Tinkers, Tailors, Sellers, Spies

The case for cautious optimism about the Internet.

Jesse Walker from the December 2000 issue

(Page 3 of 3)

The economics of the Web are such that it's very cheap to start a site but tough to make money with it. The medium is therefore biased toward amateur, noncommercial projects. (The most popular online activity-e-mail-is also the most amateur and open.) Apart from The Wall Street Journal and the larger porn operations, the most successful commercial sites are usually low-budget, small-staff operations without much overhead; they are either independently owned (like WorldNetDaily) or owned by larger companies with enough sense to leave their subsidiaries alone (like Suck). Heavily funded corporate sites generally finish last.

McChesney himself notes that "most of the Internet activities of the traditional media firms have been money losers, and some have been outright disasters." If anything, this understates the case: Most heavily capitalized Internet media projects have been disasters, whether or not they have a traditional media firm behind them.

In July, APB News, a useful site devoted to police reporting, laid off its entire staff -140 people-and turned over operations to a small group of volunteers; it probably would have closed its doors entirely if SafetyTips.com hadn't bought it a month later. Salon, perhaps the best-known webzine, continues to lose money and to lay off workers. Pop.com, a multimillion-dollar entertainment site backed by Steven Spielberg, Jeffrey Katzenberg, and other major Hollywood figures, collapsed without putting anything online, except a handful of press releases.

The most thunderous crash so far is that of the Digital Entertainment Network, a heavily hyped webcasting operation. Matt Welch, a survivor of DEN's descent, wrote an engaging and witty memoir of his time there for the Online Journalism Review (ojr.usc.edu). After reading his account of that particularly dysfunctional-and well-funded-corporate hierarchy, you won't just understand why it flopped so spectacularly; you'll wonder why the collapse took as long as it did. "Web sites looking to make real money," Welch concludes, "need to A) be Yahoo, B) sell porn, or (best of all) C) start small, and win a following. There's a dirty little secret about content companies: popular, scaled-down sites like Suck, CapitolHillBlue, and TheSmokingGun all make money, as in that stuff left over after all the bills are paid. Meanwhile, heavily staffed, venture-backed heavyweights like Salon, TheStreet. com, and APBnews are bleeding money like hemophiliacs."

McChesney, starting with the same observation, ends at a radically different conclusion. "But none of the media firms have [sic] lost their resolve to be a factor, even to dominate, cyberspace," he writes. "The media firms have a very long time horizon and very deep pockets. ...Indeed, by the end of the 1990s the possibility of new Internet content providers emerging to slay the traditional media appears more farfetched than ever before."

The scaled-down sites that Welch mentions don't factor into McChesney's analysis. Neither do nonprofit, volunteer-run alternative outlets like the Independent Media Center, which neither needs nor tries to make money. But they seem to be getting more out of the big media companies' investments in cyberspace than those companies themselves, playing in the ruins of failed corporate experiments. (Indeed, the Independent Media Center-a loose network of 29 audio/video/text production centers around the world-has grown at a pace that most for-profit Internet enterprises can only envy.)

The best proof that independent media thrive online is the series of stories that have emerged on the Net while the major media initially ignored them. The most obvious is Monicagate, broken by The Drudge Report while Newsweek waffled over whether to publish anything about it. If that doesn't impress the leftist McChesney, perhaps this will: The story of purges and possible corruption within the left-wing Pacifica radio network, for years ignored by most of the ink-and-paper press, was extensively covered and debated online, building a base that made 1999's demonstrations, lawsuits, and other revolts at the Pacifica stations possible. Given that McChesney spends a chapter bemoaning the commercialization of public broadcasting, he should be impressed that the foes of that process have found the Net as congenial a home as the foes of the Clinton administration.

Somewhere between the first draft of this essay and the last, Douglas Rushkoff revised his views yet again. "I have become so anti-corporate," he wrote in the London Guardian last August, "that I do not mind exploiting them as much as they think they are exploiting us. They mean to take as much as they can get from us, so what is so terrible about our taking whatever we can from them? In other words: Why not let big business build our internet?" Corporations are sinking millions into the Net, he notes, yet few have figured out business models that work for them. Meanwhile, "at least some portion of the countless investment dollars...is going towards building the infrastructure itself."

In short, "Thanks to the shortsighted, profit-driven motives of mindless corporations, the internet is cheaper to use, more widely available, and spreading faster than ever before....Let's milk every last drop from the corporate cows before they figure out they've been nourishing an infant who means to swallow them whole." And so Internet apocalypse meets Internet utopia, and the two visions turn out to be not so distant after all.

I'll try to steer clear of Rushkoff-style overstatement-I'm not sure we're about to see cows entering the mouths of babes. But if cyber-utopianism can be silly, cyber-optimism is certainly sensible. The Net is an increasingly open territory, impervious to the carefully drafted plans of governments, service providers, well-funded Web sites, record companies, and both radical and establishment critics. As long as that's true, innovation and self-expression will thrive online.