The reputation economy: Chris Anderson

I enjoyed reading Wired editor-in-chief Chris Anderson’s books, Free, and The Long Tail. Anyone who loves to blog or spend time online will find them highly informative.

Here, in The Long Tail, Anderson is writing about the “reputation economy”. As a blogger himself, he understands why people blog and create websites, whether they expect to make any money and why many of them are not interested in copyright protection.

It’s a long extract, but fascinating.

The Reputation Economy

Why do they do it? Why does anyone create something of value (from an encyclopaedia entry to an astronomical observation) without a business plan or even the prospect of a paycheck? The question is a key one to understanding the Long Tail… The motives to create are not the same in the head as they are in the tail. One economic model doesn’t fit all. You can think of the Long Tail starting as a traditional monetary economy at the head and ending in a non-monetary economy in the tail. In between the two, it’s a mixture of both.


Technorati, Chris Anderson and The Long Tail

Here is the Technorati Top 100 blogs list for today, which I converted into a line chart after reading Chris Anderson’s The Long Tail. The Huffington Post is at the top of the chart with a Technology authority of 968 and Big Government, The Big Picture and Dvice round off the list with an authority of 762 each.

Google Chart

See how the graph falls steeply to just above 865, then goes down by a few big steps before tapering off. The sharp drop from the top shows how big is The Huffington Post’s lead over the competition. The graph tapers off someway down below 865 as the competitors are more closely packed. (Chart created with this Google Chart generator.)

Gizmodo is second with an authority of 901, TechCrunch third (896), Mashable fourth (888), Boing Boing fifth ( 883), Engadget (880), The Daily Beast seventh (863), Gawker eighth (857), The Corner on National Review ninth (854) and Hot Air 10th (853).

TMZ is 11th (849), Think Progress and CNN Political Ticker tied at 12th (848), Andrew Sullivan’s The Daily Dish 14th (834).

The rest of the pack are bunched more closely, with authorities ranging from 829 — that’s — to 762, where Big Government is tied with The Big Picture and Dvice.

Those who read blogs don’t, of course, go by the Technorati list. Celebrity watchers will read TMZ anyway, techies go for TechCrunch while politicos will get their kicks from The Daily Dish, The Huffington Post and The Daily Beast.

That’s what The Long Tail is all about. Chris Anderson describes how new technology has created niches, fragmenting mass markets.

Books Media

Free because we blog, tweet, in an attention economy

Singapore’s Straits Times and Hong Kong’s South China Morning Post are the only English language newspapers I know that do not allow their stories to be read online for free.

Even the Financial Times allows some of its stories to be read for free.

Not the Straits Times. All you can read for free on its website are wire stories, letters to the editor, readers’ comments — and, yes, its blogs. Just don’t expect to see the newspaper’s regular columnists there. You can read Paul Krugman and Thomas Friedman for free, but you have to pay to read Andy Ho and Sumiko Tan.

It just goes to show the amazing strength of the Straits Times that, while virtually everyone else is giving away original content for free, it can still charge for what it has to offer.

Digital cheap

Newspapers can allow free online access because the digital medium is so cheap, says Chris Anderson in his book, Free. It’s fascinating reading. The Wired magazine editor says why readers must pay to read his magazine but enjoy free access to the website:

“In print, I operate by the rules of scarcity, since each page is expensive and I have a limited number of them… Not only are our pages expensive, they are also unchangeable. Once the presses run, our mistakes and errors of judgment are preserved for posterity (or at least until they are recycled)…

“Online, however, pages are infinite and indefinitely changeable. It’s an abundance economy and invites a totally different management approach. On our Web site we have dozens of bloggers, many of them amateurs, who write what they want, without editing…

“Standards such as accuracy and fairness apply across the board, but in print we have to get everything right before publication, at great expense, while online we can correct as we go.”

The website costs only a fraction of the magazine business:

“We pay dollars to print, bind and mail a magazine to you… but just microcents to show it to you on our Web site. That’s why we can treat it as free, because on a user-by-user basis, it is, in fact, too cheap to meter.

“Overall, our server and bandwidth bill amounts to several thousand dollars a month. But that’s to reach millions of readers.”

Newspaper publishers are beginning to ask what’s the point of reaching millions of readers when advertisers are willing to pay for only a certain target audience.

Attention economy

But money alone no longer makes the world go round, as even businesses acknowledge. Why else do they make such a fuss about brand recognition?

Welcome to the attention economy. Another reason to read Free, especially if you are a blogger or interested in the media.

Anderson explains the new economy in terms any blogger or user of Facebook, Twitter or MySpace will understand: