I was reading Malcom Gladwell review of Free by Chris Anderson and I was left with the impression that both of them got pretty wrong the issue of information distribution in the current era of low prices for computing power.
I think that Malcom Gladwell makes a mistake when he compares the information required for creating a bio-tech medecine (Myozyme) with the information found in a newspaper: one big difference between them being the penalties associated with copyright infrigement: huge in the case of Myozyme and small (and disappearing) in the case of the newspaper. Another difference between the information necessary for creating a medecine and the information stored in a newspaper is the difference between the costs of producing it and the related difference in supply: high costs in the case of a bio-tech company and low in the case of newspaper.

I think that Chris Anderson also makes a mistake when believing that the main costs which define how information is consumed are the costs of distributing information, distributional costs are just one part of the story, one other important cost would be the cost generating the content. Given that in the current period the distributional costs are very low, it would follow that the costs of generating the content would be the bulk of the costs of consuming information (i.e. the cost of consuming information would be identical or very close to the costs of creating the content). Basically what happens right now is that the supply for content is dwarfing the demand for it, we are simply swamped in content. Well, this mismatch between supply and demand drives down the revenues of content sources. In addition to this,  one side-effect of low distribution costs is that various content sources are put in pure and un-distorted competition and it is this competition that is driving even lower the revenues of various content providers.
It appears that the content sources that are not experiencing reduced revenues are the ones for which the content supply is very small when compared to demand (and which creates the scarcity which could allow a content source to charge for usage) and which are not experiencing heavy competition (some financial newspapers being a very good example). If anything these content sources have found in the web a new channel thru which to distributed their small supply of content. I would say that content sources which exhibit both a small supply (small enough to create scarcity), a reasonable demand and not a lot of competition will be the content sources which will be economically viable in the coming years (*).

The near future will be very challenging for the traditional newspapers, because the tremendous amount of excess capacity in this space will have to be reduced thru various means (**). Once reduced, the remaining capacity will probably be small enough to match the demand for the content it produces, and at that point various revenue models will appear. And charging for usage will be part of those revenue models, regardless of what various luminaries think about it.

To sum this post up I would say that the newspapers are in a pretty currently bad corner: the new low distribution costs have put them in fierce competition which resulted in massive excess capacity (***). The excess capacity will be dealt with one way or another and at the end of this process the remaining newspapers will come back to health.

Later edit: If you have read enough material on the changes currently affecting newspapers it is very likely that you have come across the concept of “economics of abundance”, a term used in science-fiction before the Web2.0 “revolution”. In the context of current changes in media “economics of abundance” is just another synonim of over-capacity.

* Incidentally, niche content sources fit this description pretty well.

** The excess capacity could be reduced by differentiation. One example would be New York Times rising the price for its street paper, which some argue that it pushes NYT into the category of luxury goods, differentiating it from the other news papers. Specializing in a new field is another way to direct excess capacity towards more productive uses.

*** The increased competition between newspapers comes from the fact that while previously the competition was mostly local between local newspapers because content distribution was mostly local in the current period the distribution is global, therefore more newspapers, from any conceivable place, are now competing for the same pairs of eyeballs. Right now the same news item can reach you thru a very large number of channels, while previously it could reach you only thru a few.
I don’t include the dozens of millions or so of blogs into the excess capacity mentioned above because blogs are not in the same league as newspapers, the differences in quality between a typical blog and a newspaper separate these 2 types of content.

You probably have read about how GMail added a new feature that lets you read messages written in a different language, language that you may not understand, by having them translated into your language. This is a pretty interesting feature that will not get much adoption outside Google labs, the main reason for this being not the quality of the translation (not great) but rather the fact most people need to initiate some sort of contact in order to start exchanging emails.

All this aside, it is a pretty interesting proposition from Google and leaves you wondering about how would a group of persons that communicate with one another by using the translator package just added to GMail outside GMail, let’s say in a face-to-face environment (let’s say a group of experts from various places , all speaking a different language attending the same conference). Would they be emailing each other while seated at the same table, given that they do not speak a common language (*)?
A pretty weird feeling is setting in: you may end up having relationships with people only thru this virtual medium which negates all other forms of communication. The language barrier will be replaced by an expressiveness barrier: many things will not be able to be expressed thru this medium and will be left-out.

* BTW, the message used in the TechCrunch example is a very good example of a message that would never get translated because it would never be written in a different language: if you want to invite a hiking buddy out for a walk you would probably want to be able to communicate with him/her in a commonlanguage, not thru the GMail translator… I wonder what a walk thru a park is like when you need to drag along GMail (preferably deployed on your iPhone) in order to talk to someone. Surreal…