New media, new work

So Newsweek has announced that it is closing its print edition, a few days after Alan Rusbridger was forced to deny that the Guardian has similar plans. Andrew Sullivan, who blogs at the Newsweek-owned "Daily Beast" reflects

The shift in my own mind has happened gradually. Even up to a year ago, I was still getting my New York Times every morning on paper, wrapped in blue plastic. Piles of them would sit in my blog-cave, read and half-read, skimmed, and noted. 

Until a couple of years ago, I also read physical books on paper, and then shifted to cheaper, easier, lighter tablet versions. Then it became a hassle to get the physical NYT delivered in Provincetown so I tried a summer of reading it on a tablet. I now read almost everything on my iPad. And as I ramble down the aisle of Amtrak's Acela, I see so many reading from tablets or laptops, with the few newspapers and physical magazines seeming almost quaint, like some giant brick of a mobile phone from the 1980s. Almost no one under 30 is reading them. 

I sympathise. I look at the Guardian website almost every day, but I can't remember the last time that I actually bought a paper copy. Sullivan continues

I also began to wonder what a magazine really is. Can it even exist online? It's a form that's only really been around for three centuries - and it was based on a group of people associating with each other under a single editor and bound together with paper and staples. At The New Republic in the 1990s, I knew intuitively that most people read TRB, the Diarist and the Notebook before they dug into a 12,000 word review of a book on medieval Jewish mysticism. But they were all in it together. You couldn't just buy Kinsley's perky column. It came physically attached to Leon Wieseltier's sun-blocking ego. 

But since every page on the web is now as accessible as every other page, how do you connect writers together with paper and staples, instead of having readers pick individual writers or pieces and ignore the rest? And the connection between writers and photographers and editors is what a magazine is. It defines it - and yet that connection is now close to gone. Around 70 percent of Dish readers have this page bookmarked and come to us directly. (If you read us all the time and haven't, please do). You can't sell bundles anymore.

Which is exactly how I read these days. The Guardian website is basically the only "bundled" media I consume. The rest is a personally selected collage wrapped up in my Google Reader account, consisting of all the important economics, development, and Africa bloggers, academics, with a couple of comics (Dilbert, XKCD), and my favourite Guardian and FT weekend columnists thrown in. This is quite a natural progression, given that it is almost (marginally) costless for me to do this. [Warning: Descent into wild conjecture and ill-thought out theory rapidly approaching]. Coase's theory of the firm bases the existence of companies on the role of transaction costs. As transaction costs external to the firm disappear, so does the reason for the firm. Which leads to an atomised media economy, where individuals are firms.

But I still read the Guardian. I suppose that there is a role for organisations to provide the raw news - the unknown unknowns that I don't know I might be interested in, and thus wouldn't search for or subscribe to. Someone who has a culture and values that I think I can trust. 

What does all of this mean, if anything, for the rest of the economy? In my line of work, we already have a similarly atomised economy. Many consultants are independent, and assemble into temporary teams for specific projects, establishing "mini-firms" that come together for a particular task and then disperse. At present the process of assembling these teams is a costly one. Searching for potential team members for very specialised roles and then assessing their quality is time-consuming. These are Coase's transaction costs, and provide a strong case for the existence of consulting firms - transaction costs can be minimized through a centralized process of quality assessment ("recruitment"), which doesn't have to be repeated for every project. This is also why networking is so important. Diamond, Mortensen, and Pissarides won the Economics Nobel Prize in 2010 for developing new models of "frictional" unemployment, driven by this process of search and matching. So this is a costly process with relevance to the wider economy and significant macroeconomic implications. But this large problem also presents a large opportunity. There are big gains to be made from improving this search and matching process. Already some of the biggest firms in the world are ones in the business of search and information sharing. Whether it be through linkedin or some other kind of online database or network - will further reductions in frictional transaction costs lead to further atomisation of the firm? Presumably there is still a role for a "Guardian" - a multi-purpose provider who can tell you about the unknown unknowns - the things that you wouldn't think to search for to begin with, and whose values and culture you can trust. 

Whether any of this makes any sense, and what the implications of this are for youth unemployment, well, you tell me.