitrary scheduling of the show. But a series such as Masterchef demonstrates that network TV can still aggregate true mass markets on a scale far beyond those of competing media, while subscription channels such as HBO have proven that niche marketing of high-concept TV to a paying audience is both possible and profitable.

The iTunes model of direct distribution to millions of home-based servers might mean a slow death for network TV, but not for its product. The determinedly unhip and dreadfully worthy US-based radio service National Public Radio has shown a sure sense of the liberating power of turning program-director duties over to listeners, recently launching a tool that allows its growing audience to mix their own podcasts of NPR shows. Rather than approaching social media tools as little more than free advertising gimmicks, NPR has encouraged its 26 million listeners to engage with its service via blogs, Facebook and Twitter. In a famous example, it used Twitter to ask listeners to fact-check the US vice-presidential debates, crowd-sourcing the sort of analysis that was once the sole preserve of established insiders.

The mainstream media’s dismissal of citizen journalism and the blogosphere as little more than 80 million cranks who can’t be bothered getting out of their pyjamas before unleashing their rants on a largely uncaring internet may have some validity – 80 million might even be too conservative a figure – but it ignores the incredibly rich and vibrant ecology of alternative media sources that has rapidly evolved online. As Michael Massing wrote in the New York Review of Books on 13 August, “The practice of journalism, far from being leached by the Web, is being reinvented there, with a variety of fascinating experiments in the gathering, presentation, and delivery of news.” Massing cited ProPublica, an online investigative unit backed by generous philanthropic grants, which “has produced exposés on everything from the involvement of doctors in torture to the contamination of drinking water by gas drilling”. He also discussed Informed Comment, a blog by Juan Cole, scholar of the Middle East at the University of Michigan, which “has over the years offered a more acute analysis of developments inside Iraq – and now Iran – than most of the reporters stationed in those countries”.

For all that the mainstream media can point to oceans of banality, prejudice and outright craziness in the new media, they should not ignore just how much quality reporting and analysis is now available beyond their limited fiefdom; indeed, how much of it is undeniably superior to their own product. Stratfor provides much wider and deeper coverage of international conflicts than any mainstream media outlet. Hundreds of blogs, such as The Oil Drum and R-Squared, routinely cover energy politics and issues in vastly greater detail than is available from News Corp or Fairfax. Meanwhile, the most interesting writing about important issues of fluff – such as music, fashion, food and gossip – long ago ceased to be the preserve of the old media houses, with former insiders often moving outside to ply their trade successfully as freelancers. The hugely popular blog of former women’s-mag-wonderbabe Mia Freedman is a striking example of how a former in-house practitioner can find both liberation and success by walking away from the crumbling centre of power.

Will the centre hold? Must things fall apart because of what Chris Warren from the Media Entertainment and Arts Alliance calls “disruptive technologies”? The fog of uncertainty, which so quickly transformed Rupert Murdoch’s half-billion dollar purchase of MySpace from a strategic masterstroke into an expensive regret, can obscure positive developments as easily as negative ones. Amazon’s electronic reader, the Kindle, which excited primal fears and thrills in equal measure among publishers, may well be dead technology within six months. If Apple releases its long-awaited tablet PC, then Amazon’s closed and clunky e-book system (and its ham-fisted attempt to establish the company as a monopoly provider) will end in abject failure. The modest e-book functions of the iPhone already far exceed those of the Kindle. A larger, more luxurious and powerful device like a tablet PC may provide mainstream publishers with the platform they need to convince paying customers that reading an onscreen copy of Esquire, or the Age, or The History of the Decline and Fall of the Roman Empire is just as pleasing and incalculably more convenient than lugging around an analogue copy. More importantly, it may convince them that paying for the experience is worth it, especially if a large discount-for-digital is factored into the cover price.

Does this mean the oldest media repository of all – the library – is on the way out, destined for the rubbish heap of history, just as nearly every Kindle in the world is destined for landfill sometime in the next decade? The experience of previous media revolutions suggests not. TV did not destroy radio or cinema. It changed them. YouTube has not killed off the Nine Network, but BitTorrent will change it.

The end result of the upheaval will, most likely, further entrench the divide between rich and poor. Those with the education, the capital and the desire to indulge in the superior aesthetic pleasures of real books, professional journalism and expensive high-quality TV will pay for it, though the product they buy may not always resemble the media products we know today. As long as the potential to aggregate a mass market exists, someone will get rich doing so; it may not be the next generation of Clan Murdoch, but there is no reason that it cannot be.

What has gone forever is the mogul’s domineering control of the means of communication and a power that echoed, however dimly, that of the medieval Church before Gutenberg printed his first Bible.

John Birmingham

John Birmingham is an author, a columnist and a journalist. His books include He Died With a Felafel in His Hand and Leviathan: The Unauthorised Biography of Sydney.


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