Up until fairly recently, we consumed many goods and services bundled together. Your airline ticket price included a meal and checked luggage. Your cable bill included hundreds of channels. A newspaper subscription offered content from many journalists. But changing economics and technology have made bundling less necessary and attractive—at least in the short run. A bundled service offers lots of variety for a fixed price, but you end up paying for things you don’t want. Now, when we book flights online, we can see other airlines’ prices for identical routes; an airline can appear more competitive by breaking out different services. Streaming platforms mean that we no longer must pay for cable channels we don’t watch. And now, members of the media whom colleagues deem “problematic” don’t have to tolerate a hostile newsroom; they can send out an email newsletter or broadcast a podcast to their audience and collect money directly.
I don’t think that unbundling is the endgame in music, journalism, or punditry. Yes, we have pretty much seen the end of bundling music from physical forms, such as a vinyl record or a CD. And we are pretty near the end of the unbundling of the written word from physical forms, such as magazines and newspapers. But as Allison points out, only a few high-profile writers can expect viable subscription revenue in a totally unbundled world. If nothing else, what Clay Shirky called the mental transactions costs make people unwilling to pay for all the content they might like on a case-by-case basis.
Instead, I return to a prediction I made twenty years ago.
For an economic model, I continue to recommend the idea of “clubs.” A club would provide content aggregation, recommendation, and annotation services. Journalists would be paid by clubs, rather than by individual publications. For a consumer, joining a club will provide access to value-added services relative to online content.
Where we something that most closely resembles the club model I had in mind is in the video streaming world. Netflix, Amazon, etc.
If my prediction eventually holds, most writers, will not be able to make it on their own. Instead, they will be bundled together, just not in the traditional magazine or newspaper format. I think that once the club model gets going, the superstars will be recruited by the clubs for competitive purposes.
O chestnut tree, great rooted blossomer,
Are you the leaf, the blossom or the bole?
O body swayed to music, O brightening glance,
How can we know the dancer from the dance?
-Yeats
I think your club idea is basically what’s happening in the sports journalism world. The best example is probably The Athletic. They’ve bought up a lot of the best beat writers, podcasts, national writers, etc. and customers pay a small subscription fee to see the articles/podcasts/etc. that they want. The quality of the analysis there is very high relative to more traditional outlets.
“The best example is probably The Athletic.”
+1
But, I wonder if they are even remotely profitable at a subscription rate of $36/year.
Yep was just about to mention the athletic. Great site btw. Far better than ESPN for me.
You should start a Substack, Arnold. I would happily pay the mental transaction cost and more to subscribe 🙂
In all seriousness, like most things on the internet you will have superstars (Amazon, Joe Rogan) and a long tail of people doing OK (Shopify, Substack). Ben Thompson and Patrick McKenzie (patio11) are the experts on this topic.
The reason all the independent writers won’t get bundled into a traditional newspaper model is zero marginal costs. It matters if almost no one wants to buy your printed newspaper. It doesn’t matter if almost no one wants your Substack. You just need a relative handful of people to pay enough to make it worth your while.
The superstars (Rogan) will get acquired, but there will be a large independent long tail. Indeed, this is what is currently prevailing in the market. It will continue absent a new disruption.
I would pay a small amount for ASKBlog, Instapundit, and theNewNeo. Probably.
I like my blogging free; or only ad supported.
Writers of novels won’t be and don’t need bundling.
News writers do. Their “bundle” is the online group, whether PJ Media (bought by TownHall), The EpochTimes, One America News, https://www.whatfinger.com/ – the conservative wannabee replacement for Matt Drudge.
Bloggers, to make money on their writing, will likely move to weekly or monthly online magazine groups – like Andrew Sullivan’s Weekly Dish.
Facebook groups, or TikTok or Instagram or WhatsApp or other social media sharing areas might have some club-like small pockets of users, but most users won’t want to pay extra nor want any extra admin issues of joining or managing. Just the numerous messenger options is getting to be too much for some folk, like my wife. Not me, because I’m not joining them, so remain an observer rather than a user of most of them.
Aren’t we regular reader-commenters here on ASK sort of a super easy mini-club, for free? I read most comments, but Marginal Revolution has too many hundreds of comments so I’ve stopped commenting there, mostly; and almost never read those comments. So I even read Tyler and Alex less.
If video streaming is the closest to the club idea now around, the club idea is probably not so insightful. Am I missing something in not seeing much real annotation? The recommendations are implicit in the links, less often explicitly. But annotation mostly missing.
I almost never listen to Tyler’s conversations, and instead read transcripts. (I’m still sad, more than surprised, that AI voice speech to text remains so lousy.) As we move towards more folks doing more videos, the annotation and recommendations should be increasing in value – but I don’t see that happening much. Instead, the google algos are personalizing more and better, so each individual bubble gets more choices algo proven to be more likely to provide more clicks.
Clubs are not yet a good answer to the question:
How do good thinking writers, about current events, get paid?
Writers of novels won’t be and don’t need bundling.
Personally I get most of my brainless genre fiction these days from Amazon’s Kindle Unlimited. It’s a bundle system where 10 bucks a month allows me to borrow up to 10 books from participating authors. Crucially, the fees are divided among authors per page read (Kindles can track that). That means there’s no need for gatekeepers; if nobody reads a book its author gets nothing and the other authors don’t lose revenue. A lot of the writers post their fictions online before “publishing” them to Kindle Unlimited.
OTOH, I hardly ever read major-publisher genre fiction these days. It’s shooting for a wide market; lots of people like it but hardly anyone loves it. It’s also rather woke, which I can live without.
And, the greatest unbundling problem of them all…schooling. How much value to assign to high quality education vs. the other benefits of living in a good neighborhood?
Hint 1: $11.5k of our $20k in TX property taxes were itemized to the the local independent school district. But, I have no clue how much of those funds were redistributed to other less advantaged school districts, but some of those funds were undoubtedly re-allocated. (No state income tax here)
Hint 2: good schools are a function of good students (i.e. g and other related factors) and good teachers. How much of the high test scores to attribute to high g vs. good teaching?
Hint 3: owning a home in a nice neighborhood is a status good.
Hint 4: owning a home in a nice neighborhood has intrinsic value and other related benefits and amenities.
Hint 5: keeping undesirables out of the neighborhood (and schools) is also something very valuable.
So, how are you going to unbundle the benefits of living in a nice neighborhood vs. the benefits of being in a good school district? Good luck!
Wouldn’t vouchers, if set large enough, succeed at unbundling education?
There are no longer any school districts. There are just schools. Your child can attend any school within a reasonable (from your perspective) driving distance.
Thanks! I’m thinking no for the following reasons:
1) most (but not all) of the sorting based on IQ has already taken place. The high income enclaves that include great schools will remain with vouchers. Can you think of a scenario where high income parents send their students outside of the area for schooling?
2) there are only so many high quality teachers to go around. The best teachers will be attracted to the best school districts, which are highly correlated with home prices.
So, while I like the idea of vouchers, particularly for lower income high achievers, I don’t think they will change the status quo current much, if at all.
See #5: Hint 5: keeping undesirables out of the neighborhood (and schools) is also something very valuable.
To the extent that parents have wealth and power, it is very difficult to keep them from getting their kids out of bad schools and into better ones*. In our present system, this is the difference between charter schools (who take public money and mostly serve the poor) and private schools (which cost more but can reject or expel the troublesome).**
Also, what Hans said.
* Mine sure did.
** Charters have their own ways of cherry picking.
The cited article’s examples of unbundling are weak, at best.
– Airlines have started charging for anicllary services, but the vast majority of the ticket cost is still bundled together: fuel, equipment, and human costs. Everything else is small compared to these.
– Streaming services are, by definition, bundled. Just bundled differently than cable. Or is there a place where I can pay for a netflix subscription where I get a discount for not watching Narcos?
– Journalism has always existed a bundled / unbundled state. Individual superstar writers have collections published or range across multiple publications (Mark Bowden, for instance). Most articles in a typical publication are replacement-level at best and their writers would never exist as individual brands.
The truth is that we tried unbundling on a societal scale about fifteen years ago and it was a colossal failure. I’m of course speaking of purchasing individual songs, which did nothing to halt the decline of the industry. (A similar, but less dramatic trend played itself out with movies and TV shows). It wasn’t until streaming took off and music was bundled on a huge scale did people begin to consume more content legitimately.
Ultimately Shirky and Kling are correct. I suspect we’re not seeing unbundling in journalism as much as rebundling. I would suspect that the best Substack writers will gradually find like-minded contributors and build out small writer’s networks under their brand, instead of a brand like The Atlantic. We’ve always seen this as writers strike out on their own to do new magazines, blogs, etc. It’s just a slightly different medium.
“Streaming services are, by definition, bundled. Just bundled differently than cable.”
+1
Thank you god that I’m not the only one that noticed this. I’m so tired of hearing about how Netflix, with all of its subpar offerings, is an unbundled solution vs. cable.
This subject is really not that sophisticated and is certainly not new. Should I sell a loaf of bread and a pound of balogna, or should I bundle it into a sandwich? Billions of attempts have been made and will continue to be made, always allowing room for the entrepreneur to light the darkness with their latest attempt going up in flames.
I hope we will eventually move to a club system but I don’t think the private sector can provide a fully optimal solution on this question, mainly because information is almost a classic public good and will be under-produced without public involvement. I say almost because while information is excludable to a small degree (e.g the FT website or the Bloomberg terminal), with the internet you most people can usually get the gist of an article or investigation some other way.
So even if Substack and other outlets enable many writers to earn a living from the contributions of those willing to subscribe, I’m not sure it would be able to support as many writers and reporters as the pre-Internet world could.
Publicly-funded media could be a solution, but it tends to leave citizens without a choice regarding content and can be prone to ideological capture.
The approach I favour ( ) would basically involve mandating people to join a club, but they would get to choose which.
The different media clubs would then get a subsidy depending on how informative they are and their level of popularity. The aim is to create a media which covers the entire political spectrum, while remaining attached to reality.