Graham: A copy of Time costs $5 for 58 pages, or 8.6 cents a page. The Economist costs $7 for 86 pages, or 8.1 cents a page. Better journalism is actually slightly cheaper.
Reality: A pointless comparison. Time also costs $5 when it is 86 pages, which would be 5.8 cents per page. When The Economist is 58 pages, cost per page is 12 cents each.
Graham: Book publishers "treat the words printed in the book the same way a textile manufacturer treats the patterns printed on its fabrics," meaning content does not differentiate price.
Reality: Famous, popular authors make LOTS more money than others. Laura Bush got $1.7; by some reports Sarah Palin got $7 million. Graham's contention is just plainly wrong.
Graham, on offering someone his copy of the New York Times: "Do you, er, want a printout of yesterday's news?" I asked. (He didn't.)
Reality: Calling the NYT "a printout of yesterday's news" is snotty and snarky, to be sure, but it's also inaccurate. I'll bet the ranch that there were 50 substantial items in the paper that the person had never seen, and wouldn't encounter otherwise. That's news. Graham's insult is correct only if he thinks only generic facts and events are "news." That's a small fraction of what the New York Times presents every day. Dismissing the whole paper as "yesterday's news" is misleading wrong.
Graham: "If the content was what they were selling, why has the price of books or music or movies always depended mostly on the format? Why didn't better content cost more?"
Reality: Better content (as judged by public taste) PAYS more, EARNS more and SELLS more because more people buy it. The decision to price all movies or CDs about the same is a marketing decision that says absolutely nothing about the realative value of the content. Graham needs some elementary economics and business instruction.
(I wonder if a good book about LISP will earn its author more than a bad one? Bet it does.)
I'll close by noting that I have insisted for years that selling content was never the real business model of the press. I agree with Paul Graham and Jeff and many other media thinkers on that point.
But if I hadn't believed it before I started reading, I certainly wouldn't have found Graham's argument persuasive. I have too little respect for shallow reasoning or sloppy conclusions.
UPDATE: Also have a look at Robin Sloan's thoughtful critique of Graham, particular his arguments about iTunes and the App Store.