CNN, newspapers, dinosaurs, and other things our grand-kids will never see

March 31, 2008

I’m tired of reading endless expressions of grief for the demise of traditional media. They are disappearing, but largely due to their own ineptitude. They were too stupid to recognize that an outdated distribution model has the potential to damage a business, especially if its customers consume the product with gritted teeth — there is a lesson here for the music industry and Microsoft.

Traditional media organizations in general, including television broadcasters, newspapers, magazines and radio, have failed to recognize that mass penetration of high-speed internet would ultimately result in the mass liberalization of news. We are no longer the prisoners of wealthy, elite and manipulative publishers trying to mold our opinions with subtle bias. We are free to verify stories ourselves, even go directly to the source if we wish. The rise of “the blogger” is primarily a reflex reaction to the deficiencies of a controlled mainstream press — a massive uncoordinated expression of disgust, if you will.

I still don’t think the powers that be truly comprehend the magnitude of this shift to decentralization in all aspects of our lives. We are slowly defining a new kind of city state, one that is not bound by geography; instead, communities are organizing through the internet to defend their common interests. In some ways, it’s the natural evolution of free-market capitalism. Just as the invisible hand directs the efficient allocation of capital, it also directs the efficient allocation of ideas. Bush, Murdoch and company are waging a losing war against freedom.

This is not something to be feared. Traditional media still has a role to play, but only if they return to their roots — honest and tough journalism. Mainstream media organizations as we know them today will not survive, central planning of anything ultimately results in its destruction — there is a lesson there for the Federal Reserve.