The Price of Everything - Eduardo Porter [67]
When Michael Jackson died on June 25 of 2009, his page on Wikipedia received 1.8 million visits. According to a study by the Associated Press, Google News and Wikipedia became the most popular sources of information about the pop star, respectively capturing 7.1 percent and 6.8 percent of all “Michael Jackson” searches in the four weeks to July 4. YouTube followed in third place. The only traditional media company that made the top ten was the Web site for CNN, in tenth place.
To compound the pain, the tide of online advertising that media companies had hoped for when they put themselves up on the Web for free turned out to be a trickle. Traditional media companies lost ad dollars to aggregators and, most important, search engines, which made billions selling ads alongside pages of search results that amounted to a list of links to articles in the traditional news media.
The information revolution didn’t make information free. What it did was transfer the money from the producers of information to the owners of the technologies that deliver it to their audience. The Pirate Bay, one of the world’s largest file-sharing Web sites, makes its money through advertisements. By forcing record labels to accept the low price of ninety-nine cents a song on its iTunes music store, Apple transferred much of listeners’ music budget from buying music to buying Apple iPods. And Google has absorbed a large share of advertising budgets that used to be dedicated to newspapers and magazines. In 2009, the total advertising revenue of the entire American newspaper industry added up to $27.6 billion, the lowest level in twenty-three years, 44 percent down from its peak in 2005. Google’s advertising revenues, meanwhile, jumped almost fourfold over four years, hitting $22.9 billion in 2009.
PROFITING FROM IDEAS
Ever since people first turned ideas into profit, they have clamored for protection from those who would copy these ideas without paying for them. In 1421, the Florentine architect Filippo Brunelleschi told the town notables in the Signoria that he had designed an enormous barge with hoisting gear that could carry marble up the Arno River. Il Badalone, as it was called, could satisfy Florence’s hunger for raw materials to build the Renaissance. But Brunelleschi only agreed to build it after the Signoria agreed to some conditions:
“No person alive, wherever born and of whatever status, dignity, quality, and grade, shall dare or presume, within three years next following from the day when the present provision has been approved in the Council of Florence, to commit any of the following acts on the river Arno, any other river, stagnant water, swamp, or water running or existing in the territory of Florence: to have, hold, or use in any manner, be it newly invented or made new in form, a machine or ship or other instrument designed to import or ship or transport on water any merchandise or any things or goods.” Any such new or newly shaped machine “shall be burned.”
Patents today are not quite as generous to inventors. An inventor who wants one needs to provide somewhat more detailed information about the invention. Well-designed patents aim to protect only the inventor’s specific new contribution—not bar others from making anything that might serve a similar purpose. But the logic of patents is not unlike that inspiring Brunelleschi six hundred years ago. They are meant to ensure that an inventor can reap the rewards from his invention so he will have an incentive to invent. They do this by awarding inventors monopoly rights to exploit their creations.
Patents are decidedly a second-best solution. In economists’ utopia, access to a good or service should be available to every person whose marginal benefit from