Controlling the means of exchange of a good or service the public demands has always been one of the best ways to make money. This is how Jews got rich (and attracted haters) during the Middle Ages and why El Chapo is one of the wealthiest men in Mexico.
Kodak once had a dominant market position in the exchange of images. In 1976, it controlled 90 percent of film sales in the U.S. When most photos were created on its film and shared on its paper, Kodak was a truly indispensable corporation. It was the link between the photographer and the audience he wanted to show the photographs to.
Now that photos are captured digitally, tweeted and shared on Facebook, Kodak moments have become Instagrams. In related news, Kodak is bankrupt and Instagram sold for $1 billion last year (and would likely fetch even more today). The inherent value of photographs as content has not changed, but a paradigm shift in how consumers receive them determined the fate of those controlling the means of exchange.
This is why newspapers today are scared shitless. Back when agate type was the sole means of transmitting news, industrial printing presses and intrepid delivery crews controlled the distribution and exchange of information. They were also under the purview of the content provider itself, for a perfectly vertically integrated setup.
The local paper reported the news, wrote the news, edited the news, printed the news and dropped it off at its consumers’ front doors. Today, its journalists might still pound the pavement for interviews and do some initial editing, but from there, its stories are curated, aggregated and shared by people in our social circles through our social networks. Even those of us with digital subscriptions to news outlets (I personally subscribe to the New York Times) generally don’t begin our newsgathering with a visit to www.nytimes.com. We tend to begin by checking Twitter or Facebook on our phones, and then maybe moving on to Google News and Gawker once we get to a computer.
I subscribe to the NYT because I find that my social news tour guides often point me to its direction, and having access to its full suite of stories is worth paying the cost of one lunch every month. The NYT’s content has value to me; its actual “newspaper”—both the physical print copy and the arrangement of its home page—don’t.
Newspapers still produce physical editions despite print circulation falling off a cliff because digital ad revenue has not (yet) made up the difference. There are several reasons for this, including Newton’s First Law, but that’s for another day. The important point is that even though in 2013 content has more apparent value than the now useless information gatekeeper role that has been replaced by our peer group, real dollars haven’t followed. Digital ad revenue is growing, but it’s nowhere close to making up the difference in lost print revenue. This is why newspapers are forced into keeping one foot on either side of the millennium: they realize that consuming news digitally is the future and allocating more resources in that direction would help expand and improve their internet presence, but newsprint still pays the bills.
Unlike Kodak, which realized its future was as an image company and not a film company too late in the game to save itself, newspapers realize they will only survive by getting paid for their content and not their distribution networks. The problem they face is that once the record amount of eyeballs that are on news today get monetized (and the aging print-only demographic continues to die out), the warehouses, printing presses, delivery vehicles and all the employees working on producing and distributing the actual paper become a no-longer-relevant money pit.
I am not overly concerned that old-line print newspaper companies won’t find a way to make money from digital advertising. I am concerned that once they do, legacy costs from the old model will handcuff them as they transition to online-only, allowing purely digital companies like BuzzFeed and Gawker, and legacy print outlets like the Washington Post owned by people to whom money is no object, to crush them before they even get a chance to establish a foothold in the new market.
In other words, while photography is timeless, maintaining a darkroom in an Instagram world is a quick path to irrelevance.