Umair Haque / Bubblegeneration

Monday, July 11, 2005

How Not to Think About Media 2.0 - Making Markets and Goatse

"...It might take only one faked film, one bogus report to weaken the bond of trust, and, conversely, one misedited report or misused image to make individuals wary once again of trusting their material to television or newspapers.

...there is an ocean of difference between keeping open a space for your audience to participate in and allowing anyone to trash your journalistic brand."

Actually, no. One is the flipside of the other.

Think about it this way. Markets are gigantic decentralized info processors, which are hyperefficient under certain conditions because the price mechanism aggregates distributed information incredibly cheaply and fast.

Now, peer production communities combine the DNA of firms and markets. So, in the same way that one counterfeit note/ponzi scheme/shady deal doesn't send the financial superstructure crashing down around us, a fake video/image/report will not - repeat not - kill a pp community.

The principle is the same - in either case, one party is trying to take profits through the other party's imperfect information. But that creates the incentive for someone else to arbitrage the first guy, by fixing the information asymmetry.

Sound familiar? It should - if enough people try and arb each other like this, you have a liquid market and a working price mechanism. This is exactly what you want to happen. That is, counterfeit notes/ponzi schemes/etc are signals that the market's working efficiently - if it wasn't, they couldn't exist.

Put another way, market failure is a very different phenomenon - it's about externalities, public goods, blah, blah - the dynamics we're talking about here are exactly those that make markets work.

Let me use a *totally* asinine example, to make the point extra clear: goatse. Goatse is offensive, sure, but it also serves a powerful signal of the quality of conversations across the micromediaverse. Strategically, you don't want to avoid goatses, like the LAT did - if anything, you want the opposite. You know your market's beginning to work when the goatses start pouring in, because goatse is one one kind of currency that's traded across micromedia communities with liquid and efficient knowledge markets (offensive as it may be).

Now, what I find fascinating is that there are three, maybe four places in the world right now that really understand this - the Valley, Korea, Japan, and maybe the Beeb...but definitely not traditional European media players.

-- umair // 12:45 PM // 0 comments

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