Does Information Want to Be Bundled?

The Internet Age brings us an on-demand world. If you want to listen to U2, you can find them on YouTube. If you want to watch 30 Rock, you can catch it on Hulu. Who in their right mind would actually pay for media, anymore?

Well, most of us actually. If we're unwilling to pay for individual U2 songs or 30 Rock episodes, we're more than willing to pay for the Internet access to download music, and the cable service to watch TV. Perhaps information doesn't want to be free. Perhaps information wants to be bundled.

There are a lot of reasons why bundling works especially well on cable, James Surowiecki writes. It's cheaper than à-la-carte because it vastly reduces price-per-channel. Moreover, we like to pay for choice. The same way I'd rather pay a full amusement park pass, or a full gym pass -- rather than an entrance fee plus individual charges for the machines -- I pay for thousands of cable channels I won't necessarily watch because I'm pricing in the possibility that I'll watch them in the future.

But the cable model is in flux. Years ago, if I wanted to watch shows on television, I had to buy a television and wait for the shows to air. Enter sites like Hulu that let me watch almost any show on Fox, CBS and NBC that I want, at any time, if I'm willing to sit through an ad. Today, both sides are moving toward the other. Comcast expanded on-demand for TV and introduced the website Fancast, which is essentially a Hulu for Comcast customers. Just as cable companies are trying to becoming nimble like Hulu, Hulu is trying to catch up with cable companies by introducing a bundling plan to pay for its most popular shows.

Americans are still willing to pay for access to content -- for Internet service and cable -- but many of us are reluctant to pay for individual pieces of online content. This is especially true in media like journalism and music, where the proliferation of free articles and songs online depreciates their perceived price. Some analysts see this phenomenon and conclude that information wants to be free. But cable has survived the information-is-free revolution so far because cable is not content, but rather access to content. It is an unlimited buffet with an all-included pass to the world of television. The challenge for journalism and music is to create a platform that creates a buffet out of industries that have always served their content a-la-carte.