By Lucas Collecchia, LLM 2013
Joshua Gans stands at the front of the lecture room chatting with a colleague. The word “Shared” from the title of his talk appears behind him on the screen, stylized as a clickable button. On first impression, you might assume that Professor Gans’ interests lay in the field of communications or computer science. But the author of “Information Wants to be Shared” is an economist by training.
Gans, a professor at the Rotman School of Management, gave the 2013 Grafstein Lecture in Communications at the Faculty of Law on March 5. His talk was framed by the terminology of economics and tethered to the subject matter of American author Stewart Brand’s famous 1984 quote:
“On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.”
Is this often-quoted aphorism true, Gans asks? Or is there something else going on with recent developments in information technology? Gans tackles the issue by examining the supply and demand curve for information. If the price of information dropped to zero, many traditional publishers warn of a doomsday scenario where the supply of information would fall to near-zero levels as well. Analyzed purely from a monetary point of view, this model seems demonstrably false, as marginal information costs have dropped dramatically in the digital age while information supply has, by many measures, increased. Despite that, legal restrictions on access to information largely point to the doomsday argument.
Gans suggests that supply and demand analysis leads us to consider whether the production of information should be akin to the production of public goods, funded using public goods models. (Why? Most of the audience knew the answer to the question of which books would be published if only the market dictated: Fifty Shades of Grey.) The public goods model shares costs on the supply side. But public goods are notoriously difficult to price, as there is no market to reach a monetary equilibrium. Attempts to price public goods are almost always done through proxies, which requires significant ingenuity and effort to determine, and make manual determination of the value of information as a public good difficult. He notes, however, that universities and other public research entities essentially operate under this model, but that negotiations over cost sharing are sometimes contentious and perhaps impossible to settle for all types of information.
Gans identifies a growing number of attempts to create shared funding models for information. Stephen King’s Plant—a novel he wrote in installments for subscribers who agreed to pay—attempted it, as did Louis CK’s $5 online comedy special. Crowdfunding sites, such as Kickstarter, have provided a platform for cost-shared projects, as well.
Gans says that another valuable property of information is its social relevance.
Gans doesn’t discuss effort and time as elements of price directly, but instead examines them through the concept of value. As consumers of information, our willingness to pay for information is determined by the amount that we value information. Gans notes that information’s value can be increased by making it more relevant; in a world where access to information is at stratospheric levels, access itself isn’t valuable, but sorting through the sea of accessible information becomes increasingly valuable.
Gans says that another valuable property of information is its social relevance. Certain individuals watch the news to be able to chat about current events. Others may join book clubs to discuss their favorite novels. In the regime of shared use, the accessibility of information increases its value.
Using books as an example, Gans asks us to focus on where we find value in order to take a peek into the future of information. His first observation is that we value reading books, but we also value keeping them on display as a signal of how cultured we are. Since the vast majority of books are sitting dormant at any time, access to the information within them cannot account for their current prices. In a digital system, however, there is no display value associated with access to books. This means that increasing value in digital books will be associated with increasing the relevance of those works. Two methods of doing this would be advertising the book to draw attention to it, and allowing for easier shared use benefits associated with the book. These two methods are synergistic; advertising increases the network of users, which in turn advertise through word of mouth if they’re enjoying the product.
Shared experiences in book reading are critical as the amount of information available explodes, but digital licenses don’t allow friends to pass books to each other. Gans advocates that the future of books is in digital libraries. His prediction is well timed, with digitization projects rapidly cataloguing most of the world’s literature in digital form. Digital libraries with subscriptions would allow friends to access the same works, and would provide compensation to content producers more accurately in line with the worth of their product. A digital service, for instance, could determine how long a user spent reading a particular book, while the sale of a bound book provides a fixed amount of compensation, even if the reader refuses to read past page 3.
But there are challenges for such a model, Gans admits: Would our current IP system be able to cope with such a product? Do IP collectives function well? Zooming out from books to shared use of information and funding models as a whole, there are challenges to deal with in the areas of privacy, pricing, and conceptualization of new opportunities.
Questions from the audience dealt with these challenges, asking how we would market information which wasn’t in the format of a ‘book’, whether or not the ‘wild west’ approach to digital access was proving its sufficiency, and asking how consumers could properly value books without a robust preview function which itself might devalue access.
The Honourable Jerry S. Grafstein, LLB 1958, ended the lecture and said communications was barely taught during his time at the University of Toronto. He said he endowed the Grafstein Lecture in Communications, now in its 15th year, in appreciation to the university for teaching him “all of the skills he uses to this day” and to the fields of communications and law, where he has spent most of his working life.
