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Place Your Bets About Paid Content

  |  August 21, 2009   |  Comments

Bets are now being placed on whether people will pay for general interest information online.

"Rien ne va plus. No more bets," the croupier says just before spinning the roulette wheel.

Unlike poker or blackjack, roulette is a game entirely about hope, not skill. The odds of any number coming up are always the same. Albert Einstein was reputed to have said, "The only way to beat roulette is to steal the money when the croupier isn't looking."

Yet hope motivates hundreds of thousands of people worldwide who play roulette, some betting significant amounts of money, even their entire worth, on the hope that they'll win despite all the evidence and experience to the contrary. Those who are in financial trouble seem the most desperate to bet. And the most naive will even duplicate the bets of famous gamblers who should know better than to play.

It's sad to see so many people deceive themselves that they each will win. Data, experience, and theory are against them. But hope springs eternal.

And that's the way it is now with many online publishers, particularly those in the newspaper or consumer magazine businesses. Many have begun placing bets that people will pay to read their general interest information online, despite data, experience, and theory to the contrary.

Those in financial trouble, such as "The Boston Globe" and "The New York Times," seem the most desperate to bet they'll win. And the most naive publishers are comfortably duplicating the bet recently placed by Rupert Murdoch that charging for online for general interest content will win.

Murdoch is an experienced gambler, but not at this game. He is skillful at games in which he's competing as much against other players as against sheer odds.

He is inexperienced in new media, particularly the most modern forms of it, a game that uses quite different mechanics and rules than he's used to. He was so burned from his early forays into online 15 years ago that he wouldn't have anything to do with new media until a few years ago, and his experiences since he began dabbling in it have been only randomly successful. Anybody with the money could have purchased MySpace, but how notable have News Corp.'s own digital endeavors been compared to similar media companies' efforts?

Nevertheless, plenty of traditional publishers are betting the way Murdoch does because they figure he must know what he's doing, because they don't. They refuse to understand that new media operates by different mechanics and rules than they're used to.

After all, they say, people pay for content in print, so those people should pay for it online. It must be the same, they claim.

Traditional publishers aren't incapable of understanding that new media is different and operates differently than print, but they simply don't want to understand. They don't want to because doing so would overturn their long-standing beliefs. They hope it isn't true.

Nearly 100 years ago, the counterintuitive theories of relativity and quantum mechanics began to overturn classical physics. The works of Einstein, Max Planck, Niels Bohr, Werner Heisenberg, Erwin Schrödinger, and others proved that the classical physics of Isaac Newton, with which most of the world's scientists and engineers were comfortable, wasn't the basis of the universe. I've lately been reading about that period because the clash between classical and quantum advocates then is very similar to the clash between traditional and new media now.

When Bohr, Heisenberg, and others proved that reality at the fundamental level of atoms or smaller particles doesn't work according to Newton's classical physics -- that atoms aren't tiny solar systems of electrons orbiting nuclei of protons and neutrons, that you can't actually calculate where a particle is and how fast it's moving, that you can't actually predict for sure what it will do -- classical physicists had fits and tried to deny the new reality. Until the end of their lives, the traditionalists continued to apply classical theories even though they didn't work.

I expect to see Murdoch, Sumner Redstone (National Amusements), John Malone (Liberty Media), S.I. Newhouse Jr. and Donald Newhouse (Advanced Publications), Tony and Gavin O'Reilly (Independent News & Media Group), and other traditional media moguls continue to apply traditional media theories to new media until the ends of their days. Like applying classical physics to quantum mechanics, they won't get the results they expect.

They might lose fortunes. But they'll be following their hopes. Old gamblers playing a new game.

I'm glad Murdoch and so many traditional publishers are betting that they can force people to pay for content online. I'm glad because the roulette wheel can now spin, and we'll see the triumph of data, experience, and the new theory over hope and the outdated, traditional teachings.

Two weeks ago during an executive education in new media seminar I taught, editors asked me if it had yet been clearly proven that people won't pay for general interest information online. I told them to wait: the bets are now being placed and the wheel has yet to be spun.

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Vin Crosbie

As managing partner of Digital Deliverance LLC and publisher of the "Digital Deliverance" newsletter, Vin Crosbie advises news media worldwide about new media strategies and tactics. As adjunct professor of visual and interactive communications and senior consultant for executive education in new media at Syracuse University's S.I. Newhouse School of Public Communications, he teaches that wisdom to graduate students and media company executives. "Folio" magazine called him "the Practical Futurist." "Editor & Publisher" magazine devoted the overview chapter of its executive research report "Digital Delivery of News: A How-to Guide for Publishers" to his work. And his speech about new media to the National Association of Broadcasters annual conference was one of 24 orations (including some by President George W. Bush, Condoleezza Rice, Hilary Clinton, and Barack Obama) selected by a team of speech professors for publication in the reference book, ">Representative American Speeches 2004-2005."

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