Information Asymmetry — How Lemon Markets Work, and Why Good Journalism Is In One
High quality journalism is suffering from information asymmetry for the consumers, in other words, it is in a lemon market and there is no good way out, unless an innovative business model, pioneered by a startup or from within the publications is able to surface. This is a Nobel Prize winning research — so I encourage you to Google it.
Here is how the online content lemon market works
There is sufficient bad/not-good-enough writing online (even from reputable publications) that it drives down the expectations of the consumers. So a reader’s best guess is that the content is of average quality, no matter the publication behind it. The price which such a reader is willing to pay for average content on the Internet boils down to 0.
This then drives out the high quality journalists who find that their better product (higher quality writing) is not getting a fair value they expect.
This then leads to even more lower quality writing available, which further revises the consumer expectations downwards. The bad drives out the good — and this is bad for all.
New ideas, startups who see this problem and can bring about clever solutions.
Perhaps Medium does something interesting with getting newspapers on to its platform, aggregating and charging consumers based on writer/individual content pieces instead of publication ?
And then there is Blendle — charging few cents per article and trying to replicate the experiment for English-language news publications in the US, what it did for Dutch ones before in the Netherlands.
Today, I sent this to the first beta users that signed-up to Blendle, my journalism startup backed by The New York…medium.com