This is one of the eternal truisms of journalism: The value of news as a product only rarely lines up with what the market will pay for it.

It’s always been true, but the move from physical to broadcast to digital media has made that reality more evident at every step. “If you do good work, people will pay for it” feels right — but the past 20 years have made it clear that the connection between quality and revenue is strained at best.

Why is news hard to value? Economists point to a few reasons:

• A news story is what the economist Phillip Nelson called an experience good. That means it’s difficult to know how good it is until it’s already been consumed. Order a Big Mac at McDonald’s and you know exactly what you’re getting — and thus you can make a judgment beforehand about whether that value is worth $3.49 to you. But it’s hard to assign a definite value to an individual article before you’ve read it. (This is one of the 28,430 reasons micropayments are hard to pull off for news.) There are certainly ways to suggest a story’s value beforehand: the brand reputation of the publisher that created it, a recommendation from a friend, an algorithm bringing it to your attention. But it’s still a bit of a crapshoot in ways that most consumer goods aren’t.
• A news story is, economically speaking, a public good. Nearly all journalism is, in econ lingo, non-rivalrous: If I buy a plot of land, that means you can’t own it, but if I read a news story, that doesn’t prevent you from reading it too. And most journalism is also non-excludable, meaning it’s difficult to limit the benefits of a news story only to its paying customers. After all, anyone can share, summarize, aggregate, or just talk about the story in a way that allows non-customers to learn its content. Public goods provided by private entities (like most news publishers) are very hard to value.
• A news story’s costs are concentrated but its benefits are diffuse. When it produces a story uncovering corruption in the mayor’s office, a local newspaper bears the entire cost upfront: paying the reporter’s salary, paying the editors/designers/lawyers/etc. who work on the story, buying the paper to print the story on, buying the gas to put in the delivery trucks that transport that paper, ad infinitum. But if that story prompts an investigation that boots the corrupt mayor from office, the benefits of that story will be felt citywide — including by people who have no idea the story ever existed. (This is the free-rider problem.)
• A news story faces near-infinite free competition. Sure, any specific news story might be an exclusive for a single news publisher. “No one else has our story on that corrupt mayor!” But most consumers don’t wake up in the morning and go looking for specific stories about their specific corrupt mayor. Instead, the itch they’re trying to scratch is often “Lemme catch up on some news,” or “I want something to read while I eat my Frosted Flakes,” or “I need something to share on Facebook” — not a specific information need that can only be met by your exclusive content. And that’s before you think about news consumption within the broader universe of media consumption — how Netflix, Fortnite, Real Housewives, and just about anything else on your phone competes for attention and time with news stories.

All of these problems come back, in some way, to the idea of scarcity. How can you increase the market value of news when digital distribution wants it to be everywhere?

Naturally, this is a post about blockchain.

Blockchain, the database technology underlying cryptocurrency, has been hyped as a savior for nearly every industry known to man, not least the journalism business. Longtime readers of Nieman Lab will know I was, er, skeptical of the most high-profile crypto/news startup, Civil, which tried to turn blockchain into a combination voting mechanism/funding platform/”truth” definer/trading floor. It was a mess.

But if there’s one thing blockchain legitimately does well, it’s creating artificial scarcity.¹ Even when it’s insane scarcity, as has marked the recent boom in NFTs — non-fungible tokens, which can identify one specific copy of a digital file as unique or distinct from its binary clones.

In other words, there might be a zillion different copies of a gif on the internet, but an NFT lets you say: “Actually, this one specific gif file, this is the real one” — or at least a special one. It’s the original Monet “Le déjeuner sur l’herbe” that hangs in the Musée d’Orsay — not the poster print of it on your college dorm-room wall.

Blockchain, combined with some of humanity’s worst traits — conspicuous consumption, profound income inequality, Nyan Cat — has brought us to a world in which a garbage JPEG sells for $69 million and a tweet can go for $2.5 million. NFTs are capitalist decadence at a fall-of-Rome scale.

But hey, if the value of news as a product only rarely lines up with what the market will pay for it…why not try to take advantage of that market irrationality while it’s hot? Turn that Veblen bad into a Veblen good?

newspapers. but they publish stories as NFTs instead of articles.

BOOM, i just saved the media business

— 👨🏻‍💻☕️ (@hunterwalk) March 17, 2021

That’s what Quartz, the business news site (now owned in large part by ex-Nieman Labber Zach Seward), decided to do when it made an NFT out of one of its news stories. A news story about, of course, NFTs:

Let it never be said that Quartz is behind the curve. We converted an article—this very article, in fact—into an NFT, a digital asset that essentially serves as its own certificate of ownership and authenticity.

The Associated Press was the first news organization to sell an NFT, for a work of art titled “The Associated Press calls the 2020 Presidential Election on Blockchain—A View from Outer Space.” But we’re quite certain ours is the first piece of text journalism to be put up for sale in this manner.

Proceeds of the sale will be contributed to the Lauren Brown Fellowship at the International Women’s Media Foundation, which supports women journalists from underrepresented backgrounds.

(The AP got about $180,000 worth of crypto for this image. Life will someday make sense again.)

In any event, the Quartz story is a useful look into the process of creating and putting an NFT up for sale. The actual digital good being sold is…a screenshot of the story, entitled “Portrait of the Article as an NFT.” Here is that screenshot; my inner designer feels obliged to note that all the standard Quartz fonts got screwed up in the screenshot’s creation. (Hey, maybe that’ll add to its value! Every generation gets its own Inverted Jenny.)

It’s a stunt, and I am an unabashed fan of journalism stunts. Quartz’s NFT went up for sale about 24 hours ago, as I type this, but it didn’t attract much attention. For a long time, it had no bids.

This article is on sale as an NFT https://t.co/0o8j9dXzFY

— Quartz (@qz) March 17, 2021

But then came bidder n00bmind, who put up 0.04 wETH (wrapped Ethereum tokens), equal to about $71.

And then came bidder jarzod, who scrounged up the crypto equivalent of pocket change to raise the bid to 0.042 wETH, equal to about $75.

And then came bidder zonted, who — in profound violation of the game theory of auctions — bid a remarkable 1 wETH, which is right now worth about $1,814. Eighteen hundred bucks for a busted screenshot of a news story.

It appears zonted the bidder is also zonted the digital art gallery, “the premier digital art gallery in contemporary digital art with ownership stored on non-fungible tokens (NFTs) on cryptocurrency blockchains.” Which means it has its own interest in pumping up the value of NFTs — especially NFTs it might then be able to resell to a greater fool. Opaque self-dealing seems to be a thing in this “space.”

And hey, in any event, any money Quartz raises is going to a great charitable cause; charity auctions are already divorced from the rules of the marketplace, as any hacky sitcom writer can tell you.

But no matter how absurd this sale, or how high the final price, it’s a reminder: The value of news as a product only rarely lines up with what the market will pay for it. Our new friends n00bmind, jarzod, and zonted are apparently willing to pay good money for a screenshot of a news story. But what are the odds they also complain about the $10/month paywall they hit the other day clicking a link on Twitter?

The famous Stewart Brand line holds that “information wants to be free.” But that wasn’t his complete 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.

Information wants to be free, information wants to be expensive — but there’s no guarantee it’ll be any good at figuring out which is which.

1. Well, with certain limitations. [↩]