It is true, if inconvenient, that information wants to be free. Which fortunately doesn’t mean we’re done with Art or Journalism or the other services embodied in bits.
Stewart Brand · He coined the phrase in 1984; the original is “On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time.”
I disagree with the first half: Information qua information, as in facts, wants to be free not expensive; things like the best route from here to the airport, the closing price of Google shares, and election results.
These things want to be gratis, free-as-in-beer, because the cost of delivering them is so low; money is just too klunky and slow to fit, at the single-bite level. And they want to be libre, free-as-in-speech, because, well, some of it is speech, and the rest is stuff that makes life better for everyone.
Nero Knows · At this point, the voices of traditional journalism and other information-providing businesses are raised in a howl, along the lines of “you’re gonna miss us when we’re gone!” Yep, and as long as you hold onto the silly notion that you’re in the business of selling information, you’re gonna be gone.
At this I’d like to turn the floor over to Nero Wolfe, the famous fat fictional detective created by Rex Stout. I recommend the books unhesitatingly, and also the excellent A&E adaptation, in which Timothy Hutton is brilliant.
In the 1960 novel Too Many Clients, Nero intones, at a key point in the story: “I don’t sell information ... I sell services.” Exactly.
Service is Never Free · At the moment, there are three information-heavy services for which I pay: the New York Times, the Economist, and Tripit. In none of these cases does it feel like I’m paying for any particular piece of information. I’m paying for a service, for reliance on the promise that it’ll be there. For the two global news services, I’m paying to be sure that when there’s something interesting happening in the world, they’ll arrange for somebody smart to provide well-informed perspective. In the case of Tripit, I’m paying so that I can be sure that I can find my hotel’s address as I walk through the airport, and that I’ll get early warning of flight cancellations.
Would I pay even ten cents for an erudite piece on the troubles of the Euro-zone, or for a yes-or-no answer on the status of any particular flight? Unlikely. But I feel good about paying for a service that is going to work to offer knowledge that I know I’ll need and that experience has taught me will be useful.
I’ll grant that the distinction between bits-as-bits and bits-as-a-service may not always be obvious. But it’s crucial, because people will pay for only one of the two. What seems crucial in making the distinction is that in the case of a service, I’m paying ahead, for a predictable response to the unpredictable future.
As for Art · I actually don’t worry that much. First off, it’s always been a lousy way to earn a living. Second, the arts have always depended on patrons. Third, anything with a performance component can offer something you’ll never get through a computer network. Fourth, these days I find myself buying books all the time, bitching about the e-book pricing at Kindle and Kobo, but buying nonetheless.
Do Like Nero Said · Don’t sell information, sell services. If they’re services people need, you’ll do fine.
Contributions
Comment feed for ongoing:
From: Luis (Dec 04 2011, at 22:23)
I've always thought the more useful phrase was "transaction costs want to be zero."
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From: JulesLt (Dec 04 2011, at 23:10)
I just can't help feeling that there's something basically Thatcherite about the idea - the push away from making 'stuff' (whether physical goods or intangibles like words and movies and software) towards higher value services.
The nice thing about transactional, sometimes, is not having to have an ongoing relationship.
Which raises an interesting question - what is people's relationship limit?
We know people acquire too much 'stuff' - my hard drive is full of unused software and audio that really needs purging - but it's cheaper to ignore it and keep buying space.
Equally I must have hundreds of accounts set up with web sites.
But I wonder what my 'service' limit is - ie at what
Point does the cost of managing yet another subscription weigh against the value of the service. (which is where aggregators will come in)
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From: SPP (Dec 05 2011, at 09:31)
I agree with and appreciate your perspective. I wonder how you would view NPR and pledge drives in this light. I can see how one would view NPR as a service, as you describe it, because it preserves NPR's ability to function. However, other than with KQED's pledge-free, online audio stream, pledging does not directly buy me a service. Do you see this as a key distinction, be it a benefit or a failure?
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From: Andrew (Dec 05 2011, at 10:12)
Information itself doesn't want anything. People want things and what people want is for the information they consume to be free and the information they produce to be expensive. Whether that information is paid for directly in dollars, e.g. Tripit, or in terms of attention, e.g. anything supported by advertising, is irrelevant.
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From: Chris Mahan (Dec 05 2011, at 12:25)
You're not buying ebooks. you're licensing the content for viewing on specific devices. You should get them in epub with no DRM.
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From: Axure (Dec 05 2011, at 15:43)
It seems to me the distinction is somewhat superficial. It's like saying - a baker doesn't sell bread, he sells the service of baking bread. And I ask - why should the customer care? Maybe the baker sweats all night to bake the bread with his bare hands. Or maybe he installed the latest baking machine which takes ingredients (automatically ordered and delivered from wholesalers) on one end and spits out loaves on the other, making the "baker" just a nice biological interface between the machine and the customer. The average shopper can't tell the difference, he just wants to pay $1 and get his loaf.
In case of information, it may not be convenient to separately pay $1 for each article from the NYT, but the fact that you pay a constant monthly fee is just that - a more convenient way of organizing things.
So what difference does it make, whether you call it paying for items or for a service?
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From: Brian (Dec 06 2011, at 07:33)
@Axure: I think Tim conflates service with subscription. They are different and it is entirely possible to have a subscription to a service or not; which I believe your comment is speaking to.
To answer your question about the difference between a bread baking subscription service and a bread baking service:
1. Part of the service is a guarantee that if someone comes in and wants to buy up all of his bread right before you come in for yours, the baker will save a loaf for you. You get no such guarantee if you buy your bread a loaf at a time.
2. Decision Fatigue: With the service you make one decision for the term of the service and don't worry about it. Otherwise you make a decision everytime you need a loaf.
I think Decision Fatigue is the important factor in choosing the subscription. If there is a high frequency of transactions or many alternatives forcing a decision at each use (news articles) you subscribe. If you only need a loaf of bread once a week you buy it at the grocery store.
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From: Andrew (Dec 06 2011, at 08:53)
I re-read this post last night and the more I try to extract meaning the more it turns into double-speak. Axure's comment above is exactly what I was thinking, there is zero difference between what you define as a service and the information you are buying.
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From: Ron Lewis (Dec 06 2011, at 12:50)
How do I know that I want the information until I know the information? If I already know the information, why would I pay for it?
Generally, the information I really want does not exist, such as "Will MSFT stock go up or down tomorrow, and by how much?" or "Which employer will hire me?" If I would know these things, (1) I would buy or sell MSFT today. (2) I would not waste my time and money contacting employers who will not hire me.
I don't really want to buy any information, especially when the information is not exactly what I seek.
I buy information because there is some sort of gate that will not allow me to get information unless I pay the toll. And I buy all this information that I don't really want because among the information there might be some bits that give me some chance at guessing the information I really want. So, I might buy financial information that gives me some chance at guessing whether MSFT is on its way up or down. I might buy lists of employers that have hired the kind of skills I have.
All that is from the information buyer's perspective. From the seller's perspective, the distribution of information costs little: a piece of paper with ink on it, Internet costs, or other distribution methods.
If I can get a gate such as a copyright, or relative convenience, or other gate, then I can charge. I can offer the same information as others but in a more useful format, and copyright it.
Of course, a copyright does not help if you have no cost-effective way to enforce it.
And as a seller, if I cannot make enough money, I won't trouble myself to provide information.
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From: JimL (Dec 06 2011, at 15:56)
To Axure, there is a difference. The baker's business is paying the baker for his service baking the bread. The business is selling the bread. It sells a product and a service--having fresh bread available at a competitive price (sounds like a mission statement).
Newspapers provide information as their product and their service is to keep their consumers informed. The reporters sell their services to the newspaper by getting and writing about newsworthy information that the paper can sell. And, the newspaper business provides more service by providing nearby points to pick up the product (newsstands, home delivery, or internet).
This doesn't take an MBA to figure out. Just simple common sense.
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From: scarbom (Dec 07 2011, at 11:20)
yes, art relies on patrons, but these days patrons feel more and more like they should be getting their art for free.
dont' believe me? what if my art is creating ebooks and selling them. oh, snap!
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From: donny (Dec 07 2011, at 16:02)
The message (the bits) is the medium (the service). This might help explain why Tim doesn't like paying so much for his ebooks as compared to the paper version.
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From: Robert de Forest (Dec 07 2011, at 18:53)
Andrew wrote, "Information itself doesn't want anything."
That's not what the phrase means, any more than the phrase "Water seeks its own level" means that water has agency. The phrase refers to the dynamics of information and people's relationships to it. I think Tim explained it quite well in his fourth paragraph.
Axure wrote, "... the distinction is somewhat superficial."
The distinction is meaningful in that it re-frames the conversations about fairness and business models. A hypothetical consumer probably doesn't care whether we tell her she's paying for the bread or the service of making the bread available. But we do care because it changes our perspective. If you want to put it in terms of a news service, the difference is between buying "30 die in terror bombing" and buying an assurance that you will be notified in a timely matter of the events which interest you. The reason this matters is because the information is static and brittle, but the service is dynamic and flexible. Business formed around the value of static information is quickly obsolete. Business formed around solving people's problems can never be obsolete (though it can fail for other reasons).
Our economic systems are a way of gaining maximal benefits from specialization. Whether we have a Mad Max economy, a gift economy, capitalism, communism or anything else, what we're our economic systems are doing is finding a way for all of us to not have to do a little bit of everything.
When we think of the products themselves as being the thing we're buying, it complicates the analysis in the same way that geocentrism complicates astronomy. Relativity says that picking between the Earth and Sun as the center of the universe is equivalent, but the math for figuring out where Mars will be at this time next year is a lot easier if you start with the Sun's location set to 0,0,0.
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From: donny (Dec 07 2011, at 19:23)
Meant to quote Mcluhan and say the medium is the message. I thought the ebook example was great because who hasn't wondered why they are almost the same price as their physical twin since delivering bits is way cheaper than delivering dead trees. Made me think of the impact the medium has.
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From: Eddie (Dec 12 2011, at 11:17)
> As for Art · I actually don’t worry that much. First
> off, it’s always been a lousy way to earn a living.
On one hand that's not surprising given you work for a large corporation (Google) at a time that is well past its early founding days (before that you worked for the comfy confines of a "big" company, Sun, that crashed). Entrepreneurs especially those on the cutting edge in technology tend to push the state of the *art*. Business development is, in fact, a type of art form.
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