News Economics

Last week, in The Future of Information, I wrote:

In the future, we’ll have ‘knowledgeables’.

Any dedicated crowd — no matter how dedicated — is far too small a market for a big media outlet. Not necessarily too small for knowledgeables, though.

That’s why we’ll see knowledgeables capture markets mainstream can’t even dream of entering: less people to divide the money between.

When you want to be first at every scene, you create a correlation between your performance and the size of your HR department.

Today, with a much more compelling piece1 that encricles news as an industry rather than the entire domain of knowledge, Felix Salmon of Reuters published another chapter of his “Content Economics” series:

Before, the locus of value creation was fundamentally corporate: only big media companies could hire hundreds of journalists and put their work together into a comprehensive and valuable bundle. But online, bundling is cheap. Any blogger can start finding and linking to the best content out there, and many did. The real value, now, started being pushed down a couple of levels, to the individuals who were writing the content which would garner those all-important inbound links.

It used to be that if you left the NYT or WSJ or ABC News or some other storied news brand, you lost a lot of power and reach. But as the media universe fragments, that’s not nearly as true any more.

The result is what you might call the journalist arb: a digital company can pay its journalists significantly more than (say) the NYT, while still having a significantly lower total editorial budget per journalist. The journalists get more money, more freedom, more tools to tell their story, and get to work for a more nimble employer which isn’t burdened with a massive legacy cost basis.

So if you don’t want to take my word for it, take his.


  1. This is Felix Salmon, after all. ↩︎
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