Arnon Mishkin wrote a post last Thursday on paidContent called “The Fallacy Of The Link Economy” that has been generating a lot of discussion, so I figured I’d join in the free-for-all. First, let me try to reduce each person’s argument to a direct quote that best sums up his position.

Arnon Mishkin:

The vast majority of the value gets captured by aggregators linking and scraping rather than by the news organizations that get linked and scraped.

Jeff Jarvis:

Links are worth what the recipient makes of them.

Mike Masnick:

It’s not the link alone that has value or the story alone that has value, but the overall process of building a community.

Erick Schonfeld:

If a news site or a blog can say enough interesting things enough times that news aggregators (or other sites) keep linking to them, then they can build up their brand and reader loyalty.

Sigh. I thought the health care debate was bad enough, but I suppose that almost all impassioned debates come down to opposing sides exchanging half-truths.

In Mishkin’s defense: news organizations are in a catch-22. Many have suggested that if a news organization doesn’t want its content showing up on aggregators’ sites, it simply has to modify robots.txt accordingly. But news organizations can only do so individually–which puts them in a prisoner’s dilemma. Anti-trust law prevents news organizations from collectively bargaining with those who aggregate their content. For all intensive purposes, they are forced to abide by the status quo.

In Jarvis’s defense (yes, I’m actually defending Jeff Jarvis!): there isn’t much point in producing content for which most of the value is captured in a teaser so small as to be covered under fair use rights. As he’s said elsewhere, newspapers are inefficient, and the industry will have to shrink a lot to be healthy.

In Masnick’s defense: I cite my own blog post (also inspired by one of his posts) about monetizing community because participation is inherently uncopiable. It’s hard for me to agree with him more strongly than that!

In Schonfeld’s defense: his argument sounds a lot like the “freemium” strategy, which has a respectable track record. In order to build a loyal customer base, you often need to give away free trials as teasers–and that’s effectively what happens when media sites make some of their content available through aggregators. And, as in the freemium model, the actual product has to be significantly more interesting that the free teaser to earn the consumer’s investment–whether that investment is in the form of money, attention, or loyalty.

So, do I agree with them all? Not exactly. Mishkin’s first prescription to news organization should probably be to cut investment in undifferentiated content. Jarvis should acknowledge that the inability of news organizations to collectively bargain is unfair to them. Masnick–well, I basically do agree with him on the limited point he’s making. I suppose the strongest objection would be that not all media sites should be forced to become communities just because they’re hobbled in their ability to negotiate the monetization of the content they produce. And Schonfeld’s argument assumes the current link economy as a given–and one of the biggest points of contention is whether news organizations should be allowed to try to change that economy.

Sadly, I don’t see any of these guys giving the other an inch, which is why this discussion will probably continue unchanged for the foreseeable future. Hopefully the passion of the debate helps sell, um, papers.

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