Our Post-Profit Future

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I was reading Wired‘s package of articles about the rise of Web video, and, well, they’re a bit odd. Bob Garfield’s article seeks to puzzle out why Google would pay so much money to acquire YouTube. The reason, he says, is basically that YouTube is awesome and lots of people like it. Over time, it seems, more and more people will be visiting this site. So, therefore, the site would be a good thing to own. Then closer to the end of the article, he notes that there may be some problems with this. To actually turn all those viewers into money, you need to sell ads. But it’s hard to sell ads on YouTube. For one thing, lots of YouTube streams don’t even come through the YouTube site. For another thing, there are lots of other sites that also do video hosting, so if YouTube gets all ad-heavy, people may switch away to other services.

Then we read about LonelyGirl15 and how these dudes had this idea and nobody believed in them. But they did it anyway. And it turned out to be pretty awesome. And lots of people watched the show. So — ha! — where are the haters now? Except, again, at the end it turns out that even if LonelyGirl15 is awesome and popular, its creators have had a hard time actually making money off of it.

To me, at least, this is the real moral of the story. Peer-production of digital media probably will produce a fair quantity of awesome popular stuff lurking amidst the vast pool of dreck. And well-designed services will let the awesome stuff rise to the top and the dreck fade to the background, rendering those services awesome and popular. But — and here’s the rub — having something awesome and popular just may not prove to be especially lucrative. In the past, a popular television show or a popular album or a popular film or a popular distribution channel guaranteed you vast sums of money. In the future, that just may not be the case. The very most popular things will generate some income, enough to live off of and continue financing new projects, but not the sort of gigantic windfalls associated with 20th century media hits. And lots of other things — including reasonably popular ones — will only generate trivial levels of income. And they’ll continue to be made. Made by people who think its fun, or who derive some benefit from their work other than direct monetary income.