Author and cartoonist Tim Kreider neatly and wryly sums up everything you need to know about what’s wrong with the digital-age economy in this editorial that appeared in yesterday’s New York Times. Kreider covers many bases, including a nod to the oft-overlooked factor in the economic calculus of the male author — that money is merely the conduit between the work of writing and getting a date. So, this is just another aspect of real life that “new-model” cultists absolutely don’t understand.
In all seriousness, though, anybody who works professionally doing anything should read this OpEd, not merely for what it says about the devaluation of the creative worker, but for what it implies about the devaluation of all human endeavor. What Kreider is really calling attention to is how the digital age has normalized the expectation that he, or any other artist, should be happy to work for free. And it is that cultural shift that ought to concern everyone because the free-labor attitude may be coming to a job near you.
“Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again.”
I remember telling a corporate client years ago that over time websites would begin to be treated as niche TV channels. Video communications would complement or replace written word content, and static websites would give way first to the opportunity and later to a demand to program new material on a regular basis. Of course, I was trying to sell this client production services, but I did believe what I was saying would come to pass for many entities. Today, video on the web has obviously expanded dramatically although it is still in its relative infancy. For many viewers there is now little distinction between TV viewing and WebTV viewing, and the younger the audience, the more viewing tends to be web only and on devices other than television monitors.
In this recent article on PaidContent, Jeff Roberts reports on traditional print publications trying to figure out the formula for successful use of video on the web. Highlighting the Wall Street Journal and Conde Nast, Roberts discusses the prospect of these major brands taking a bite out of the rich advertising pie that historically belongs solely to television. These publishers hope to attract sponsors on the strength of their brands and are investing in new video programs and hiring production professionals to grow marketshare in this space.
On the one hand, as prefaced, this is an inevitable development now that streaming video is high quality and digital production is an affordable add-on to a media organization like a magazine or newspaper. In principle, an in-house staff of fewer than five people can produce a steady stream of solid video entertainment or news content. And if the programming complements the brand, then viewership should increase and sponsors will follow. The right mix, however, is essential, and I suspect it will be inherently harder for some producers than others to grow a whole new appendage into the world of television production.
It’s pretty easy to imagine a loyal reader of the WSJ becoming an equally loyal viewer of its videos. The WSJ provides a very specific type of content for a well-defined audience, one that likely considers consumption of its daily fare a necessity more than a luxury. But the more video content can be described as optional entertainment/information, the more competition it has — not just with similar TV programming, but with EVERYTHING.
It is already well understood that competition for consumer attention is now geometric. Any bit of content, from a multi-million-dollar TV series to a blog to a meme, vies for “eyeballs,” as the marketing wonks say, on a theoretically even playing field in a world of devices that are always on and connected. In short, because distribution of nearly everything is nearly everywhere, all media compete 24/7 for any prospective viewer’s still-limited time. And, of course, as volume increases, as more brands produce more content, the competition for viewer time increases as well. What has always been true will remain true — the most popular stuff will win, and the less popular stuff will disappear. That said, in the digital age, popularity can be very fleeting, and this is not how brands build relationships with customers.
In theory, content doesn’t have to be as popular on the web as it traditionally does on television. 1,000 legitimate customers of a sponsor are more valuable than 10,000 viewers who will never be customers, and in principle, branded, online entertainment helps sponsors connect with those legitimate customers and even occasionally sell to them via point-of-purchase opportunities. Done right, web-based entertainment eliminates some of the waste in traditional TV advertising, but this concept is also why a great deal of branded entertainment is occasionally just this side of an infomercial. Harkening back to the earliest days of single-sponsor television shows, branded online video often features the sponsoring brand or products as a subject or character within the program itself. This can be a tough needle to thread in the hope of attracting an audience that wants to be entertained and not sold. Hence, one of the most popular formats for branded online video is the news-magazine. This format is cheap and fast to produce, and the non-fiction content easily suits certain sponsors without creating a disconnect for the viewer. For instance, it feels perfectly natural for Nike to sponsor a news-magazine series profiling athletes.
With the right combination of elements, branded entertainment can be a perfect opportunity for some clever production people, the newly developed network, and the sponsors; but as the overall market divides, replicates, and expands, I suspect getting that combination right will be trickier simply because the market becomes so saturated that brands are competing for incrementally less available attention from their prospective customers. At the same time, both viewing habits and the technologies used to consume media are dynamic; and these factors actually dictate the style, format, and length of programming. If the viewer is on his couch at home, a full-length show might be what he wants to see, but if he’s killing 20 minutes during a lunch break, he might be more inclined to watch a bunch of short comedy sketches produced by College Humor. So, despite the ubiquitous nature of web distribution, brands still do have to consider where their customers are when investing in new video programming. In this sense, it’s actually a lot more complicated than knowing the target demographic is in front of the TV at 8pm on Thursdays to watch a hit show.
Ultimately, it will still come down to the bottom line, meaning sales for sponsors. Since the early 1990s, the level of experimentation, theory, and faith in pure smoke vis a vis the web has been consistently high, even as the theories and lingo continue to change. You can sell a term like “engagement” to a marketing guy, but not to CFOs, who decide how to spend the money. Clicks and shares of entertainment media are not the same as sales and and really not the same as building a relationship between a brand and customers through entertainment. Additionally, some research indicates that building brand loyalty in the Internet Generation is harder than a pre-digital-age market.
Oddly enough, I actually pitched the idea of creating a “TV” arm to a magazine once, so I’m a believer in the overall concept. But as high-end TV entertainment on the web becomes increasingly more common, as more producers jump into the game, more brands experiment, and YouTube tries its hand at acting like a traditional media company, I believe we’ll see a massive expansion of production followed by a necessary contraction because even a global market of viewers can only support so many professional producers. Even as YouTube delves into the area of paid subscriptions, it is unclear first, whether or not consumers are already saturated by subscriptions to entertainment networks; and second, whether the producers of these shows can actually make a living in any of these models.
Once the line between web and TV is entirely erased, I suspect there may be a flattening out in the volume of professional production consumed. If, for instance, Conde Nast’s Traveler becomes a competitive network with The Travel Channel, this does not mean the target audience for travel content will then support a third, a fourth, and a fifth network producing the same kind of material. Consider the number of cable channels you have, add to it the number of web-based portals you use for music, TV, or film, and consider how much of that total universe you have time to access. It is entirely possible that millions of us are still consuming the same hundred or so popular products and that broad demographic data still applies to marketing for sponsors. And of course, from a cultural standpoint, as these venerable publishing brands branch out into TV production, we must hope they don’t fall into whatever molecular altering dimension that allows a network with a name like The Learning Channel to produce Honey Boo Boo.
When a solid, honest business loses relevance due to changes in technology, then it can fairly be said to be a casualty of progress. Such is the case for my dear friend Tony Tamberelli, who very recently shut the doors at Tamberelli Digital, a camera and lighting rental service in Manhattan. Tony was just about the first professional with whom I did business in the New York market more than twenty years ago. At that time, Tony was still managing a rental services business in New Jersey and hadn’t started his own shop yet, but his career included work for several of the major houses in NY and LA, and he was one of the most experienced guys in rentals. He is also one of the nicest, which was no small thing back in the late 80s and early 90s. Back then, when the available cameras on the market were packages with a retail value of well over $250,000, the guys (and I do mean guys) at the rental shops were not exactly receptive to calls from anyone who sounded like he might not know what he was doing. It was not uncommon to hear an impatient voice at the other end of the line that suggested, “Prove to me you’re not a schmuck, and I’ll consider renting to you.” But not Tony. The first time I ever called him, I had plenty of dumb questions, and he couldn’t have been friendlier. And over the subsequent two decades, I never rented from anyone else in the NY market.
The truth is that the writing was on the wall for sometime for Tamberelli Digital, and it is a textbook case of a business failing due to inevitable, technological progress. Without going into the complexities of operating a rental shop, suffice to say that the core products for rent, cameras, have changed in two dramatic ways. First, the quality of the image one can capture with a $5,000 camera in 2013 is hundreds of times better than what we could capture with a quarter-million dollar camera in 1993. Second, there are about eight major manufacturers at any given moment producing a new product that has anywhere from several months to a year before a competitor produces something the market wants more. So, it is very tough to know what inventory to keep on the shelves, and at the same time, many of us who use these cameras own at least one or two, and therefore rent less frequently or not at all. Meanwhile, the overhead required to maintain a rental business, particularly in Manhattan, is extremely high. And finally, thanks in part to the illusion that digital production costs less, which it does not, macro forces in the market have driven rates downward while costs of operation (or living) have continued to rise. So, that’s the snapshot version of why Tamberelli Digital closed its doors. Nobody is to blame for the contemporary irrelevance of this business; it is simply an economic reality stemming from actual innovation.
I don’t bring all this up in order to eulogize, but to illustrate the difference between real loss of value through innovation and dilution of value through practices that are not in fact innovative at all. Innovation happens when Panasonic or Canon produces a camera that competes with a Sony product, and then Sony responds in kind, and so on. The beneficiaries of these innovations (usually) are consumers, who get a diverse array of affordable tools to produce motion pictures. The victims of these changes are intermediaries like the rental house, not because the rental house didn’t provide a very valuable set of services, but because the core service, holding leases on expensive gear, is no longer required in the new market. Conversely, however, not every disruptive digital-age business can be said to represent the same kind of innovation, even though presumptive defenders of all things Web, like to use this word to deflect criticism of what might be very damaging practices.
Take the music industry response to the Internet Radio Fairness Act (IRFA), in which Pandora claimed a rationale for lowering the already low licensing fees paid to artists. This was, I believe, the first time we saw so many brand-name musicians speak out against a web-industry initiative since Lars Ulrich was pilloried over Napster. Regardless, Pandora cannot be said to be an innovation that obviates the need for the music in the same way low-price digital cameras obviate the need for my friend’s rental company. To the contrary, it should be obvious to anyone that Pandora could not exist without the music and that if it cannot function while paying fairly-negotiated rates for its primary resource, then market rules says tough noogies, and some other entrepreneurs can try to get the formula right. Of course, as is so often the case in our ever-bifurcating economy, the principals at Pandora can only fail upward if the business model doesn’t turn out to work. This post from Digital Music News discusses Pandora executives cashing out $87.6 million in shares, which may signal a lack of confidence in the business and also would not bode well for a Spotify IPO. With payouts in the tens of millions from a company that has yet to make a profit, it is hard to know whether building a solid business is really the goal, or if Pandora is just a lesson how to become a dotcom bubble millionaire 2.0. If the company were to fail, Web industry wonks would blame the musical artists, many of whom will never see $10 million in their lives, but few will question the extraordinary wealth going into the pockets of about three to four executives.
The web industry has a bit of a track record for doing at lightning speed what the corporate raiders of the 1980s were doing in a pre-digital context — namely generating fast wealth for a small group of people while building nothing and often destroying something of real value in the process. It is, therefore, dangerous as a general practice to apply the word innovation as broad praise for every enterprise, initiative, or claim made by any company simply because it is web-based. Pandora and Spotify may change the way consumers enjoy music, but they do not redefine the fundamental desire for the music in the first place, and they have nothing whatsoever to do with the manner in which it is produced. We could look at Vimeo or YouTube in a similar way with regard to filmed entertainment or Amazon and e-books with regard to literature. All of these technologies change distribution and marketing, but they do not change the production of the products in any economic sense, and they do not change the desire among consumers to acquire the products. Therefore, if the makers of products like music, books, motion pictures are in any way harmed by technologies that change distribution and marketing, it is not reasonable to paper over that harm in the name of so-called innovation.
We already have a cultural problem distinguishing value from vapor, continuing a vicious cycle of leaping from bubble to bubble, and scores of economists seem to agree that we haven’t learned a thing since the near total collapse of the economy in the wake of the housing bubble implosion less than four years ago. I know next to nothing about economics other than the self-evident observation that building a business that generates returns on investment and creates middle-class jobs is sound, and that a scheme that turns vapor into million-dollar transactions for five individuals is dysfunctional. What I lack in knowledge about economics, though, I counter with a pretty solid understanding of language; and one expression I’ve known is utter bullshit since working for my first corporate client is the term “adding value.” This is a purposely vague concept, often used by professional services companies to justify high fees; and even this may have some truth to it from time to time.
But “adding value” is also a popular term used by webonomics proponents like Mike Masnick to tell authors of creative works how to “adapt” to a market in which their products no longer have intrinsic value. “Add value by selling tee shirts or creating special limited editions, etc.” the proposition goes, despite the fact that there are no grounds to argue that technological change has in truth diluted the intrinsic value of the media products themselves. To the contrary, it is clear that the market still wants music, films, books, etc., which means the products retain their intrinsic value because nothing about technology has supplanted the demand. Worse yet, the insistence that industries built on intrinsic value must adapt to the whims of an industry built almost entirely on advertising value is a very dangerous prospect in a world already on shaky economic grounds. Advertising, which yields about 90% of Google’s extraordinary wealth, has no independent, intrinsic value; it must be pegged to products and services that do have intrinsic value in the consumer market. We literally cannot all be in sales and marketing; some of us have to make things. Hence, any business practice that dilutes intrinsic value for the sake of advertising value is not only not innovative, but is a form of cannibal economics over the long term.
It seems to me that we might think of value as we think of matter — that it can neither be created nor destroyed (hence cannot be added), but that it is always shifting from inhabiting one entity to another. The value of cameras, for instance, shifted away from my friend’s rental business to retailers, who sell the cameras to a market wanting to own them. But the value of creative works, like the ones produced with those cameras, has not in truth shifted away from the works themselves to entities seeking to exploit those works for the purpose of advertising. The value remains embodied in the media products themselves. It is, therefore, not only preposterous to suggest that the Internet mandates a new economic model to which certain producers must adapt, it is potentially the logical foundation of one of the biggest bubbles destined to explode.
The Illusion of More is my personal blog from December 2011 to December 2025. As of February 2026, I am no longer posting new blogs or other content, but I hope you enjoy this archive. Please do not attribute any of my writings here to my current or previous employers.
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