Tuesday, July 07, 2009

Accio Value!

I'm getting fed up hearing that music has lost its value - to pirates, the internet, goblins or what have you.

Of course recorded music has value! What it lacks is price. It is the nature of the internet to lubricate communication, and it turns out that the apparent correlation between value and price is completely dependent on a certain friction in the marketplace. If it takes no effort to bring something to you then the actual price of that good is zero. This would be equally true if we could summon bananas to us at will from plantations on the Ivory Coast. It would be tough on the growers, but in a frictionless market they could no longer realise the value they had put in tending the plants. Of course such banana-summoning is clearly theft by any definition that has meaning today, but if we all suddenly had this Harry Potter-like power, what - short of a sudden outbreak of global altruism - could be done to stop it?

Music may have been the first sector to experience this effect, but it's not alone. And since the whole issue of music copying is fraught with emotion, consider instead the market in news. The internet has actually increased the value of news by making it both more immediate and longer-lasting, and by giving readers everywhere the ability to interact with and discuss it. Although there is no such thing as "news piracy", the true market price of news is also being revealed to be: nothing. This is why News Corp is trying to sue Google, and Robert Thomson of the Wall Street Journal was prompted to say that "Google devalues everything it touches"1. But it's the internet itself which is to blame for such reduction in cost, even as it ramps up the value - Google is but one of many lubricants which - fantastically! - enable us instantly to find what we want. The downside (if that's what it is - perhaps we should say, less judgmentally, "side-effect") of this unfettered access is the stark and unavoidable separation of value from price.

Clearly, long-term, this is going to be a major problem (or opportunity, if you're so inclined): if journalists, editors and writers, like composers and performers before them, are unable to convert into a living the effort they put into their valuable work, continuing their socially important efforts will become unviable. Perhaps, instead of the seemingly impossible task of artificially raising prices we should start looking at ways to reduce the cost of living for all content creators (indeed for everyone) by spreading the gift economy into other sectors in a race towards a universal zero price.

1 http://www.poynter.org/column.asp?id=45&aid=158432