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We spend more on ‘free’ information than we spend on food

By Joe McKendrick | January 22, 2010, 2:10 PM PST

Nick Carr, author of the perception-changing books Does IT Matter? and The Big Switch: Rewiring the World, from Edison to Google, always has fun shattering conventional wisdom. And in a new post, he takes on one of the most conventional pieces of wisdom around today: that we are awash in “free” information.

His take:

Never before in history have people paid as much for information as they do today. I’m guessing that by the time you reached the end of that sentence, you found yourself ROFLAO. I mean, WTF, this the Era of Abundance, isn’t it? The Age of Free. Digital manna rains from the heavens. Sorry, sucker. The joke’s on you.

Do the math. Sit down right now, and add up what you pay every month for:

Internet service

Cable TV service

Cellular telephone service (voice, data, messaging)

Landline telephone service

Satellite radio

Netflix

Wi-Fi hotspots

TiVO

Other information services

So what’s the total? $100? $200? $300? $400? Gizmodo reports that monthly information subscriptions and fees can easily run to $500 or more nowadays. A lot of people today probably spend more on information than they spend on food.

Perhaps the New York Times, mulling a pay-per-read model, has been thinking about people’s willingness to shell out plenty of dollars, euros, pounds, and rupees to immerse ourselves in the information stream. And we’re talking about average families, Joe/Jane Sixpack and kids, spending $500 a month — unimaginable even a couple of decades ago.

As Carr puts it: “we place a high monetary value on the content we receive as a result of those subscriptions and fees.”An interesting analogy pops up in Nick’s post — it’s similar to our willingness to pay for all-you-can-eat buffets.

But, again, we’re spending more on information than we spend on food.

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About Joe McKendrick

Joe McKendrick is a contributing editor for SmartPlanet.

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RE: We spend more on 'free' information than we spend on food

This article is amusing but true for most. A lot of people don't
realise that these things overlap.

I haven't owned a television in a year, since I realised we hadn't
turned it on for two years. My phone is MagicJack, ran through the
DSL connection I have. The backup cell phone is prepay and costs $25
every three months.

My radio comes from shoutcast, television from Hulu and other sites.
And I don't pay for the other stuff.

So my total information bill runs about $60 a month - a bit less than
what I spend on groceries happy

Interesting article tho!

Posted by lyndaj70@...

11th Feb 2010

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RE: We spend more on 'free' information than we spend on food

Info is money, therefore spending money on info is actually an investment to earn money and buy food happy

Posted by marceloedrei

25th Jan 2010

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RE: We spend more on 'free' information than we spend on food

And money is information. People find out what you spend and on what and use this information to get other information. Seems like a never-ending cycle to me.

Posted by jwurster

25th Jan 2010

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A Crass Comparison

I think if a family is spending less than $500 per month on food, they probably don't have satellite radio and likely don't have pay TV. Exaggeration can be an effective way of selling a message, but your message has to be rock solid to really pull it off. I think there's a community of digital thieves who believe that information (in the form of music, books, movies, etc.) is free, but most of us are fully aware of how much we spend. I think this would be especially true for families who have less than $500 to spend every month on food. Nick Carr's post is a bit too crass for my taste.

Posted by stancube

25th Jan 2010

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RE: We spend more on 'free' information than we spend on food

We are not spending the money on the information but are spending the money on access to the information. Given that there is so much being charged for access - there is little room for extra charges for the information itself. Why do you think that subscriptions to news services haven't become huge.
It also explains why people think that pirating music and video over the internet is OK. They believe that they are already paying enough just to get access.
Information providers - you have missed the boat. Unless you learn to wrest control of the access point (where people are already spending the money), how can you expect to succeed. People already believe that they are paying for your product even though you never get the money from that transaction.

Posted by inmarket

25th Jan 2010

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There's too much overlap

The problem is that there is a lot of overlap. A lot of it is to provide internet service to different devices, or else to play the same media on different devices. At some point all these different types will have to coalesce, because people are not going to pay for the same stuff over and over. Why, for example, should I pay separately for internet service from a cell provider on different devices when I can only use one device at a time?

Posted by zackers

25th Jan 2010

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RE: We spend more on 'free' information than we spend on food

The comparison just doesn't work in the real world.

Most of these things are bought at package rates, say satellite tv (replacing cable), landline, cable, cell and internet access included for, in my case, $135 a month.

Satellite radio is for the car as long as that service remains commercially viable which seems highly questionable. Netflix and TiVO? nada. Soooooooooooo 2002. happy

Of course, there's also the fact that this calculation appears based on the overly expensive access rates paid by folks north of the Rio Grande when world wide service access fees are far lower.

Still, expanding this out to cover things lke the New York Times wanting to stick up a pay wall and that it might work this time ignores the perceived value of the services and subscriptions we may have.

The Times wishes to stay a general newspaper of record like the Times of London and that requires readers. It's the readers who will react to the paywall and the information behind it. Almost always available somewhere else, I should add.

This is unlike the Wall Street Journal's pay wall which the narrow audience the WSJ aims at may be willing to get what the pay wall offers and consider it of value. Of course News Corp isn't likely to declare it a failure given Rupert Murdock's attitude about "free" these days.

Nick Carr and you, fail to look at the perception of value for money and I submit that the Times won't have that where the WSJ just might. (But only just might, mind you.)

The other side of the coin is that we are, in fact, awash in free information it's the access to it that we need to pay for. Nothing at all new there from the days of print when we needed to buy the books or visit a library some benefactor or the taxpayers built.

You're confusing access to the information with the information itself when they're two different things. The access has always had a cost where the information itself has often been free. (See Public Domain)

ttfn

John

Posted by TtfnJohn

25th Jan 2010

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Only because we want to, and food, in the West, is cheap.

My communications costs are ~$70/month.

The problem is that we have more "information" then ever before, and less and less of it is unique, and much is untrustworthy.

Working in a small think-tank with limited funds, we learned to vet the information carefully, and examine it for reasonableness and ulterior motives of the source.

So much media today feeds upon itself, that the same one-source story may show up in a dozen or more reports--none of which have bothered to verify the facts.

A notable instance is the recent "error" in the climate report stating that the Himalayan glaciers may be gone by 2045. A report which propagated through the data stream and ended up in the final report w/o being vetted. Is it an "error?" Fact is, we won't know until 2045. Given the failed predictions of glaciologists regarding other glaciers (the glaciers feeding La Paz, Bolivia are gone 5 years after a prediction that they would only last 15 years,) perhaps the "error" is a fact.

Too much information leads to too little attention being paid to that information.

Our tiny think-tank has an 80% accuracy record in predicting economic, political & military events...we've done as well as operations with many more times our budget and staff, in large part because we are careful in accepting new information, and in analysis of the possible motives of those releasing information.

The old intel game of falser, misleading and other disinformation moved into the public realm long ago, and information often as meaning unrelated to it's content,

It's been said that we used to spend our time looking for information, now we spend our time trying to figure out which information has meaning.

The true cost of the information is in the time it consumes in determining it's meaning. You also pay extra for early delivery, but that may or may not be a requirement for use of the data.

Do I NEED to watch the State of the Union address live?

No. There is unlikely to be anything in the speech which will so drastically affect my life that I need to know it now.

I don't (and you probably don't either,) NEED cable, sat radio, cell phones, twitter or the other "instant" information sources. For most people these things are not information, they are ENTERTAINMENT. Desires. Wants. Not needs.

Much premium information access is based upon TIME. The assumption that knowing a fact before someone else has value. Sometimes it's true. And for some professions, it's very, very valuable. A day trader w/o good access to immediate news is unlikely to do well. A long-term investor doesn't need that sort of immediacy. The average Joe needs it not at all.

By the same token, the average Joe here in Northern Wisconsin has known that the economy was in the pits since 2000--it was only the financial "experts" who were surprised by the crash in 20008, and it is only they who will be confused that the world economy doesn't recover for another 5 years or more. Scary since some of those "pros" make more in a year than my entire county.

The climate "experts": are constantly "surprised" by how rapidly things proceed to change in the polar regions--but anyone familiar with the non-linearity of the real world should be unsurprised.

Truth is, there's significant money=power to be acquired by convincing people that change is either faster or slower than reality.

Many climatologists are still saying 1m sea level rise by 2100. Others have cautiously said 1m by 2060.

My analysis says we have at most 20 years before we suffer a 1-10m rise. And I expect 1-5 meters between 2013-2019.

Yet I also expect there to be a huge amount of money spent to try and protect major cities which, in the long run, cannot be protected. New York, London, San Francisco, L.A.,, Venice and many others are so located that unless we find a way to rapidly slow, halt or reverse current climate trends, they cannot be saved.

Information is cheap. Vetting it is not. Acquiring it ASAP is expensive.

But most information, for most people, most of the time, is simply entertainment.

Charles Barnard, Sr, Analyst
The Cepia Club
www.cepiaclub.com

Posted by wizoddg

26th Jan 2010

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RE: We spend more on 'free' information than we spend on food

Interesting article tho!

Posted by lyndaj70@...

11th Feb 2010

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