Among yesterday’s front pages was a data visualisation which, at first glance, was one of the most effective I’ve ever seen: the Independent had made an infographic showing yesterday’s £6bn budget cuts in context - as a fraction of a debt mountain.
Then I looked closer - and something’s very, very wrong.
Can you tell what it […]
Everyone’s trying to work out how journalism is going to work online - especially how the hell it’s going to be paid for. Making the news market work online (well, monetizing anything online) is tricky. But a decent question is whether journalism works as a market product now. Most publications are certainly trying to make money out of it, but is journalism governed by supply and demand? Not really.
Can I back that statement up? I can have a go. Take a look at the graph below, from google trends:
The top graph is number of UK searches in the last month on 4 more-or-less random current affairs stories. The bottom graph is (roughly) the number of stories written by professional news organisations in that time. There’s a reasonable correlation for the olympics, but you’ll note more’s written than read on the credit crunch, and vice versa (bigtime) on Shannon and Madeleine. Recession? Who cares?
If journalism’s a market, it’s not really working. I spotted another sign that the journalism market doesn’t behave over at Adrian Monck, who carried a quote from a blog post on the Berkman Conference (on “participatory media”, no less):
Serious journalism was described … repeatedly, as something akin to like broccoli, or medicine the citizenry needs to spoon down, no matter how unpalatable, if democracy is to survive. That’s despite the fact investigative, or civic, journalism is still seen inside the industry as being at the top, most vital top end of what we do. Yet I struggle to think of another industry that views its premium product as something akin to a nasty cough syrup - necessary, good for your health, but irredeemably foul-tasting.
(Apologies to Prof Monck, from whom I’ve lifted not only this snippet, but also post title. Tsk.)
Let’s accept for now that papers (and other outlets) don’t just offer what people want to read. There’s a lot that’s market-driven, of course, or papers would quickly go out of business. But at least some (to differing extents) of what gets published is not just there to satisfy demand.
This idea helps to explain why “old media” is starting to have a tough time of it. The obvious example here is gawker. Gawker’s bloggers are paid by the number of views each post gets. Don’t know about you, but that scares the bejeesus out of me, as a “content provider”. But I digress. Bloggers have very little incentive to produce worthy-but-dull content for gawker - feeding what the public wants is really the only way. Old media outlets, whose staff don’t face such direct incentives, are less likely to be so market-focussed, so may struggle. But should news outlets follow the market? There’s a decent argument against it - but be warned, economics is involved.
Warning: 3 paragraphs of economics follows. It’s worth it though, honest.
Some “serious” journalism has benefits to society. Let’s say I buy the Guardian because I enjoy reading it. As I’m browsing through, I read that all that stuff about MMR vaccines causing autism was, well, bollocks. As I result, I have my children immunised, and we don’t get measles outbreaks in our school. My personal decision to buy the paper had benefits to society at large. There’s also usually arguments about informed democracy, and keeping politicians honest, etc, in this reasoning. Goods with these funky benefits are called merit goods in economist lingo.
Merit goods sound great, but they’re actually a pain in the arse. To see why, it’s easiest to think about the opposite. When I buy a car, it causes problems for everyone else in society. It adds to traffic congestion, it’s noisy when I drive around outside your house, it means my neighbours have to battle with me for parking, it wears down roads, and of course it contributes to climate change. My car costs you, and the Government, time and money which I don’t notice. To force me to take these into account, I pay tax on my car and on fuel - I’m forced to take the social cost on board.
But in the opposite situation, it’s a bit trickier. There are benefits to society in me following the news - instead of wanting less people to use the good (as with cars), we would like more people to read papers (or news sites, or broadcasts). The “free market” fails for goods like these exactly as it fails for cards - the “right” amount isn’t provided (see the earlier “merit goods” link for a nice graph showing this). One way to fix this is to lower the cost - Government subsidies to News International anyone? No? TV networks are compelled to provide a certain amount of news each day - for “public service” reasons. Should we do the same for other potential news outlets?
Economics bit over. Thanks for your patience
Until now, we’ve never really needed to. There are many reasons for owning a newspaper, and profit is rarely chief among them (thankfully). Very few newspapers rake in the cash - nor many magazines. Papers are a path to influence public opinion, a show of status for the owner, an almost surefire route to a peerage, and more. Proprietors’ complex motives have actually led to partial fixing of the “merit goods” issue.
Newspapers bundle a load of content together - sports, arts, TV listings, film reviews, comment and news. People buy the Sun for its cracking sports section, and keep roughly abreast (pun unintended but left in place) of current affairs at the same time. You may buy the Indie for a particular columnist, and get the rest thrown in. A populist front page story about house prices may draw someone in to buy a paper containing “worthy” stuff within. It’s worked for decades.
And along comes the ‘net, and bundling has had it. There are compensations: it’s easier to get something big out there quick and well than it ever was. It’s also easier to communicate and interact with your core audience - and even “dull but worthy” has a decent population wanting to read it. The ‘net’s prevailing price point (free) makes it easier for, say, business consumers to tune in to the relevant RSS feeds of several news organisations at once. “Quality” journalism isn’t necessarily doomed. But mass-market news is in trouble.
There’s probably an opportunity there, too. Bundling’s probably a fairly lazy tactic, as they go. Trying to find ways to make complex stories accessible and interesting suddenly becomes high priority. Given the ability to tell the same stories in different ways online, it could be doable. Let’s not forget “old media” is doing pretty well at moving online. The biggest news sources online (in the UK, anyway) are the old media outlets - BBC and the Guardian up in front, with several other newspaper sites rapidly closing the gap. Guido and Iain Dale may claim traffic figures coming close (or maybe not), but if we keep using the web as we do now, then all of today’s “future of news” arguments will look pretty stupid in five years time. But my job prospects would be looking healthier, so I could bear the discomfort with fortitude.
And finally: Just out of interest: Is it too old left, or old media to suggest there are stories out there that have worth beyond their readability? If not, what ideas do people have to preserve that kind of journalism in the new media age? Ideas on a postcard to the usual address…
Everyone can be a pundit - I’m proving myself right by joining in right here. The trouble is, there’s hundreds of indicators and you can pick and choose to suit. The UK stock market (the FTSE) always nosedives when the Dow Jones does - so if the US plummets we do. No, wait. The UK’s stock market fell less (proportionately) during the dotcom crash than the Dow. We’re losing our dependence! No, wait. The US is our biggest trade partner after the EU, so if they stop buying, our exports will suffer. No, wait….
The easiest was is to pick your argument then your data. But there’s actually a statistical trick or two that can help guide the way. One of the simplest is below. It’s called regression, and is a bit like the scatter graphs and lines of best fit you learn for GCSE on steroids. Regression is a way to examine a relationship between two things, or variables. It tells you if there’s a relationship between the two and if so, how strong it is.
It doesn’t tell you anything about why there’s a relationship, which variable is causing the change in the other, or even whether some outside factor is the source. It is, though, quite a handy way to see what’s going on, even if it can’t tell us why.
So, what happens if we run a regression on FTSE and Dow levels for the last five years? The chart below (click it to enlarge) tells the story:
The line is pretty clear - as one index rises, the other does the same. If one falls, the other joins in. The chart says more than that, though: the r-squared value shown on the chart (0.8667) shows how much of the variance (difference) between the two variables is explained by the model, as a percentage. So over 86% of the variation is covered.
There’s one more figure of interest, not on the chart. The p-value. This, roughly speaking, measures how likely you’d be to get this result if there was no relationship between the two variables. It’s sometimes explained as “the probability the result is a fluke”, though is frowned on in the statistical community. But the statistical community is small and has no mafia connections, so it’s safe enough to think of it in those terms.
A p-value of less than 0.05 is generally held to be pretty strong. The p-value on this data is <0.0001 - a phenomenally strong result.
This is a really crude measure, and there’s lots of intricacies that could be factored in, but no-one’s producing a thesis here. The simple, if rough, conclusion is that if the US economy goes south, the UK will be phenomenally lucky not to do the same.
Now, no-one wants to have to go and grab a degree in statistics to read the business section - or work out their mortgage - but using some of this stuff can really clear up the picture, if it’s done right.
Parental Advisory: Contains mild to moderate microeconomic references. But no spoilers.
Like some 11 million others, I bought the final Harry Potter book last Saturday. What frustrated me was having to buy it in hardback. Why are books only released in hardback format? Does anyone prefer them?
Hardback books are useful for libraries and similar venues, as they wear more slowly and are much harder to damage - useful when they will be read and re-read by none-too-careful borrowers. However, they are heavier, harder to hold, and more expensive than paperbacks. The durability is not all that useful when even an avid re-reader (such as myself) is only likely to read any one book five or six times.
I’m not just assuming every reader’s like me. A good sign that few private buyers prefer hardback is their disappearance once paperbacks are released. This suggests that once the alternative is available, no-one chooses the hardback. Supporting this is the fact that second hand bookshops (such as Blackwell’s) explicitly refuse to buy back hardback versions of books available in paperback - due to lack of demand.
So why are new books released first in hardback? The library explanation isn’t enough - they’re a niche market. Until recently, many DJs preferred vinyl to CDs, yet new albums aren’t released any earlier on vinyl than CD. The best explanation I’ve encountered comes from Tim Harford’s “Undercover Economist” (now available in paperback). It’s essentially as follows:
Publisher wants to make the most money he can from his book. He’ll make more money per book if he can make people who are really eager to read a book pay more; but he also wants to sell lots of copies, which means dropping the price. Now, if there’s a cheap version available, everyone buys that one. Releasing the expensive hardback version is a form of price discrimination. Keen readers buy the expensive version, released several months early, casual readers the cheap one.
There are two reasons this argument seems flaky, though. One’s a weakness in the argument, the other relates to changes in publishing:
Perhaps it’s this shift in bookselling that will herald the (in my opinion overdue) demise of the hardback - it certainly seems like a format which has had its day. There ends our brief sojourn through the world of publishing economics, which in the interests of full disclosure, I will remind readers is a field I know precious all about.
Deathly Hallows - review in brief: Not bad, certainly an improvement on five and six. Also makes clear why it was necessary to make book six so gut-wrenchingly dull: it does have a purpose, and seven is at least much pacier.
This one’s a bit off-topic (and long), but I felt like getting it online. It’s a piece summarising the arguments against Fairtrade food, hopefully not from anything approaching a “free-market fundamentalist” perspective. It was first published in the Oxford Forum, as was a response by the Fairtrade Foundation.
Of course, it’s all just one view - the other side of the argument can be found here, here, here or here (the last one is very web 2.0) . But, if you’re interested in why Fairtrade mightn’t be the salvation of the world’s poor, please do read on.
I don’t like buying Fairtrade food: it’s a matter of conscience. This isn’t because I don’t care about the plight of third world farmers. It’s because I do. I also care about third world mechanics, housewives, children and factory workers – all of whom are losing out because of Fairtrade. Not just Fairtrade, of course, but as the movement is becoming ever more pervasive ($1.1 billion worth of worldwide sales last year), ignoring it is no longer an option. So I’m going to try to persuade you to boycott Fairtrade too.
The Fairtrade movement has been immensely successful. Having grown and developed as a social movement since the 1960s, the international Fairtrade mark as we know it now was born in 2002. Since then, its growth has been huge – sales have grown tenfold in the
Fairtrade, as I’m sure you know, guarantees a minimum price, above the market level, to farmers. Given that coffee, by far the most common fairly-traded commodity, has such a low market price (it can be as little as 50 cents per kilo), this seems like it can only be a good idea. But many economists will tell you different. The problem is coffee grows almost everywhere. Huge swathes of the earth’s surface can grow the stuff, including many of the planet’s poorer countries.
This means that as and when the price of coffee increases, and coffee farming looks attractive compared to other jobs (if coffee farming is more profitable than cocoa farming, I may switch crops), more people can and will grow coffee. This makes the price drop again, as we’re faced with potentially massive over-supply. Coffee farmers won’t be rich until almost everyone else is.
Furthermore, let’s imagine you’re a car mechanic in
It’s not even a particularly good way to give: profiteering quite certainly occurs on the way. Fairtrade products are significantly marked up over their “unfair” counterparts. Indeed, it’s often the case that less than 10% of markup actually gets back to the producers: if I pay a 10p premium, only 1p of that gets to the farmer. I feel like I’m helping much more than I am.
There are more sound economic arguments about why Fairtrade is undesirable. It’s possible that as Fairtrade products become more common, it could actually cause the price of non-Fairtrade equivalents to drop: helping some in the third world at the expense of others, which would be a truly tragic situation. But there is a lot of scepticism around these issues, and it is seen by many campaigners as an ideologically-driven right wing attack on the movement.
So instead I will come to my real gripe with Fairtrade. It’s just not enough. Even if you believe Fairtrade is benefiting farmers and their families, it is making their previously intolerable lives only fractionally better. Good, committed activists, who once would clamour for political and economic change, instead promote Fairtrade products that mean pennies a week for the beneficiaries. This is a tragic waste of activism, drive and effort, and it is costing the third world dear.
Real change does not come about through what we buy, it comes through what we do. Could any of history’s real struggles have been won through consumerism? Would we have freed the slaves by buying wristbands? Could the civil rights movement been won by buying “black-friendly” products? Would we have lifted apartheid if boycotts hadn’t been matched by heroic worldwide direct action? I’m sure I’m not the only one who has my doubts.
There are real, potentially painful but eminently possible lines of action we can and should take to try to lift the shameful conditions in which too many of the world’s population lives. Investment in infrastructure, education and basic healthcare is sorely needed. The immense corruption which afflicts too many countries must, somehow, be dealt with.
Agricultural subsidies must be dealt with: it is unforgivable that, for example, we subsidise European cows to the sum of $2 per cow every day. This is not only a horrendous waste of money, but it allows European farmers to undercut their international competitors. We keep our (often immensely wealthy) farmers in business at the expense of their third world competitors.
Agricultural subsidies, though, lack the charm and simplicity of Fairtrade. Saving the world by paying more for your shopping is simple, seductive and we can understand how it works. Reforming agricultural subsidies is complex and painful – I don’t deny that it would result in many
The real solutions to these global issues are complex, and have consequences that will affect us in the west. Ultimately, we could all benefit from appropriate reforms and actions, but it would be folly to suggest these actions could be simple or painless. And this is ultimately why I so vehemently detest Fairtrade. I cannot help but feel it is far more effective at salving our consciences when it comes to the problems of the world than it is at solving them: “I’ve done my bit to help the third world – haven’t you seen the contents of my kitchen cupboards? What more do you want?”
This is an unfair charge to level at the real activists who push Fairtrade. I’ve met, and argued with, many of them. They are passionate and committed to finding solutions for third world poverty. However, this focus on Fairtrade misplaces their efforts, and diverts their attention away from pushing for real change. I am not naïve about such reforms: they would not be simple to achieve, but they are far from impossible. This is far from such pipe dreams as nuclear disarmament, or a Liberal Democrat general election win. But as long as the little attention most of us are willing to give to the third world is focussed on Fairtrade, real change is impossible.
That, such as it is, is the reason for my objection to the Fairtrade movement. It has nothing to do with free market fundamentalism, or a lack of sympathy for its motives: doing the wrong thing for the right reasons is still doing the wrong thing. As I am now forced to buy the wretched products when I go to my favourite café, I have resorted to other means of protest.
And so I urge you: next time you’re at the coffee aisle and your hand hovers over the Fairtrade coffee, step to the right a little and grab the Nescafe – if you can bear the taste, that is. Then sign up to Oxfam, research the issue a little, and write to your MP. You’ll not only help save the world – you’ll save yourself a few pence, too.
