The Economics of Information

Bree Nordenson has eloquently summarized the larger problems caused by information overload in her cover article for the Columbia Journalism Review. Her seven-page article articulates many of the points already mentioned here on this blog. She ponders whether we are more tuned in or more tuned out than we used to be, she asks whether all the information available on the web has made us any smarter and she examines the rise of niche media circles.

But she goes where I haven't yet gone: she looks at the economic impacts of information overload.

As I've said before information in our society has become (or perhaps always was but has now been revealed to be) a commodity. That being said, it can be traded in a market economy just like sugar or grain. And with the freedom to publish and freedom to obtain that has been made possible by the web, we have an entirely free-market economy to trade our commodity: information.

But, Bree says, if we want to make money we are going about the trade all wrong. In an attempt to earn prestige and glory for our news outlet (whether it be the Los Angeles Times or a self-published blog), we are flooding the market with up-to-the-minute breaking news reports and tsunami-sized waves of data.

Not only does this overwhelm the consumer, it overwhelms the market. With a constant demand and this massive increase of supply, basic macroeconomic principles tell us the value of that information will go down.

So, what to do then?

My elementary knowledge of economics tells me we have two choices:

1. Reduce the supply
2. Increase the demand.

Now, reducing the supply of news may initially seen like an impossible task. But in fact, by supply, Nordenson doesn't mean the actual amount of information on the web (which is continually expanding and almost never contracting). Rather, she means the information that is new, that information that we might call "news" in the loosest sense of the word. The amount of new information added to the web has increased sharply in the past few years. This has been a large factor in devaluing the product of journalists and nonfiction writers.

Certainly the prospect of discouraging some web writers from updating their blogs, or cutting back on their wikipedia edits, or reducing the content they add daily is unlikely. Even journalists for well-established news organization have taken to spreading their writing thick on the web with "web exclusives" and story-behind-the-story blogs in addition to their print content uploaded for the web. Nordenson says, "While it is naive to assume that news organizations will reduce their output - advertising dollars are involved, after all - they would be wise to be more mindful of the content they produce." Which gets us to our next point...

We know that information, and news, is readily available on the Internet, so how might we, as journalists, increase the demand for that information? Nordenson has an interesting suggestion: she says that good explanatory journalism can actually increase the demand for more information by sparking interest in a subject and making that subject easily understood. She sites, as an example, an episode of This American Life, the radio program with Ira Glass. For the duration of a full hour episode, the show explained the housing crisis and the factors that lead up to it. The programs was a great example of explanatory journalism on a subject that was not readily understood. But the program served to increase the demand for news on the housing crisis. Once readers (or listeners, in this case) understood the basics of the problem, they sought out more information to fill in the specifics. Media critic Jay Rosen says that good explanatory journalism like this creates a "scaffold of understanding in the users that future report can attach to, thus driving demands for the updates that today are more easily delivered." The programs responded with a podcast and another follow-up episode a few months later.

Thus, by simply doing a great job at the most basic tenants of reporting and explaining, we can make our product more valuable to readers. And if we can create a whole network of follow-up stories, peripheral knowledge, links, graphics and interactive features that build on a very basic understanding, then we can create a group of products that both have an audience and that will create a demand for themselves.

I truly believe that this is how we will rescue the news business. We can create a product that transcends time (you can see the original, most basic report from three months ago side-by-side with today's latest update), exists on unlimited space (with the opportunity to link across the web to all sorts of resources from primary sources to expert opinions) and creates a thriving market for itself at the same time that it creates a more educated public.