A Case for a “King of News”?

Capable of seeing all sides of an argument…

For many years now, I have been a resident of two countries, the USA and the UK.  That ‘duality’ has taught me to look at the world from several perspectives at the same time. This is a story about newspapers and TV news  in America, but it has its roots in English history. Stick with it, it’s interesting….

As an American, there is much to admire in England and in the English way of life, but for a long time I could never understand the British respect for the Monarchy.  The ‘House of Windsor’ was to me an anachronism.  Here were inept and painfully average people elevated to the height of power.  What was more irking was that they were supported by tax money.  “Off with their heads!”

Yet Republicanism has had little traction in Britain, and everyone supports the Monarchy.  It’s an institution with very very deep emotional roots.

I did not really understand why until I read Winston Churchill’s History of the English Speaking Peoples.

My new understanding of English History has also given me a new view of journalism in the United States.

Charles I ruled England during the time of the Civil War (the British one, not the American one), and was overthrown and beheaded in 1649.

The Monarchy was then replaced by Republican rule under Cromwell who ruled under the title of Lord Protector. It was a popular revolution and it was England’s first and only experiment as a Republic.  A short 12 years later, the Monarchy of Charles II was restored to vast popular acclaim across the length and breadth of the land.

What happened? And what does this have to do with Journalism in America?

The rule of Cromwell was a nightmare for pretty much everyone in England.  Unbound by the restraints of Nobless Oblige, Cromwell and his followers became the Taliban of England. There were religious trials, there were religious police. It was a holy terror, in every sense of the word.

The English soon came to realize the value of a countervailing force in the institution of a Monarchy.  While Parliament and democracy might well reflect the momentay passions of the population and the ups and downs of the economy or foreign fortune or failure, the Monarchy was able to stand a bit aloof and have a far longer and more stable perspective.  Britain needed a Monarch, in a way, to allow the Parliament to function far more effectively.  It was a pillar of stability. Alone it was unreasonable and could be dangerous. But in concert with an empassioned Parliament, it cast just the right balance. Hence, the experience of the Cromwellian Republic forever cast in the British temperment a healthy respect for the Institution of the Monarchy.

Clever.

Now we come to journalism in the United States.

Our nation, perhaps unlike any nation that has ever existed before, is as much run, defacto, by the Media as it is by our elected legislators.  It might not be too unfair to say that the position of the media in fact has vast sway over the kind of government we get, our perception of foreign policy, domestic policy, the economy and so on.  The very foundation of our goverment is in fact predicated on the notion of a well informed electorate; otherwise what is the point of a voting democracy? (note: First Amendment).

But when the voice of the media and thus of public discourse and public information is also married to the vicissituedes solely of the marketplace, does this place our democracy in danger?

We may, in the next few years, see the very disappearance of newspapers from many American cities and towns.  The economics of the marketplace will simply no longer be able to support them. Television news may follow suit.  There may be a new incarnation on the web… or there may not be.  This remains to be seen.

By the same token, that which does make air, or make print, will increasingly be driven by baseline market demand.  The cushion that once existed for newspapers, in the form of classifieds, car ads, house ads, want ads and so on has now been stripped away by the web. It is a naked news and nothing less.

At a conference I attended in Bristol, England last  month, Paul Dacre, Editor of The Daily Mail, a very popular tabloid made a strong case for ‘shock news’. It is, he said, the only way to sell papers.  Fox News in the US is no different. This is a business.

But it is also a business that is more than a business. It carries with it the concept of ‘the public good’ and ‘an informed electorate’.

There was a time when that responsibility rested firmly, (if tenderly) in the hands of a few families, the Sulzbergers, the Grahams, Bill Paley and David Sarnoff.  They understood their responsibility to balance businesss with public service.

Those days are either over or rapidly drawing to a close.

And what will we be left with?  A naked market driven information place…. The 21st Century equivalent of Cromwell’s Republic, but with ROI replace le roi, so to speak.

This is not healthy. This is not good for America.

Thus, perhaps we should start to think of creating a kind of separate and non-market driven countervailing force in the world of journalism.  One that exists not to replace the Fox News or Today Show of the world, but to provide a stable pillar of quality journalism. A benchmark. An alternative that is not driven by ratings or the passions of the moment.

It is true we have both NPR and PBS, but both are woefully underfunded, and in the case of PBS, so badly constructed from its birth as to be almost stillborn.

Perhaps what we really need in this country is a kind of BBC; free of ratings and a haven for the best journalists in the nation (as Harvard tenure, for example… ), where they can work unthreatened by layoffs or cutbacks.  A place where television, newspaper and online journalism might flourish at its best; and provide a ‘safe haven’ for the information we so desperately  need to function effectively.

It would cost us, but far far less than we spend on so many other goverment ‘programs’ that deliver so far less.

It might be the best investment we could make with a small percentage of our tax dollars. Something that would return a thousand fold.

You might, for the moment, think that you can depend upon The New York Times. But in this world, there is no guarantee that the vagaries of the marketplace might not place that newspaper ‘on the block’, the same place Charles I found himself 360 years ago, this month.

Where Are Your Priorities?

1959 Caddy. But does democracy hinge on this?

Washington, it seems, is not prepared to let the auto industry and Detroit go down the tubes.

The bail out is going to happen, even if the White House has to fund it itself from the $700 billion rescue fund.

While cars are nice, and everyone understands the impact of Ford, GM and Chrysler going Chapter 11, one must wonder about the impact of losing The New York Times, The Chicago Tribune, The Baltimore Sun and The LA Times… not to mention a few others.

While Senators and Congressmen fall all over themselves to bail out the failed American car industry, not one person raises a single voice to bail out the failing American newspaper business.

Strange culture we have.

The newspaper business is the only industry enshrined in the US Consitution. The First Amendment guaranteed the right to a free press.  Perhaps, had the US Contitution been written in the 1950s, it might have guaranteed every citizen the right to cheap and dependable transportation – but it does not.

A free press, as the Founding Fathers made clear, was the cornerstone of a democratic society.

As Thomas Jefferson said, “Our liberty depends on the freedom of the press, and that cannot be limited without being lost”

Jefferson did not, as far as we know, say anything about our liberty being dependent upon a reasonably priced automobile that is manufactured in the United States.

Automobiles are still going to be made.

They are going to come from Japan and Germany.

No one will go wthout a car who wants one. In fact, you will be able to get a good car for less money from Japan, just as you do now. Who can tell? Lexus? Why not?

But let the newspapers die and you will be hard pressed to replace The New York Times with the Asahi Shinbum.

It says a great deal about our society, and none of it good by the way, that we are willing to countenance and watch as detached observers, the death of the American newspaper industry, yet we are seemingly unable to do the same with cars.

I say, the time has come for a bailout for the American newspaper industry.

A few billion dollars to cushion the blow as they make the difficult transition from print to online only.

Help keep the journalists, with their many years of experience, in place.  Believe me, a great reporter is a whole lot harder to replace than a line worker in Detroit.  Once you lose them, they are gone forever.

Let the publishers of The New York Times, The Chicago Tribune, The LA Times go down to DC for Senate Hearings. They won’t take private jets – they don’t have any.  Let them explain to the Senate and to the American people just how important quality journalism is to a functioning democracy.

Let’s set up a loan fund for the papers, just like we’re going to do for Detroit.

You are on a sinking ship and you can only rescue one: A Chevy Aveo or The New York Times, which do you pick?

Hello?

Mr. Watson, come here… I need you…

Sometimes when new technologies come along, they overturn the world of conventional thinking – particularly when it comes to valuation.

Take a look at the telephone.

Before Alexander Graham Bell invented the telephone, value was directly married to rarity.  The more rare an object, the more it was worth.  Gold had great value because there was not a lot of it. Make gold as common as lead, and its value would plummet.  So people horded gold and nations went to war over gold. Only kings and very rich people had gold. That was how they liked it.  Open the treasury in the middle of the night and luxuriate in your wealth.

Comes the telephone.

What is the value of a telephone if only one person has it?

Nothing.

Who are you going to call?

If only a few kings and a few rich people have phones, the value increases, but only marginally. Now you can call a few friends,but that’s about it.

However, if everyone has a phone, right down to the local plumber, suddenly a phone is so valuable that you can not afford not to have one.

Now that’s value, but an inverse value from that which had been true through almost all of human experience. It is no longer rarity that gives value, but rather commonality.

What does this have to do with the current crisis in newspapers?

A lot, I think.

Because the crisis we are facing in newspapers and journalism in general is also a moment in which conventional thinking about valuation is being turned on its head, although we are slow to see that , as usual.

Up until now, we have thought that the primary asset of a paper or a TV station was, in fact, the station or the newspaper itself.  It was The New York Times that had the value, or CBS News. The rest, the people who worked there, were in a sense fungible.

In other words, the institution lived on and on, and readers or viewers were attracted to the institution, while the people who created the content for the institution were fundamentally replaceable or interchangeable.

This we sometimes referred to as ‘branding’.

This remained true so long as the technology of the day meant that there were a limited number of pipelines or platforms for delivery of information or content (and the advertising that went along with them).  In the words of AJ Liebling “freedom of the press is limited to those who own one”.

Because it was ridiculously expensive to even entertain the idea of having your own press.  The very cost of a press and the attendant mechanisms of distribution were a barrier to entry for competitors.  Thus, the perceived value of an institution like The New York Times was vested in that barrier to entry.  The reporters might go from paper to paper, from The Times to The Herald to The Daily News, but the paper, the institution would survive.

The reporters were marginal.

The same was true for television.

When it surfaced in the 1950s, the signal was pushed through the air.  There was limited space on the electromagnetic spectrum, so the FCC licensed the limited space to three networks, ABC, NBC and CBS and they held a virtual monopoly over access to people’s homes.

Shows might come and go, but the platform, the pipeline was in the frequency (and in all the expensive investment in infrastructure to push pictures and sound into the air).  The value was in the network, not in the content, per se.  The content was simply the filler, which was changeable depending upon taste.

When cable arrived, it as the same model, simply fractionalized over more players.

The web, however, like the invention of the telephone, changed everything.

At first, newspapers and later television stations saw the web as yet another platform for distribution – a kind of super cable, that would carry The New York Times or CBS shows into everyone’s home.

But that was not the case.

What the web did was to rewrite the fundamentals of valuation.

And like medieval kings, it was and is hard for those who once had the most precious things in the world to grasp that the very definition of value has now changed forever.

What the web did was to take away the barriers to entry. To make the ‘gold’  of the NY Times or NBC’s FCC license as common as lead.

Now, anyone, any time, and for no cost, could get into 2 billion homes. For free.

So where does value suddenly reside?

In the content.

People online are seeking content.

Quality content.

And they do not care where it resides.

iTunes is a classic indicator of what is coming.

In webworld, music is often a harbinger of where the future lies.

When I go to iTunes to download a song, I don’t care if the recording artist is signed with Arista or RCA or Decca or whomever. It does not matter a bit to me.  It is the music I am after.  The ‘studio’ goes away. It is the content that is king.

Each day I go to NYTimes.com to read the paper, but in truth, if Frank Rich, Maureen Dowd, Tom Friedman and a handfull of others were to suddenly break away from the paper and set up their own website (and like Drudge, they might aggregate headlines), I would go there instead.

Now, the NY Times might be in financial trouble, and perhaps their website does not generate enough revenue to support their building, the presses, their trucks, their vast management and HR teams and so on. But my guess is that online revenues from The New New York Times  (aka Rich, Dowd, Friedman and Co.) would more than satisfy the writers.

That’s all that counts.

The content.

So it strikes me as more than a bit odd that when budget cuts come, which is inevitable, the first places to be cut are those who actually create the content.

It does not make sense.

It is like eating the seed corn.

Sell the building.

Fire the management.

Close down HR.

Do anything, but save and nurture the talent.

Or maybe the talent will simply leave and set up their own online ‘paper’. I mean, why do they really need management anyway?

A House of Cards

The answer, my friend, is blowing in the wind…

Drudgereport.com, one of the top websites in the country is an aggregator of other people’s work.

My friend Jeff Jarvis calls on websites to be ‘curators’.

All of this is great…. but…

But at the end of the day, someone has to make the original content and be paid for it.

Until now, that someone has been newspapers.

But I think we are looking at the end of newspapers, and that is a sobering moment for all of is.

Again, I am going to pimp for Jay Yarrow’s outstanding analysis in the BER, which is, I learn to my amazement, the Business and Economic Reporting program for NYU! So congrats Jay Rosen for doing such an incredible job over there.

The entire newspaper business, now no longer a surprise to anyone, is on life support.

Henry Blodget at Silicon Alley Insider recently did an analysis of The New York Times and found that the company has a negative net worth!

They have $46 million in cash and are owed $366 million from advertisers, giving them $412 million. They owe $398 million in short-term debt, which comes due May 2009, in addition to a projected $470 million in operational costs like salaries and newsprint, giving them a total of $865 million in near-term obligations — $453 more than they have.

This is not a problem they are going to fix by mortgaging their new building.

And this collapse is not limited to The NY Times.  The bankruptcy of the entire Tribune group, which include The LA Times, The Baltimore Sun, the Chicago Tribune is almost incomprehensible, yet true.

The newspaper business is not what it was.  It is a mess.

The Washington Post is actually supported by that company’s educational division (including the Stanley Kaplan SAT review course).  The company’s annual report last year stated that the company took in $2.93 billion in revenue (of a total 4.18 billion) from the educational branch. The paper delivered only $889 million. The paper’s revenue declined 7% while the educational division grew 13%.  Without the educational division, I think it is fair to say that the paper would be in the same straits as The NY Times is now.

So the conventional newspaper business model is in deep deep trouble. And if the papers go belly up, who is going to provide the content for Mr. Drudge and countless others to curate?

That’s a good question.

Is news of any value?

I think so.

But perhaps not on paper and ink.

Michael Bloomberg made a fortune with news, but by not putting it on paper and ink. He could have. But he opted instead to lease dedicated terminals that delivered the same information that a paper (or a website!!) might have.  Bloomberg understood the value of the news information and a way to package it very very profitably.

In yesterday’s blog, Paul commented:

Business models are thin on the ground. Sure, loads of newpapers are crossing to the internet – it’s a cheap transition to make – but how many are making money from it? Name them.

Well, here’s one.  The Wall Street Journal. Since taking over the paper, Rupert Murdoch has started charging for the online service, and now you have to pay $104 a year for the full online service.  In the past year, Murdoch has earned $100 million in online ad revenue and another $100 million in subscription fees.  That’s almost as much as The New York Times is going to get for mortgaging its building.

If You Bild It….. will they come?

Email this morning from Pat Younge, President of the Travel Channel.*

He sends me a link from The Guardian, that BILD, the German newspaper has partnered with a German supermarket to sell small cameras and field an army of citizen journalists to feed the paper’s website.

Sounds good to me, but I think they need a training course!

Germany’s bestselling newspaper is looking to expand without the expense of actually hiring new reporters.

Bild has joined up with discount supermarket chain Lidl to sell a basic digital camera to a legion of citizen journalists, who the tabloid hopes will contribute images to its coverage.

“We can’t cover everything,” said Michael Paustian, a Bild managing editor. “We think it is an advance for journalism.”

The pocket-sized camera has 2GB of memory, can shoot still pictures and video, and costs €69.99 (£60). It comes with software and a USB port that allows “reader-reporters” to upload content directly to editors who will be assigned to review it for publication.

Bild spokesman Tobias Fröhlich said the goal was to encourage camera owners to seek the widest exposure for their work. “It’s not about exclusivity,” he said.

The move fits in with a broader trend for traditional media to turn their increasingly interactive readers into news providers.

Vancouver-based NowPublic.com gathers photographs, video clips and news tips from the public and distributes them to news organisations. The trend is likely to continue as traditional news providers scramble to match the migration of readers and advertisers to the internet.

Bild, known for breaking major political stories as well as front-page splashes on zoo animals and celebrities, will use the new cameras to streamline an existing scheme that brings in thousands of photos each day by email and text message, Fröhlich said. The paper has published 9,000 of those images since 2006.

He said Bild may pay for the best ones it uses or establish a contest for the best content submitted each week; details would be worked out after gauging demand for the cameras that go on sale today.

Some worry that Bild’s new media experiment will lower standards and interfere with professional reporting.

“It poses a threat to quality journalism, the more images from non-professionals that are pushed on to the market even though professional images are available,” said Eva Werner, a spokeswoman for the German Journalists’ Association

But Paustian thought the opposite was true. “We’re not YouTube,” he said. “Every contribution will be viewed, reviewed and journalistically evaluated.”

*and this just in from NZ correspondent Alan Morrison

The Repository of All Human Knowledge

what would you like to know….

OK

It’s one of those late night Science Fiction movies in which a time traveller goes into the future and discovers that the whole world has become a land in which learning and reading and knowledge are forgotten.

Then, our hero discovers a secret cult, buried far away, which has committed to memory all of human knowledge and struggles to keep the flame burning.

You have seen this plot a thousand times, in a thousand different iterations, from Matrix to The Time Machine or Fahrenheit 451.

It resonates so well with us because it is based on history experience.  During the Dark Ages, the vast reservoir of human knowledge was indeed reduced to a few monestaries across Europe where monks kept the flame of learning and reading and writing alive while the rest of the world was plunged into darkness and ignorance.

Today, these nodes of knowledge are not monestaries, but newspaper newsrooms.

There, compressed within a few thousand square feet you have the combined residual knowledge of an entire community. People who have, quite literally, spent their lives learning about and studying the arcania of the city council meetings, the local schools, the local public services, the local water works, the bond issues, even the local restaurants or high school football teams.  It’s pretty amazing when you think about it, and a resource of unimaginable value.

Unimaginable value if you know how to mine it.

Taking their knowledge and printing it on paper with ink is probably not the best way to exploit this asset in a digital age.

We are facing a curious reversal of valuations, and it is a relatively new phenomenon.

Not so long ago, the machinery to print and distribute this information was the rare and expensive part of the news business.  AJ Liebling said, “freedom of the press is guaranteed only to those who own one”.

Liebling, who wrote for The New Yorker, and who died in 1963 lived in an era in which presses were notoriously expensive.  The Sulzbergers could afford one. The rest of us could not. And this had been the case since Gutenberg first put paper to inked letters five hundred years ago.

Ironically, at the same time, information was considered to have marginal value, at best.

The basis of the newspaper’s economy was founded in the value of the presses.  Again, Leibling:

“People everywhere confuse what they read in newspapers with news.”

Now we are suddenly in an era in which anyone can publish globally any time (like this blog), for free.

The value of the press is next to nothing. But the value of the information?  Priceless. What, after all, is Google, but a residual font of information?  Information that people want.

The newspaper newsroom is a goldmine of local information, and it is information that people want and are willing to pay for.  But it has to be organized.  The way it is organized now, on paper and ink, and sold once a day on the streetcorner does not work. It is archaic in a web world.  But that does not mean that the information that is there, and the knowledge that is there has no value.

On the contrary.

It is not the staff in the newsroom that needs to be chopped away.

It is the press and the paper.

Hello Bolly

She’s the little old lady from Utta Pradesh now…

James MacPherson is the publisher of an online website called Pasadena Now.

Pasadenanow.com is causing a lot of buzz in the journalism community. Not because it’s hyperlocal news. that’s old stuff.  But because MacPherson has announced he is going to outsource the reporting jobs to India.

India.

MacPherson believes that since City Council meetings are streamed on the web already, there is no need for a reporter’s physical presence in the room, and the goings on can be covered just as easily from Bangalore.

Well, maybe

His move has caused such as stir that New York Times columnist Maureen Dowd has already picked up on the story.

MacPherson’s idea may or may not work, but it gave me a moment to think about the whole notion of outsourcing video production in general.

I am on the board of a wonderful organization called Video Volunteers.

It was founded a few years ago by a graduate of one of my seminars, Jessica Mayberry, and today it is a world leader in empowering people in India with video cameras, laptop edits and the skill sets to tell their own stories in video.

Some of our trainees have now been making video for several years, and are quite good at it. So good, in fact that I think perhaps it is time for them to break out onto the world stage.

It is fine to give out video cameras and teach people to ‘tell their own stories’, but after a while, perhaps it is time for them to start and tell other people’s stories as well. After all, that’s what happens when a crew from Atlanta or New York flies half way around the world to shoot stories in Thailand or Rwanda for ITN or CBS or the BBC.

Well, maybe it is time for our Indian camera crews to get into that business as well.

Of course, in India the median income is an astonishing $115 a month.  That’s one hundred fifteen dollars a month (just in case you thought that was a typo).  So my guess is that our Indian camera crews will be pretty competitive… and quite happy to work long and hard hours and produce a superior product.

At those rates it might just be worth it to fly the crews into the US for work here, in fact.

Bollywood indeed.

The Eyes of Texas Are Upon You

First, many thanks to Buck over at b-roll.net. for finding this.  Nice research!

Austin likes to think of itself as ‘different’ from the rest of Texas.

And now, The Austin American-Statesman takes a giant step in moving from a paper to a digital information center.   They not only reprint articles from The New York Times and The Washington Post on a regular basis (hey, this is TEXAS!), but their websites, both the paper’s and their entertainment website, Austin360 are clean and heavy on blogging, video and citizen journalism.

As for their point about local TV news vs. newspapers…..

In my experience most local TV newsrooms start their day by scanning the paper for stories to cover.  I have never seen a newspaper scan local TV news for what to cover that day.

The Man Who Came to Breakfast

Notice the marmite……

Jeff Jarvis dropped over for breakfast yesterday.

Somewhere between Dubai and Davos, he carved out an hour for a few slices of Sullivan Street Bakery sesame bread and white fish salad.

He came over to talk about DNA2009.

Like Jeff, I attend many conferences. (I can’t turn down an audience).  But one of the greatest flaws I see at a lot of conferences are that once you assemble the great and the good, no one really knows what to do with them.  There is the ‘let’s give a speech’ route. You sit, a famous person we have paid 100k will recite a talk that someone else has written for them, and then we’ll have coffee.  Not great.

Then there is the ‘let’s pretend we’re in a TV studio’ route.  A well-known TV presenter who has little or no knowlege of the topic at hand will carry out a mock Dick Cavett (for those old enough) type TV interview, – lights, swivel chairs, set – all that is lacking is the TV cameras..and the broadcast.  The audience sits and watches this reinactment of a 1975 TV show and then thinks about what is wrong with TV…

Finally there is the much lamented Panel Discussion.  Five or six luminaires on an industry are invited to offer their opinions on a few topics while 300 people watch them try and explain very complex issues in 2 minute soundbites.  Also shows what is wrong with TV.

Well, it’s not easy.

The thing I like about Jarvis is he thinks out of the box all the time.  This goes for his new book, What Would Google Do, which I shamelessly pimp here (my pre-order is already in); but also for conferences.

At his last conference at CUNY, he tried quite hard to break the mold.  Lightning round, solve the problem, live webcasting with comments – he tried to get everyone involved.

So we’ve invited him to DNA (March 4-5, Brussels), where we’re going to try some new ideas on group involvement as opposed to sit and watch this stuff. I think it will make a big difference.

And, using my new flip cam (Jarvis was quick to note that he now has the HD version… so it’s back to B&H Photo as soon as I am done here), we got him to do a quick promo for us. (Well, it’s the least you can expect after bagels and ….. marmite?)

Gresham’s Law

World’s first media critic…..

Sir Thomas Gresham was an English merchant who worked for both King Edward VI and Queen Elizabeth I (1519-1579)

Gresham was also the world’s first media critic, although he didn’t know it at the time.

Gresham is best known today among Economics 101 students for what is commonly called ‘Gresham’s Law’. (Although Gresham never formally wrote anything out), as a merchant he quickly came to understand that ‘bad money drives out good’ which is the basis of ‘Gresham’s law.

What that means (as a grad in good standing of Econ 101, is that in any system that has two currencies, the debased (or more worthless)) currency will drive out the more valuable currency. People prefer to keep the currency they perceive as more valuable and hence will more quickly trade the currency they view as worth less, relatively.

The most recent example of this, at least when it comes to money, is our own dollar.

Until 1934, a US dollar was worth 1.5048 grams of gold, and could freely be exchanged for that at any time.  Pretty remarkable when you think about it.  Dollars and gold and gold coins were freely exchanged and really interchangeable.  When they said ‘sound as a dollar’, it meant something.  (The UK Pound, interestingly, is called a pound because 1£ once was equally exchangeable for a pound of silver. That’s why it was called Pound Sterling.. and still is).

In any event, in 1934, Franklin Roosevelt, by executive order declared that the dollar henceforth would be redeemable for .850 grams of gold, effectively debasing the dollar in half (or almost so) immediately. The reaction? Gold disapperaed from common exchange almost immediately. People naturally began to horde gold and trade more paper dollars.  This created an independent market for the value of gold, and by 1971, one dollar was worth, effectively 1/35th of an ounce of gold. In 1971, Nixon disconnected the dollar from exchangeability at all, and henceforth the dollar was backed only by ‘faith in the US Government’. Gold itself was traded entirely independently from paper money.  When was the last time you bought something for a piece of gold? Or a gold coin?

Now, all this is very interesting, but what does this have to do with media?

A lot, really.

Our currency, so to speak today, is information. More than coins, if you think about it.

With the rise of the Interent, we have entered a world of “two currencies”, just like Gresham’s world.  I have printed newspapers but I also have online newspapers.  Two currencies, representing exactly the same thing.

In our own “Gresham’s Law”, the more dynamic currency drives out the less dynamic one. Hence, people are more likely to ‘trade’ online news than paper news.  It’s more easily acquired and it’s more flexible – it is more responsive, it changes faster.  This does not mean it is ‘better’. In some ways, it is debased… perceived as cheaper, hence more rapidly traded.  One is more likely to post an online article than clip and mail the very same article from the NY Times.   There is a difference. And in this difference, the more dynamic media drive out the less dynamic.

When all media on the web are compared, the same rule holds true – The more dynamic drives out the less dynamic.

Take two real estate web sites:  One has video, the other is only text, yet they are selling the very same house. Which garners more success?  Two dating sites: One is text only, the other has video. Which garners more dates?

Now take two news sites.  News is in many ways a commodity.  One news site has video, the other text and photos. Which garners more hits. Which is more ‘popular’, hence higher ad rates, hence it survives?

In England, Henry VIII and his son, Edward had progressively debased English coins by decreasing the silver content and adding brass.  England was deeply in debt.  Gresham urged Elizabeth to restore the value of the English money by pouring gold back into the coins, making them  more attractive to traders. This she did, at great cost, but in doing so, restored the solvency of the English economy and wiped out the debt.

Gresham’s discovery was not really all that new. Aristophanes made the point in The Frogs in 405 BC.

The course our city runs is the same towards men and money.

She has true and worthy sons.

She has fine new gold and ancient silver,

coins untouched with alloys, gold or silver,

each well minted, tested each and ringing clear.

Yet we never use them!

Others pass from hand to hand,

sorry brass just struck last week and branded with a wretched brand.

So with men we know for upright, blameless lives and noble names.

These we spurn for men of brass….