The Tragedy of the Commons - Examining the Free Internet

by hellea (student)

Media Economics – First Assignment – Helle Andersen N00216066 – Wednesday October 3rd

Media Economics First Assignment

The concept of commons was especially used in large areas of environmental science and the environmental movement, when Garrett Hardin in 1968 wrote "The Tragedy of the Commons". He created a very strong metaphor for how a common resource could be exploited and destroyed if individuals only pursue their private economic interests in the exploitation of this resource. Therefore, the commons concept and ideas of common ownership of natural resources was for many associated with a negative state and development, which could only be avoided by the creation of private property. In other words, if the individual farmer tries to maximize their usefulness, and they ignore and not expect to bear the costs incurred by their actions, this resource will slowly become over-exploited and slowly be destroyed. Hardin even goes so far as to call it an inherent logic of the system that creates the tragedy. It is also worth noting that he connects the commons concept to the concept of freedom. He believes that the character of the commons is an unlimited freedom for all that leads to destruction and ruin.

A Common Tragedy?

In 1964, the Canadian media philosopher Marshall McLuhan called the media an extension of our senses. Since then, its senses have become much more extensive. The 1980s and '90s brought something new. In that period, a completely new type of commons emerged, namely the Internet as a new information-common. And this new common did not have all the characteristics of common-pool resources. The exploitation of the resource did not result in competition between users, but created greater synergy and development of the resource. The more it was used, the greater the gains and dividends, all of it. Instead of a tragedy story, this was an example of a play with a common story.

Through the Internet, we have access to all sensors - from people's cell phone cameras to sharp images from the surface of Mars or satellite photos from outer space. Man is busy developing a set of technological senses that enables us to keep us informed about anything, anywhere, anytime. It is a crucial fact that those senses are common. It is - largely - available to all of us. We see reality through the same lenses, and inform us about the world of impressions from the same network of sensors. Internet serves as a collective memory, and in many ways even as a common brain, where millions of people and machines jointly calculate, process and sort information, and thereby creates collective learning and decision making. The awareness is quite different from the consciousness we each have. It's a layer on top of our normal, individual consciousness, an awareness we have in mind about what we are experiencing and doing fits with the common context.

Looking at the Internet as a new commons, it is a product that thereby created a new public space, where you get free access to all unlimited amounts of information about everyone and everything. The core protocols of the Internet is open and there is a strong open source/free software movement, struggling to keep as much of the Internet open to as many as possible.

The Internet has a special character as a commons that distinguishes it from the natural commons. A user need not to diminish someone else's benefit, as is usually the case with common-pool resources, which can lead to over-consumption and attrition problems. On the contrary, this commons (the Internet) means that the more people who use it, the better it becomes. Information often has the property that the more it is being shared, modified and used, the more it grows, and the better it becomes.

Previously, there has been agreement that ideas and facts should ...

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Previously, there has been agreement that ideas and facts should always be public and not be patentable. But today many large companies are trying to protect many types of data combinations. Where copyright rules were originally created to provide a livelihood for future innovations, they are today used more as a basis for the protection and creation of monopolies. Therefore, one can call into question whether the rules in a number of cases actually inhibits innovation rather than promoting it. Finally we see a widespread trend towards privatization and stronger control in the way that the original gift culture (that makes its information freely available) in some areas is increasingly replaced by a payment culture. But the Internet is not only threatened by private companies, but perhaps equally by governments wishing to protect against pornography, incorrect opinions and terrorism.

Free?

The Internet has turned the business logic upside down in a variety of industries - not least in the entertainment industry. When an old order breaks down, it’s creating a large number of short-term truths before a new order is established. This is the beginning of destruction and resurrection in which Chris Anderson has emerged as one of the most influential prophets.

He takes the theory further and manufactures the impact of digital distribution as a law: Because the cost consistent approaches zero, prices need to do the same. The future is free. Internet phenomenas are well known: Skype offers free telephony, Wikipedia free encyclopedia, Google free email - and then there are those who reluctantly have been forced to give their products away: newspapers, musicians, etc.

Anderson rejects that you get what you pay for. That was the 'old free', while the 'new free' actually comes free of charge. One of the most well-known examples of the old free was Gillette, who gave his razors away and in return created a billion dollar business on razor blades. This is how most people think about free: A free phone paid for with subsciptions, free shipping is paid by the higher price of the product. But the new free is different, there’s no charge when you use Facebook and Wikipedia does not cost anything.

Free is not a new invention. We know it from the supermarket where attention-hungry signs proclaiming 'buy one, get one free', and spruce sellers have used the free-trick for centuries. Usually the underlying premise is that a product is given away for free only to sell another, also called cross-subsidization. There is another free media form, where we as users for example can get free TV, radio and newspapers, which is instead financed through advertising. It is creative, but not a real business model. It is obvious that there must be some sort of income, but it does not mean that you as a consumer need to pull out your credit cards - unless you really want to.

What Is the Future?

But is the free model a good or bad thing? It is an economic force, it’s not a decision, but rather an underlying cost structure for digital goods. Free does have a downside, and there is a tendency that favors a few winner-takes-it-all companies that actually gets monopoly status in their field. Google has a huge infrastructure advantage, which means that they earn as much in one industry (search and advertising) that they can give their other products out free.

The free price has important implications for a number of industries that has had difficulty in finding their place in a cross-subsidizing economy, where you might have to make money on different things than what you previously could charge for. The music industry has gradually learned that revenue must come from something other than music sales, while newspapers are still completely at a loss. Journalists must see themselves referred to as supportive actors in a media landscape by amateurs.

The Internet has made it possible not only for the media industry, but for all kinds of companies to take advantage of the solution that a product is free of charge while it has the opportunity to put money somewhere else in the system. Anderson’s conclusion on the article is that it changes ”…the economy from a focus on only that which can be quantified in dollars and cents to a more realistic accounting of all the things we truly value today.” Focus will lie on firms' reputations and how known it is among consumers – The brand component.

Anderson would like to spread his thesis across the Internet to the real world. He writes that free in the last century was a marketing stunt (Gillette), but free in this century is an entirely new economic model. It's never substantiated, how this new economy takes shape, and the specific examples of free are all examples where you pay for something other than what you paid for before. After all it doesn’t look like a new economic model as much as a well-known stunt. As Garrett Hardin so elegantly puts it “Whenever a reform measure is proposed it is often defeated when its opponents triumphantly discover a flaw in it.”

The notion of free is a tragedy of the commons in newer times. Most things today are free and the new generation is already accustomed to that. However, this is not a sustainaible business model for companies, or users for that matter. Companies like Facebook and Twitter are struggling to come up with a strategy for monetizing the traffic. To keep up with their competitors and to satisfy their shareholders they need to change or progress their monetizing strategy significantly and fast. For Twitter, its strategic position is a company, which establishes an intermediary between buyers and sellers and therefore Twitter deals with two segments - its customers and its users. Twitter seems to struggle with the ability to not make their users feel that they are drowning in an advertising landscape but also to make them understand why twitter is a free service. Critics forget that when companies like YouTube, Facebook, Gmail and yes, even Twitter, provides free services available to its users, it is because companies want to earn money by displaying ads. The search for profit is nothing to be ashamed of, it's what drives all the technological developments and results in its many amazing products and ideas.

The future has no other way to go than back. We as customers and users, are still willing to pay for the things we want and like. The criticism about ads with online products and services only shows that we are willing to pay to get rid of the ads. Think of apps for smartphones. In most cases you can download a free version but you are constantly interrupted by insignificant ads. In most cases it will only cost you $0.99 to download the original version, which most customers eventually will do if they care enough about the product.

Tragic, tragic - but is there a way out of tragedy? Hopefully, you’ll have to say. We are becoming increasingly interdependent, as we are connected and influence each other more global and more direct. The individual and local interests will increasingly coincide with the community - and with communications technology using what would be obvious to everyone. In short: the individual and the common dimension are moving closer together. The distance is shorter between egoism and altruism, between me and we.