Legend has it that when Cortes landed in Mexico in the 1500s, he ordered his men to burn the ships that had brought them there to remove the possibility of doing anything other than going forward into the unknown. Marc Andreessen has the same advice for old media companies: "Burn the boats." Yesterday, Andreessen was in New York City and we met up. We got to talking about how media companies are handling the digital disruption of the Internet when he brought up the Cortes analogy. In particular, he was talking about print media such as newspapers and magazines, and his longstanding recommendation that they should shut down their print editions and embrace the Web wholeheartedly. "You gotta burn the boats," he told me, "you gotta commit." His point is that if traditional media companies don't burn their own boats, somebody else will. – TechCrunch
Dominant Social Theme: You will do better and make more money when you adapt to the Internet. Jump in!
Free-Market Analysis: This is a very interesting article at TechCrunch that we have excerpted above. Marc Andreessen is an amazingly bright mind, obviously a genius of sorts, and the inventor of the world's first web browser back in 1993. His perception that the mainstream media is stuck in an old-fashioned paper-and-print rut runs parallel to our own perceptions that the mainstream media is having a difficult time adapting to the Internet even now. Here's what Wikipedia had to say about Andreessen:
Marc Andreessen (born July 9, 1971) is an American entrepreneur, investor, startup coach, blogger, and a multi-millionaire software engineer best known as co-author of Mosaic, the first widely-used web browser, and founder of Netscape Communications Corporation. He was the chair of Opsware, a software company he founded originally as Loudcloud, when it was acquired by Hewlett-Packard. He is also a co-founder of Ning, a company which provides a platform for social-networking websites. As of June 30, 2008, he is said to be joining the Board of Directors of Facebook. On September 30, 2008, it was announced that he had joined the Board of Directors of eBay, and September 17, 2009 it was announced he had been named to the board of HP. Andreessen is a frequent keynote speaker and guest at Silicon Valley conferences.
Because Andreessen is so obviously brilliant and super-sophisticated when it comes to the Internet, we were very pleased to see him making a point that we have presented to our readers numerous times: That the mainstream media has yet to adapt to the 'Net's fundamental challenges. Where we depart from Andreessen's perspective is not in the observation of the difficulty which is clear, but in the REASONS for it.
Our take is that the 1900s were an era of manipulated news scarcity, and that the mainstream media has not been able to replicate this scarcity in the 2000s. In fact, the 2000s constitute an era of news plenty. Thus, people will NOT pay for the content of the New York Times or Washington Post when they can simply go somewhere else on the Internet and get similar information without charge.
Rupert Murdoch is kidding himself, we believe, if he thinks he can rewrite news articles, put them behind a pay wall and expect to generate significant value. People likely will not perceive it has value worth paying for. The Internet CAN function on a pay-for-publication basis, but only once people are convinced that the information is credible and trustworthy – like our fee-for-service publications, such as Swiss Confidential (we just couldn't help ourselves). Mainstream media is having trouble "up-selling" readers to the next level (a paid one) because people don't trust the initial gateway.
People on the Internet these days – especially savvy consumers who will spend their hard-earned money purchasing information as they choose – know when they are being lied to. They have a frame of reference now. And this is the real problem the mainstream media has. The mainstream media in the 20th century became co-opted by the power elite and remains so today, which greatly restricts the ability of the mainstream media to report truthfully – or to respond to people's wider frame of reference.
We recently explained PC thinking in terms of power elite memes – the self-censorship that people perform tends to track elite promotions. The same goes for news. Whole libraries have probably been filled defining the "mysterious" manner in which news choices evolve. But the reality is simple. Mainstream news and information – and even its dramas and comedies – promote dominant social themes. Often they do so using a Hegelian strategy of thesis and antithesis.
One can see this, for instance in America, among cable news channels where MSNBC presents a mostly statist perspective while FOX presents a perspective that is somewhat less so. But even at FOX, the presentations do not run counter to America's growing security state. All mainstream Western news (both in Europe and America) reinforces statist attitudes – and the necessity for the state and its control – one way or another.
This is why we think even the brilliant Andreessen is not entirely correct in his assumption that the mainstream media can move aggressively to Internet dissemination. Mainstream media's eroding advantage lies in clinging to the remaining advantages of its 20th century "news scarcity" model. This is where its profitability remains and where its credibility is still extant. On the Internet, there is far less profit for mainstream media to make (with its 20th century style overhead) and its credibility is far less powerful.
The reality of the mainstream media is that it is meant to reinforce power elite themes. But the alternative media, which is not, has millions of readers. Therefore, it is too late for the power elite to stop the spread of "truthful" sociopolitical and economic information – much of it free-market oriented. Additionally, technology is moving so rapidly – and the Internet is so intertwined with people's consciousness and with corporate business strategies – that radically pruning the 'Net through selective censorship will be most difficult. At some point such efforts (which are certainly underway) may run into a judicial standoff. The resultant publicity may make further attempts ever more problematic.
Andreessen believes the mainstream media is somewhat technology-phobic. But in fact it is probably a much larger and more terrible problem. By purveying lies, mainstream media has forfeited the trust of its audience. And today, like Macbeth, it lives with the consequences. Macbeth's wife, remembering murder, constantly washed her hands. The mainstream media, aware of its plight, is constantly wringing its hands. But it will take more than an electronic migration to fix what has gone wrong.
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