Saturday, September 19, 2009

Seminal work or sloppy thinking?

Jeff Jarvis has already ranked it as near "seminal" and reprinted more than 350 words of Paul Graham's Post Medium Publishing, so let me try and bring something different to the party: some examples of sloppy thinking and errors in the piece.

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.


  1. Anonymous6:46 PM

    Some fair points there, Howard -- except for the book one. Graham is talking about the price for the consumer, not the amount of money paid to the person who created the content. Apples and oranges.

  2. And my point is that the price to the consumer is a conscious, calculated strategic decision by publishers to maximize their return. It is *not* – as Graham naively asserts – a reflection of content value.

  3. This is a nice takedown of a trendy intellectual. Well done. @nickjungman

  4. Marcus9:58 PM

    1. Saying "actually cheaper" is not the point of the remark, it's just a secondary remark about the specific comparison case, the point is that populist and relatively crappy journalism has a comparable cost to to the consumer as high quality journalism. Durr durr.

    2. Everyone knows that big book deals are edge cases. Why are you arguing the outliers.

    3. You're answering the flowery anecdotal part of the essay as if it's a serious evidential point? I presume you don't ever use anecdotes in your writing. I hope not because all anecdotes by definition can be denied (i.e. what is truth? i.e. incompleteness theorem)

    4. You valiantly try to defend your position to the former commentator who points out that this is about cost to the consumer and eventual failure of a model that treats the content like print on a fabric. You're pointing out the very same thing that he's point out, that this is their strategic plan, and that is doomed. Sheesh, this is the part where your retort to his piece really crash and burns.

  5. @Nick I would hardly call this a "takedown".

    @Howard, good points but I can't help but feel that you're nitpicking at small things and ignoring the main focus of the entire article. People are not buying information in a physical form today as much as they have in the past. The point was that the people/organizations that find a business in the change/future will be a success.

  6. I don't love Paul Graham, but I don't dislike him either. There are nastier fish out there who will pour a foundation under the same rubric. Graham seems more interested by rousing enthusiasm, if campy. I think it's apropos to critique Graham's thought in the context of entrepreneurism, rather than intellectualism.

  7. Bill Goates7:56 AM

    Graham uses way too many words to state the obvious fact that the only way to make money on content is by controlling the delivery channel and charging for the use of it. But the points you make are either nitpicking or plain wrong.

    R1) His comparison isn't wrong, but his 'slightly cheaper' was wrong to say. But still his point could be valid, the price of content seems not to be related to the quality.

    You both seem to forget that the shop price is only a part of the total revenue, making the comparison useless to begin with. Also the statement that one is better quality than the other is highly debatable. It's like saying Lord of the Rings is better quality than Harry Potter because the latter is written by a house wife in her spare time.

    R2) Misdirection here. The fact that some authors make more money than others you explain yourself in R4, and has nothing to do with the point Graham is trying to make.

    But I am not sure Graham is right here, I can only speak about the Netherlands, but it's probably about the same everywhere else, but the price of books here are fixed for another reason. The extra revenues made on best selling authors are used to support smaller names.

    R3) Last years local Indian news paper will be 100% new to me, but still is last years news.

    R4) A complete mix of right and wrong. Your reaction that the price is a marketing decision confirms Grahams point. But Graham goes wrong about the music and movies prices. Unknown artists end up in bargain bins much faster, if not already starting at lower prices.

  8. Anonymous9:15 AM

    I think you make Graham's point for him in #2. There are vastly better thinkers and writers than Sarah Palin, but do the majority of them earn more for their writing?
    Content quality is NOT what is being discussed here.

  9. amerine, Marcos et al:

    I tried to avoid the "you're missing the point" or "nit picking" arguments by saying straight out that I understand AND AGREE WITH the main contention in Graham's post.

    But that doesn't excuse sloppy thinking or superficial reasoning.

  10. Anonymous 9:15 -- I specifically said "Better content (as judged by public taste)...." You can argue Sarah Palin isn't a good thinker (I agree). You can't argue that she does make more money on account of her content.

    Marcus -- sorry about misspelling you name above.

  11. As I said in response to the Robin Sloan post on Graham's treatise is a rationalization the "No one will pay for content" argument.

    The conclusion that lack of consumer demand is responsible for the fact that consumer revenue does not cover the cost of content ignores several other possibilities:

    1) Pricing laziness because as long as advertising revenues were growing no one cared.
    2) Ineffective marketing to increase subscribers due to relying on 3rd parties who spend their time selling the easiest title they represent.
    3) Lack of R&D to improve value to the consumer to merit a higher price and attract more subscribers because as long as ad revenues supported the business - it ain't broke.

    IMHO, the industry needs to refuse to accept the excuse that "no one will pay for content" and pursue bold improvement in value. Don't just change the medium, change the business model.

    Katherine Warman Kern