Category Archives: nicholas_carr

gift economy or honeymoon?

There was some discussion here last week about the ethics and economics of online publishing following the Belgian court’s ruling against Google News in a copyright spat with the Copiepresse newspaper group. The crux of the debate: should creators of online media — whether major newspapers or small-time blogs, TV networks or tiny web video impresarios — be entitled to a slice of the pie on ad-supported sites in which their content is the main driver of traffic?
It seems to me that there’s a difference between a search service like Google News, which shows only excerpts and links back to original pages, and a social media site like YouTube, where user-created media is the content. There’s a general agreement in online culture about the validity of search engines: they index the Web for us and make it usable, and if they want to finance the operation through peripheral advertising then more power to them. The economics of social media sites, on the other hand, are still being worked out.
For now, the average YouTube-er is happy to generate the site’s content pro bono. But this could just be the honeymoon period. As big media companies begin securing revenue-sharing deals with YouTube and its competitors (see the recent YouTube-Viacom negotiations and the entrance of Joost onto the web video scene), independent producers may begin to ask why they’re getting the short end of the stick. An interesting thing to watch out for in the months and years ahead is whether (and if so, how) smaller producers start organizing into bargaining collectives. Imagine a labor union of top YouTube broadcasters threatening a freeze on new content unless moneys get redistributed. A similar thing could happen on community-filtered news sites like Digg, Reddit and Netscape in which unpaid users serve as editors and tastemakers for millions of readers. Already a few of the more talented linkers are getting signed up for paying gigs.
Justin Fox has a smart piece in Time looking at the explosion of unpaid peer production across the Net and at some of the high-profile predictions that have been made about how this will develop over time. On the one side, Fox presents Yochai Benkler, the Yale legal scholar who last year published a landmark study of the new online economy, The Wealth of Networks. Benkler argues that the radically decentralized modes of knowledge production that we’re seeing emerge will thrive well into the future on volunteer labor and non-proprietary information cultures (think open source software or Wikipedia), forming a ground-level gift economy on which other profitable businesses can be built.
Less sure is Nicholas Carr, an influential skeptic of most new Web crazes who insists that it’s only a matter of time (about a decade) before new markets are established for the compensation of network labor. Carr has frequently pointed to the proliferation of governance measures on Wikipedia as a creeping professionalization of that project and evidence that the hype of cyber-volunteerism is overblown. As creative online communities become more structured and the number of eyeballs on them increases, so this argument goes, new revenue structures will almost certainly be invented. Carr cites Internet entrepreneur Jason Calcanis, founder of the for-profit blog network Weblogs, Inc., who proposes the following model for the future of network publishing: “identify the top 5% of the audience and buy their time.”
Taken together, these two positions have become known as the Carr-Benkler wager, an informal bet sparked by their critical exchange: that within two to five years we should be able to ascertain the direction of the trend, whether it’s the gift economy that’s driving things or some new distributed form of capitalism. Where do you place your bets?