Internet consultant and NYU professor Clay Shirky has posted yet another insightful column on the shifting landscape for media producers, this one discussing the downfall of complex business models. While his column is smart and accurate, it also falls prey to the myopia that’s so common among new media pundits–there are other successful business models that don’t require a race to the bottom.

Shirky’s message is one that any evolutionary biologist will immediately recognize.  Over time, businesses, like organisms, become more and more specialized to their environment.  When the ecosystem changes, these inflexible systems collapse. The problem is exacerbated by ever-growing complexity which makes response to stress even more difficult. Examples cited include the Roman Empire, the Mayan civilization and the situation we’re currently seeing with the rise of the internet and user-driven content.  Shirky focuses on the television industry in particular:

The most watched minute of video made in the last five years shows baby Charlie biting his brother’s finger. (Twice!) That minute has been watched by more people than the viewership of American Idol, Dancing With The Stars, and the Superbowl combined. (174 million views and counting.)

Some video still has to be complex to be valuable, but the logic of the old media ecoystem, where video had to be complex simply to be video, is broken. Expensive bits of video made in complex ways now compete with cheap bits made in simple ways. “Charlie Bit My Finger” was made by amateurs, in one take, with a lousy camera. No professionals were involved in selecting or editing or distributing it. Not one dime changed hands anywhere between creator, host, and viewers. A world where that is the kind of thing that just happens from time to time is a world where complexity is neither an absolute requirement nor an automatic advantage.

Shirky’s point is worth heeding — new technologies can either be seen as threats leading to collapse, or as opportunities to streamline, ways to force your business into more efficient production through simplification:

It’s easy to see the ways in which collapse to simplicity wrecks the glories of old. But there is one compensating advantage for the people who escape the old system: when the ecosystem stops rewarding complexity, it is the people who figure out how to work simply in the present, rather than the people who mastered the complexities of the past, who get to say what happens in the future.

Part of the problem for the newspaper industry is the massive infrastructure they’ve developed that is rapidly becoming obsolete.  Things like giant printing presses and fleets of delivery trucks have gone from being economic advantages to being anchors weighing down the transition to a leaner way of producing and selling news content.  In the scholarly publishing world, there’s growing advantage in jettisoning infrastructure, in outsourcing things like printing (do you really still need to produce a print product?), warehousing, fulfillment, web-hosting, sales, and marketing.

But there’s a downside to all this simplicity as well – -as Shirky notes, some content requires complexity in order to attain value.  Systems naturally trend toward their state of lowest energy, and that’s where the current Internet revolution is leading us — to a world of cheaply produced “good enough” content. It’s essentially a race to the bottom: who can produce the cheapest version of something that satisfies the absolute minimum of a customer’s needs?  Shirky’s suggestions here are something of a re-hash of Wired magazine’s focus on “The Good Enough Revolution” from last year, which we covered here.  Shirky is right in that one way to compete with “good enough” is to lower your own costs of production to a level where you can compete on price.  But that’s not the only potential solution.

Low-end, “good enough” products are rapidly gobbling up much of the market, but we’re seeing a lot of success stories at the high end as well.  The middle of the market seems to be what’s disappearing — mediocre products at mid- to high-level prices are being replaced either by ultra-cheap products that don’t work as well but suffice, or by expensive, high-quality products where the value added justifies the higher price.  Sales for poorly performing but inexpensive netbooks are booming, as they’re “good enough” to replace the average notebook for many users (expect this trend to continue as Apple’s iPad makes gobbles up further notebook sales).  At the same time, Apple is making a killing in the $1,000-plus computer range with high-end machines made with high-quality components and software.

Cutting production costs may not be enough to save the newspaper industry if there are still free alternatives that offer similar content.  The only way to effectively compete with “free” is to offer something substantially better.  For newspapers to survive, they need to produce content that’s not immediately replaceable by everything else on the web.  Efficiency of production is still important regardless of which segment you choose, perhaps even moreso at the high end because that’s often a much smaller market segment (though this can be offset by potentially higher margins).

Goofy YouTube videos are fun to watch, but there still seems to be a strong draw to sprawling cinematic epics, and given recent box office records, the general public is clearly willing to pay higher prices than ever before for this level of production.  It’s hard to imagine something like Avatar being created without a complex system and massive production costs behind it. It’s date night, which do you want to go see, Lord of the Rings or “Charlie Bit My Finger”?

For a publisher then, the question becomes whether you want to compete by getting into the mud at the low end of the market, or by creating stellar works of high quality. As I’ve said over and over (an idea I’m doing my best to pound into everyone’s heads), successful scholarly researchers are really busy people.  Like everyone else, they’re happy to get stuff for free.  But time is often a more valuable commodity to them than the funds needed to subscribe to a journal or pay for an excellent book.   As a teacher, would you really want to use something like this as the textbook for your course?  There are lots of open courseware initiatives floating around, but how much time do you want to spend adapting and expanding them to meet your needs.  A really good textbook takes an incredible amount of work beyond just the writing.  Generating a consistent and visually compelling art program, editing to the most effective didactic style, creating a common style and voice throughout a long book written by many authors, indexing, fact-checking, all of these things add greatly to the learning experience, and are unlikely to be recreated by crowdsourcing.  Some will be content with the “good enough” material for their students, but there is, and will continue to be, enough of a market to support quality.

And that quality does not come cheaply, and yes, creating it often requires a certain level of complex infrastructures.  Expertise is something to be praised and sought after, not something to be disdained, and that’s the problem with so much of the philosophy coming our way from online ideologues who favor inexpensive quantity over quality, who promote the idea that brute force free labor approaches can somehow add up to equal genius.  Joe Clark sums things up perfectly:

At a certain point, you have to admit you aren’t good enough to do something better than an expert could do it even if the technical option exists for you to give it a shot anyway.

While people will tolerate a lot of things, what we want are beautiful things that work well. There aren’t many nonexperts who can accomplish that. Expertise needs schooling, maturation, taste, and quite a lot of attitude.

The foregoing explains why open source has nothing to teach literature or indeed any artistic creation, since talent doesn’t scale as you give more and more developers check-in access to the version-control system set up for your novel.