How Information is Actually Getting More Expensive

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If information wants to be free, it's failing.

Every year the average American spends $1000 a year on services like cable, Internet and video games. Add another $1000 for cell phone services, writes NYT's Jenna Wortham, and "the average family is spending as much on entertainment over devices as they are on dining out or buying gasoline." Actually, $2000 a year to carry the world in your laptop and your phone could be the low end for real tech junkies.*



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Content providers like to explain away their plunging revenue by saying, information wants to be free. It's obviously the case that the Internet has challenged journalism and music by turning the former product into freely consumed URLs and the latter into freely downloadable files. But even if we feel like we're consuming the New York Times and Taylor Swift's new album for free over the Internet, we're paying thousands of dollars a year to access all that "free" content.

Nick Carr argues that we pay this price because we really do value content highly. He puts it this this way:

The reason we fork out all that dough is (I'm going to whisper the rest of this sentence) because we place a high monetary value on the content we receive as a result of those subscriptions and fees.

We tell ourselves that we're paying for connectivity, but obviously we're paying to be connected to information. So how are media publishers failing if we're paying more than ever for our media? The key seems to be that consumers have learned to put a price on access, but not on individual content. For example, my roommates have decided that paying $30 a month for Internet access is a good deal. But by that math, $1 a month seems too expensive to subscribe to Vanity Fair, which after all is just one of thousands of potential sources to learn about politics and culture and find pictures of celebrities. Today's media mindset is "A thousand dollars for access, and not one cent for content."  

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*Gizmodo has an awesome chart here:

See how it looks when you add it all up:
















That's right: if you want to stay even close to fully connected, you're expected to cough up nearly $1,000 a month. Not for hardware. For fees.
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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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