Unbundling Media 01

The quiet revolution started some time ago but now it is going toward its tipping point.
The unbundling media's best description I came across is Nicholas Carr's The Big Switch (rewiring the world from Edison to Google).
“But the nature of a newspaper, both as a medium for information and as a business, changes when it loses its physical form and shifts to the Internet. It gets read in a different way, and it makes money in a different way. A print newspaper provides an array of content—local stories, national and international reports, news analyses, editorials and opinion columns, photographs, sports scores, stock tables, TV listings, cartoons, and a variety of classified and display advertising— all bundled together into a single product. People subscribe to the bundle, or buy it at a newsstand, and advertisers pay to catch readers' eyes as they thumb through the pages. The publisher's goal is to make the entire package as attractive as possible to a broad set of readers and advertisers. The newspaper as a whole is what matters, and as a product it's worth more than the sum of its parts. When a newspaper moves online, the bundle falls apart. Readers don't flip through a mix of stories, advertisements, and other bits of content. They go directly to a particular story that interests them, often ignoring everything else. In many cases, they bypass the newspaper's "front page" altogether, using search engines, feed readers, or headline aggregators like Google News, Digg, and Daylife to leap directly to an individual story. They may not even be aware of which newspaper's site they've arrived at. For the publisher, the newspaper as a whole becomes far less important. What matters are the parts. Each story becomes a separate product standing naked in the marketplace. It lives or dies on its own economic merits.
Because few newspapers, other than specialised ones like the Wall Street Journal, are able to charge anything for their online editions, the success of a story as a product is judged by the advertising revenue it generates. Advertisers no longer have to pay to appear in a bundle. Using sophisticated ad placement services like Google AdWords or Yahoo Search Marketing, they can target their ads to the subject matter of an individual story or even to the particular readers it attracts, and they only pay the publisher a fee when a reader views an ad or, as is increasingly the case, clicks on it. Each ad, moreover, carries a different price, depending on how valuable a viewing or a clickthrough is to the advertiser. A pharmaceutical company will pay a lot for every click on an ad for a new drug, for instance, because every new customer it attracts will generate a lot of sales. Since all page views and ad clickthroughs are meticulously tracked, the publisher knows precisely how many times each ad is seen, how many times it is clicked, and the revenue that each view or clickthrough produces.
The most successful articles, in economic terms, are the ones that not only draw a lot of readers but deal with subjects that attract high-priced ads. And the most successful of all are those that attract a lot of readers who are inclined to click on the high-priced ads. An article about new treatments for depression would, for instance, tend to be especially lucrative, since it would attract expensive drug ads and draw a large number of readers who are interested in new depression treatments and hence likely to click on ads for psychiatric drugs. Articles about saving for retirement or buying a new Car or putting an addition onto a home would also tend to throw off a large profit, for similar reasons. On the other hand, a long investigative article on government corruption or the resurgence of malaria in Africa would be much less likely to produce substantial ad revenues. Even if it attracts a lot of readers, a long shot in itself, it doesn't cover a subject that advertisers want to be associated with or that would produce a lot of valuable clickthroughs. In general, articles on serious and complex subjects, from politics to wars to international affairs, will fail to generate attractive ad revenues.
Such hard journalism also tends to be expensive to produce. A publisher has to assign talented journalists to a long-term reporting effort, which may or may not end in a story, and has to pay their salaries and benefits during that time. The publisher may also have to shell out for a lot of expensive flights and hotel stays, or even set up an overseas bureau. When bundled into a print edition, hard journalism can add considerably to the overall value of a newspaper. Not least, it can raise the prestige of the paper, making it more attractive to subscribers and advertisers. Online, however, most hard journalism becomes difficult to justify economically. Getting a freelance writer to dash off a review of high-definition television sets—or, better yet, getting readers to contribute their own reviews for free—would produce much more attractive returns........
Speaking before the Online Publishing Association in 2006, the head of the New York Times's Web operation, Martin Nisenholtz, summed up the dilemma facing newspapers today. He asked the audience a simple question: "How do we create high-quality content in a world where advertisers want to pay by the click, and consumers don't want to pay at all?" The answer may turn out to be equally simple: we don't. At least one major newspaper, The Times of London, admits that it has already begun training its reporters to craft their stories in ways that lead to higher placements in search engines. Jim Warren, the Chicago Tribune's managing editor, says that "you can't really avoid the fact that page views are increasingly the coin of the realm." As long as algorithms determine the distribution of profits, they will also determine what gets published.
The unbundling of content is not unique to newspapers or other print publications. It's a common feature of most online media. Apple's iTunes store has unbundled music, making it easy to buy by the song rather than the album. Digital video recorders like TiVo and pay-per-view cable services are unbundling television, separating the program from the network and its schedule. Video sites like YouTube go even further, letting viewers watch brief clips rather than sitting through entire shows. Amazon.com has announced plans to unbundle books, selling them by the page. Google provides “snippets” of text from published works through its controversial Book Search service. Podcasting is unbundling radio programs. Wikipedia is unbundling the encyclopedia. The "bundling of the world's computers into a single network," writes Daniel Akst, "is ushering in what may be called the unbundled age."
Economists are quick to applaud the breaking up of media products into their component pieces. In their view, it's how markets should work. Consumers should be able to buy precisely what they want without having to "waste" money on what they don't. The Wall Street Journal celebrates the development, saying it heralds a new era in which we'll no longer have "to pay for detritus to get the good stuff." That's true in many cases, but not in all. Creative works are not like other consumer goods, and the economic efficiency that would be welcomed in most markets may have less salutary effects when applied to the building blocks of culture. It's worth remembering, as well, that the Internet is a very unusual marketplace, where information of all sorts tends to be given away and money is made through indirect means like advertising. Once you fragment both the audience and the advertising in such a market, large investments in the production of certain creative works become much harder for businesses to justify. If the news business is any indication, the "detritus" that ends up being culled from our culture may include products that many of us would define as "the good stuff." What's sacrificed may not be blandness but quality. We may find that the culture of abundance being produced by the World Wide Computer is really just a culture of mediocrity—many miles wide but only a fraction of an inch deep.”