Being Read in Cyberspace:
Boutique and Mass Media Markets,
Intermediation, and the Costs of On-Line Services

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January 18, 1996 (v 4.0a)

A minor revision of "Boutique and Mass Media Markets, Intermediation, and the Costs of On-Line Services" that will appear in The Communication Review.

Copyright: Rob Kling 1995, 1996 

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MAGIC LINKS BETWEEN AUTHORS AND READERS

For many analysts, cyberspace promises new freedoms for authors to readily reach new readers, and for readers to find new authors easily and cheaply. Eugene Volokh's (in press) article in this journal issue ilustrates this delightful prospect and is worth serious attention -- for its strengths and gaps. He portrays an enchanting world in which we can partake of a new information cornucopia. He heralds the ways that new information technologies might so reduce the costs of musicians distributing their music, authors distributing their publications that we will not face the limitations imposed by physical space and its economic relations. Related physical embodiments, such as magazine stands and retail stores, will either disappear or shrink in significance. Readers and listeners won't suffer the costs and delays of traveling to a physical store, be frustrated that it is out of stock on a key item -- or worse yet, doesn't carry it because of limited shelf space and inventory costs -- and have to wait until driving home to be able to read the prose or let the music brighten our homes. Volokh argues forcefully that an infobahn organized around high-bandwidth fiber and expanded services based on a cable-TV or an Internet model can bring a cultural cornucopia directly into our homes with a minimum of complexity (something like using an ATM).

Volokh's argument has an intriguing twist by emphasizing the ways that authors and musicians might earn larger incomes by directly selling their words and music to listeners and readers without having to rely upon profit-taking intermediaries, such as publishers, distributors and retailers. His article is permeated with interesting (and overly optimistic) calculations about the possible profits that musicians and authors can reap through direct sales on infobahns. Some of his examples come from gratis resources on the Internet (such as Project Gutenberg's archives of uncopywritten electronic books). But Volokh primarily enthuses about the ways that networks and Capitalism can stimulate a cultural Renaissance that would expand the range of ideas and music being circulated by removing middlemen and allowing many more creators to earn larger incomes (and maybe even livelihoods).

I believe that some aspects of Volokh's informational cornucopia are available today, and that new information technologies will enable an even larger informational cornucopia to unfold for some of us. But I differ with Volokh on many key points, such as the nature of the likely information infrastructure, its technological and social complexity, the details of actual costs for consumers, the kinds of groups that will find it most affordable and accessible, and the extent to which the changes that he envisions will shift power from publishers to readers/listeners.

Most significantly, we differ in the extent to which the emerging information infrastructure organized under laissez-faire capitalist principles will substantially alter the extent to which media ownership is concentrated in North America. Volokh argues that the organization of mass communications will shift from one that is highly concentrated and aimed at mass audiences to one in which is narrowcasted to numerous small audiences with distinct tastes and interests. The claim that electronic media are cheaper to distribute than physical media is central to his argument, as is his focus on distribution costs as a major structural cause of the concentration of the publishing and music industries.

One important way of locating Volokh's seductive argument is through a contrast that Steve Fuller (1995) has recently drawn between CyberPlatonism and Cybermaterialism. Fuller characterizes Platonism and CyberPlatonism in discussing the use of computer networks to support scholarly communication:

"Platonism The belief in a frictionless (i.e. costfree) medium of thought that would be the ideal vehicle for conducting inquiry. CyberPlatonism The belief of Platonists who claim that said medium is the Internet. "

Fuller's definitions can help us if we extend them to communications, more broadly, including entertainment, and expand his focus beyond the Internet to include other electronic communication systems, such as cable TV. Fuller characterizes the Cybermaterialist as one who does not believe that the search for a frictionless medium of thought is intelligible. Instead, what happens is that one form of friction is exchanged for another, as we pass from one medium to another. In more concrete terms, the costs are merely shifted around, sometimes from one aspect of our lives to another, sometimes from one part of society to another.

Volokh makes his case by focusing on the possible distribution costs for authors, publishers, and readers who rely upon electronic media, and by de-emphasizing other major costs, such as production costs visually exciting books and magazines. The Cybermaterialist alternative has to examine these cost arguments head on, and indicate why they are not compelling for the broad range of musical and written materials that Volokh discusses.

The CyberPlatonist sees the costs of producing or distributing some materials decrease, as new opportunities for diverse services and new voices to reach new readers. This is an interesting heuristic for identifying new businesses and services. But it is a weak basis for actually estimating costs and profits from such services, let alone predicting overall economic or social change. A few years ago, some CyberPlatonists were suggesting that desktop publishing could turn anyone with $3000 for a computer and printer equipment into her own publisher and thus democratize publishing. Today, I see comparable promises made for publishing on the World Wide Web (WWW). And Volokh, like George Gilder (1993, 1995), touts these promises for a wider variety of electronic media. The Cybermaterialst has seen unfulfilled extreme utopian promises before (Kling and Lamb, 1996), and tries to understand how social forces beyond distribution costs work to limit the range of social and cultural actualities even when increased social diversity seems so easy to enhance.

BOUTIQUE and MASS MEDIA MARKETS

The markets that link the creators, publishers, distributors, and readers/listeners of diverse media -- books, magazines, and music -- are structured in complex ways. One key feature is the dual worlds of publishing: a relatively offbeat world of small (boutique) publishers and their lively authors, and a much larger world of mainstream publication where relatively few owners, editors, and authors sell to relatively large mass markets. These two markets have co-existed for decades -- Time Magazine versus Ramparts, Simon and Schuster versus Grove Press, Warner Brother Records versus Alligator Records and Rounder Records, the blockbuster movie that opens on 1,000 screens nationwide and the art house film that opens on five screens. The boutique publishers and their distribution channels are segmented from the mass market publishers and their distributors in numerous ways. Magazines and films rarely move from mass market to boutique, or vice-versa (although authors and musicians sometimes move from one to the other). Mass magazines that can't sustain large readerships, like Colliers, close out rather than become small boutique magazines. Small publishers rarely become mass market publishers, although sometimes they are bought out by them.

The aesthetic and intellectual range of books, magazines, music and films, has increased widely in North America in the last three decades. The number and vitality of boutique market (niche) tastes has increased. Some of this growth is attributable to a more widely traveled and educated public, the spread of large booksellers and music stores to regional cities, and the ease of mail order expedited with credit cards. Simultaneously, the mass media reign supreme for covering news. And the niche authors, publishers, and readers seems to have done little to fundamentally undermine the dominance of the few dozen magazines that appear routinely the supermarket and airport newsstands and lobbies of business firms.

Electronic media can enable some readers and listeners who are "hooked up" to acquire some kinds of communications faster and more rapidly than traditional physical distribution. Radio and TV can broadcast some news more rapidly than news papers, and computer networks can enable people to find documents that would take days or weeks to obtain by paper and mail, if they ever saw them at all. These possibilities for the rapid distribution of some materials via computer networks can be especially important to artists, authors, publishers and readers whose aesthetic and political tastes run outside the mainstream and who depend upon the boutique markets. But there seem to be significant limits on the relative sizes of the mass and boutique markets. For example, a mediocre pop album by Michael Jackson can sell more records in a year than is sold on all of the folk music labels combined. A Danielle Steele novel starts with press runs in the hundreds of thousands -- far beyond the total annual sales of most boutique publishing houses.

Volokh's core argument echoes Alvin Toffler's and George Gilder's claims about the erosion of mass markets (demassification): new electronic technologies, such as computer networks and fiber-based cable-TV, will expand the relative size of the boutique market segment at the expense of mass markets, and will -- in the long run -- become the dominant market structure. This will be a bloodless democratic revolution that will be forced by the seemingly low costs, high speed, and vast information processing capabilities of new electronic technologies.

MATERIAL GROUNDS

The long run does not come soon, or even ever. It helps to set some concrete time frame in which to examine the relationship between information technology and social change. I suggest that a 15-20 year time frame is useful, although it is much shorter than, say, the duration of the industrial revolutions in North America and Western Europe. In 1980, some tens of thousands academics, journalists, and computer hobbyists wrote or edited with computerized text processors. Today, 15 years later, tens of millions of North American academics, journalists, college students, and diverse professionals routinely use them to write or edit. Smith Corona, a company that has been fervently focused on typewriters has filed for bankruptcy. This virtually universal adoption of PCs for professional writing sets the stage for the spread of electronic newspapers, magazines, journals and books and creates a possible foundation for Volokh's cornucopic vision. The concrete time frame helps us speculate more reliably about emergence of new technologies, (such as his specialized electronic books, or cbooks), their purchase and operating costs, and their technical capabilities. I find Volokh to be too optimistic about the extent to which computer vendors will be able to market easy-to-read, convenient and inexpensive computer books (cbooks), and when high-speed high-resolution color printers will be so inexpensive that women can print out their copies of Vogue and Ladies Home Journal at home rather than subscribing at home or picking them up at the beauty parlor.

But most seriously, Volokh is too mind-boggled by some of the computerized devices that could form parts of new systems for distributing music CD and electronic materials that he misses key architectural features of these socio-technical systems. He is so fascinated by some possible internal cost-efficiencies and important capabilities of these new media distribution systems, that he ignores other central constituents, such as the operation and organization of intermediary databases, that don't necessarily result in cheaper overall costs for most authors and their readers, or musicians and their listeners.

Readers must be careful in accepting Volokh's optimistic cost and revenue estimates. For example, in the case of computer equipment, he describes high-end performance and cites the possible prices of low-end equipment. Like other CyberPlatonists, he projects a world in which the costs of new information technologies appear low and will only decrease. He suggests that musicians can make their recordings available on-line for free -- "there'll be no tangible copy production, distribution or sales expenses." In this case, the musician seems to have free computers to store her work, free high-speed communications lines 24 hours per day so that people can download the recordings, free advertising, and free sales support to manage electronic purchases. It's a nice example of free thinking, but not very plausible.

Volokh confuses an increasing diversity in the likely number of publications and their enhanced visibility for eager, curious connoisseurs with a restructuring of media markets from oligopolistic mass markets to more competitive boutique markets. Volokh's sweeping essay covers many aspects of publishing music, newspapers, magazines and books, as well as advertising and copyright. In this short article I can discuss only a few of the key areas where I believe that his delightful vision misleads us.

THE SHIFTING STRUCTURE OF NEW MEDIA DISTRIBUTION SYSTEMS

This is a period of significant experimentation by authors, publishers, and firms like CompuServe, Dialog, and The On-line Bookstore that organize electronic collections for consumers. Volokh echoes the catchy rhetoric of "the Infobahn," and refers to a single new distribution system, and argues that it will reach every household via fiber-based conduits organized, in part, by cable-TV providers. In the past 100 years, our communication infrastructures have been diverse and seamed -- telegraph, telephone, radio, broadcast TV, computer networks, fax, and cable TV running on different conduits or in incompatible formats. Continuing competition between the providers of diverse information services and communications firms makes it likely that a seamless integrated Infobahn will not develop within the next few decades.

Many of the new electronic newspaper, magazine, and books that Volokh describes have been developing via on-line information services such as Prodigy, CompuServe, and Dialog, or via the World Wide Web (WWW) services on the Internet. Some of these services, such as Dialog's resale of articles from numerous newspapers, business magazines, and scientific journals have been profitable for over a decade and give some strong clues about their likely future character. But many of the new ventures are experiments whose forms, pricing, and very future is uncertain.

For example, Volokh enthuses over on-line bookstores that enable readers to download whole books. The On-line Bookstore (http://marketplace.com/obs/obshome .html), which has been the subject of several articles, lets customers browse a large catalog, sample books electronically at $5.60 per hour, and even download some complete books at a similar charge. It's had over 100,000 "web hits" per month since the Fall of 1994, but it ran at a modest loss in 1994 and is projecting to double this loss in 1995 (Janah, 1995). Whether and when the On-line Bookstore and similar ventures find ways of pricing, advertising, and offering profitable services is an open question. But there are certainly many firms trying similar forms of electronic commerce in which they allow customers to place on-line orders for books, CDs and other items that they ship by mail to the customer's home.

The experiences of Dialog (a division of Knight-Ridder Publishing) and CompuServe (owned by H.R. Block) are also instructive. Dialog, one of the oldest on-line information services, provides access to several hundred distinct searchable full-text databases, and also information-alerts that sends a note when a new article is added that matches a customer's specifications. Dialog charges between $15-$300/hour for searching its databases, and between fifty cents and $5.00 (check) for downloading individual articles. Most of the databases cost either $60 or $120/hr to search, and the typical Dialog customer runs up charges that average $150/hr. Dialog offers its customers, mostly professionals in "rich businesses," a one-stop shop that provided access to diverse databases through a uniform interface. It also provides its customers with help in using the services via special manuals and a knowledgeable assistant available 24 hours a day at the end of an 800 phone number. Dialog's pricing has not gone down in the last few years, despite rapid decreases in the costs of computer components, such as disk space. These technological economies are offset by royalties to authors and publishers, and by increases in skilled labor costs, such as providing help to customers, developing new database formats, integrating new files into Dialog's system. Dialog attracts customers by offering a uniform interface and a large number of databases that are popular with certain businesses.

CompuServe is a lower priced and more popular on-line information service. It provides diverse discussion forums, e-mail, and Internet access as well as on-line newspapers and magazines with a fee structure that includes some free services, and (as of September 1995), charges for all services that are used beyond a five hours per month. CompuServe subscribers can read the Associated Press wire, the current issue of US News and World Report, and some other mainstream newslines and magazines. Searching back issues of these magazines and newspapers, as well as reading or downloading some popular files, such as AP's sports news and detailed financial news costs an additional $15/hour. (Phone charges for reaching CompuServe's access numbers are extra, although it also offers toll-free 800 numbers for about $5 per hour.) CompuServe provides technical help 24 hours a day, seven days a week to its customers via 800 phone numbers, a uniform interface to hundreds of databases, and integrated billing for items purchased from vendors who advertise and provide their catalogs on CompuServe.

While Dialog has relatively few competitors, CompuServe faces aggressive competition from similar services such as America On-Line, Genie, and Prodigy, as well as Internet service providers such as PSI and Netcom. CompuServe and America On-Line each report having about three million subscribers, while Prodigy reports about two million. These eight million people who subscribe to on-line services constitute a significant fraction of the North American public that is routinely purchasing on-line services from home. Consequently, the mix of services and pricing should help us understand the shifting markets of the electronic distribution of books, magazines, and newsletters in a business profit-making context. The major services, like CompuServe, act like electronic shopping malls that offer the more popular mass brands of information services. CompuServe offers US News and World Report, and America On-Line offers Sports Illustrated, while Prodigy offers up the Los Angeles Times (via TimesLink). Each of these services offer many other mass magazines and some major newspapers. But the major on-line services don't offer little magazines. I suspect that marketing staff for these services view small circulation magazines as doing little to help attract hundreds of thousands or more new subscribers each year. America On-line's offering Road and Track or Car and Driver (that sell hundreds of thousands of paper copies of each issue) may help bring in a comparable number of subscribers.

More seriously, some of the on-line services have exclusive deals and synergystic relationships with specific magazines. America On-Line has carried Wired since 1994, and Wired recently published an enthusiastic article up about America On-Line (Nollinger, 1995). With cozy business relationships between a major content provider (Wired) and a major on-line service, the service is unlikely to also carry a magazine that parodies Wired, say, Mired. Companies that dislike a newspaper or TV station's editorial policy threaten to go elsewhere. With similar dependence on mass magazines, I would be surprised if the major on-line services were willing to carry a magazine like Adbusters that is critical of mainstream advertising practice. Cyberspace may seem boundless, but many people will pay to access it through only one service. I'm discouraged to find that the major on-line services today have very much less social political diversity in their magazine offerings than does a B. Dalton paper magazine stand!

These business ventures in electronic publishing couple electronic versions of paper publications and an on-line service that manages interactions with readers/customers. Electronic and paper publishing may be more synergistic than exclusive. For example, newspapers like the San Jose Mercury News, the Wall Street Journal, and the New Yok Times are experimenting with free or low priced electronic offerings on WWW. These offerings have some important value if one needs to see the Journal's stock market data the night before it appears in print, or if one wants some taste of the New York Times when travelling in rural Canada. However, these offerings are relatively lean when compared with the paper versions of these publications. And the publishers are experimenting with content, formats and pricing that will create synergy between the paper and electronic versions. One can obtain full electronic text of the New York Times via Nexis and the San Jose Mercury News through Dialog. But these on-line services charge prices closer to $60 per hour, and business firms seem willing to pay for these more elaborate on-line services.

Consumer-oriented on-line services like CompuServe suggest some key features of "the electronic databases" that Volokh mentions periodically and casually. These databases are not just freebie archives into which musicians and authors can toss their works for broad public access.

An author can certainly self-publish -- in paper or today, electronically, on the WWW. But working through intermediaries, whether electronic or paper, offers authors the possibility of enhanced visibility and the freedom of managing each individual sale. However, the most visible, reliable and "user friendly" of the major on-line services provide relatively small selections of standard-brands.

None of these major on-line services carry alternative press newspapers (e.g., LA Weekly, Village Voice, Boston Phoenix), magazines (e.g., The Nation, Mother Jones, Adbusters), or databases. The WWW is gaining popularity, as a medium for boutique publications as well as for major newspapers to experiment with electronic formats. The WWW is becoming an outlet for the idiosyncratic array of small circulation magazines called "zines." A paper magazine, Factsheet 5, lists thousands of paper zines and a few dozen electronic zines (e-zines) for interested readers. Factsheet 5 provides one way to learn about paper zines such as S.E.T. Free (published by the Society for the Eradication of Television, "an organization of people exposing the evils of television watching"), or e-zines such as Private Line: A Journal of Inquiry into the Telephone System (ftp via etext.archive.umich.edu/~pub/Zines/PrivateLine) and geekgirl (http://www.next.com.au/spyfood/geekgirl/) "a hard copy and webzine taking a unique blend of cyberfeminism, and information and humor to geek girls and boys around the world."). Electronic distribution might expand the audiences of these labors of love from say 500 regular readers to 25,000 readers. From the viewpoint of their authors and editors, the expansion can be enormous and exhilarating. But there is little chance that offbeat tiny circulation slightly dissident magazines like these will show up directly as directly supported services via providers like CompuServe.

Volokh is accurate in noting that on-line services are not limited by disk space in a way that magazine stands are limited by shelf space. But Volokh errs in thinking that cyberspace imposes no resource bottlenecks for on-line services. The major North American on-line services providers, like CompuServe or America On-Line, face other bottlenecks based on their attempts to economize on the time (costs) of skilled staff, and also an interest in maintaining an image of reliability. They want offerings that are relatively reliable (publish on a regular schedule) with technically competent staff who will routinely send them files in appropriate data formats. It is remarkable, given the low cost of disk space, that their magazine offerings are far more limited than that of, say, a Wallmart or Crown bookstore's newsstand, let alone a magazine stand at more metropolitan stores such as Barnes and Noble or Borders.

There certainly are ways to find offbeat books, magazines, and music sources today. The aficionado can subscribe to specialty paper magazines like Factsheet 5 for zines and Options for music that briefly review thousands of sources in each issue. The aficionado can visit specialty stores, and order by mail through specialty services. In an electronic world, one can find some specialty materials through special electronic catalogs (see, for example http://yahoo.com). I share Volokh's hope that there would be some way to bring musicians and their listeners, authors and readers in more direct contact. But his vision simply substitutes one set of intermediaries for another.

He moves from a scenario like:

author --> publisher --> store --> customer-with-car

to an electronic distribution system like this:

author-->electronic database/mall --> customer with PC/printer

The second scheme doesn't automatically bring the idiosyncratic musician or author into mainstream access. Much depends upon the structure of the electronic database or mall. If it is organized like the WWW, the musician or author has to face some key costs in setting up a little electronic sales shop (or renting space in one through an Internet service provider). If the musician or author prefers to work through an electronic middleman, such as an on-line music store or a CompuServe, then the intermediary may be selective in adding goods and charge additional fees for their value-added services.

The electronically mediated schemes are not likely to be much less expensive for readers or listeners than the material based schemes. They can offer other advantages, especially for people or organizations with moderate or large budgets who want to quickly search, access, edit, mix, archive, reformat, or integrate digital materials.

BIT PARTS: WHAT WILL BE ON-LINE

Volokh refers primarily to non-fiction books, and some of them will have the greatest chance of being read electronically. Pleasure reading, including most fiction, -- often read in bed or out of doors - is the least likely candidate for widespread electronic reading. Many non-fiction works can be useful in an electronic form, as well as in paper. For example, people can search large instruction a book, repair manuals and other bulky books for the few pages that they need and just print those on demand. As a scholar, I find that electronic collections of full-text articles are specially useful in searching for those that discuss a specific topic. Others find variants of this kind of service worthwhile; for they are willing to have their companies pay DIALOG $150/hr for such searching and printing.

Even so, paper has many charms. Individual articles and small books are relatively portable. They can be read without worrying about losing expensive equipment, plugging into nearby electric sockets, having batteries run dry, or wreaking havoc with an airplane's navigational gear during takeoff and landing. In the next 20 years, the costs of computers will continue to drop. But when will Volokh's electronic book (his cbook that is light, durable, small, book shaped with left and right high resolution screens, easily readable in bright sunlight, fast processors and huge memories, and a good handwriting recognition algorithm) with 20 hour batteries and priced like a Walkman become available? As long as the truly usable notebook computer (not the least expensive) is fragile, clumsy, limited in battery life, hard to read for extended period, even in darker spaces, and relatively expensive, it will not be a substitute for paper books and articles, even though it can supplement, replace, and even be more usable than some paper-printed reference works.

People read magazines for diverse purposes and under diverse circumstances. Volokh doesn't sound like a reader who is likely to casually browse a copy of GQ when he's in his barber's chair or scan People magazine at his supermarket checkout counter. Zines and other text magazines (like The Nation or The National Review) could be turned into electronic versions with relative ease. But magazines whose appeal is based on luring readers from one page to another with large photographs, especially in lush high-resolution colors, will have a much harder time developing appealing inexpensive electronic formats. (Even scientific magazines with numerous high-resolution color photographs and diagrams such as Science, Natureand Scientific American will have trouble). High-resolution high speed collating/binding color printers, as well as on-line information services, would have to be very cheap indeed for many people to be willing to print and bind their copies of GQ or Elle at home when they can buy subscribe for about $2 per issue and not worry about toner/ink or continuing to feed paper. Similarly, art magazines such as Art-Forum, with luscious reproductions on oversize pages seem to be unlikely candidates for rapid electronic replacement. As long as the cbook is not an item to be used so casually that it can be used easily at the beach or in the barbershop, there will be lots of life to colorful and advertiser-driven paper magazines.

Volokh treats magazines and news columns as informational media. And some magazines, such as the Nation or the National Review might appeal to similar audiences in electronic form as in print form. But many people turn to certain magazines partly for their entertainment value, even when that value is tacit. The production values of the page layout, the lively artwork and typography are part of the lure, as much as the plain-text versions of the same articles. Wired, for example, caught attention with its snazzy eye-popping graphics as much as with its libertarian social analyses of electronic media.

It is, of course, an empirical question about which formats will draw which readers to which magazines. Volokh hopes that the lower costs of electronic distribution can help off-beat writers reach larger audiences. But mass magazine publishers can compete by offering a visually more attractive magazine -- a format that seems to appeal to many more casual readers outside of academia. Production values, such as eye appeal, influences a magazine's readership as much as its text content. The production costs for snazzier magazines increase with the salaries, equipment and other overhead for the diverse artists and editors who have skill in working with complex media. While equipment costs are declining for a given level of aesthetic refinement, richer publishers can escalate the stakes by hiring the more skillful teams and more complex equipment for creating ever more refined layouts and artwork to retain existing readers and lure new ones. The richer publishers can also escalate the stakes in creating stronger content -- by paying higher salaries for stronger writers and use their money and cache to interview famous people who may interest their readers.

The slick magazines also play important and mundane social roles outside of the immediate use by individual subscribers and purchasers. For example, they provide recognizable culturally accessible (and thus reassuring) materials for the diverse clients of various professional offices, such as doctors offices. There is a large mass market for the various places that people will consume readily identified and culturally acceptable materials. Some of this mass market resides in fashion, and brand labels. But the women who wears Calvin Klein tee-shirts with its distinctive C-K logo are unlikely to be reading quirky offbeat magazines like geekgirl, in paper or online.

The concept of cultural legitimacy is important in helping understand the spread of electronic materials, such as electronic scholarly journals. Despite Volokh's passing claim that many scientific journals are moving to electronic distribution, it is no major scientific journals is distributed exclusively in electronic form. In fact, in 1995, virtually all of the major scientific journals are distributed in paper form to their subscribers. Today, electronic scholarly journals circulate in a separate netherworld, and they are not routinely archived by university libraries, unless they purchase them on CDs or in printed volumes. The nuances of this topic go beyond this brief commentary. The key idea is that most scholars seem to treat electronic publication as transient and insubstantial -- a value that is at variance with their beliefs in the durability of sound scientific research (Kling and Covi, in press). Volokh's passing comments about the likely popularity of scientific electronic journals focus on direct costs, and miss deeper cultural processes that shape people's preferences.

LET THEM SPIT BITS: WHO WON'T BE ON

Many people are served well by printed materials. Many people who obtain electronic materials today, seem to prefer to carefully read those that are more than a few screens in length by first printing them on paper. Electronic materials offer certain virtues, such as compact storage, searchability, and merging with other materials. Paper forms are often more portable, can be read during landing and takeoff, don't require special technical skills to operate the computer medium, and don't require one to use costly high-speed telecommunications services.

People can pass older paper books to friends and donate them to libraries. Those people with little money are particularly well served by the relatively inexpensive ways of sharing paper copies. They can use public libraries, share copies of newspapers in coffee shops and so on.

Like Volokh, I would like to see inexpensive, easy to use, and highly flexible computerized media. But I am less optimistic than Volokh that the kind of equipment that will turn electronic book reading into a pleasure will be priced like a Walkman and nearly as simple to operate. Of course, vendors are likely to hype new products as "finally easy to use" and to focus on the narrowest set of skills and costs that people need to use them.

One of the things that makes projections tricky are the unknown tacit costs of future software and services. In the last decade, the cost of computer hardware such as processors, hard drives and RAM, has plummeted by factors of 10 to 100. However, new software seems to drain many of these savings. For example Microsoft is releasing Windows'95, an operating system heralded for ease of use and adequate speed on fast and hefty computers. It won't work well with the computer power that most consumers were buying two years ago (eg., low-end 80486 processors with 4MB of RAM). While the cheapest PC may have declined by a factor of 10 in the last decade, the price of usable computing declines much more slowly. And reliance on on-line services can add additional hourly charges, phone line costs, and so on.

These expenses may be modest for North American households with middle class and higher incomes. However, those who live in poverty may find these continuing costs to be overwhelming. It's worth remembering that poverty rates have been rising in the United States. In 1989, 12.8 per cent of the population was officially counted as living in poverty, and that nummber had grown to 15.1 per cent (39.3 million people), by 1993 (Civille, 1995:176). Electronic books and journals are unlikely to be a wise or even plausible expenditure by people who are living from one pay check to the next, struggling to pay for necessities such as housing, food, and clothing. They may not simply be badly served; they will most likely be largely excluded from these electronic media worlds. In fact, Civille (1995) found ownership of home computers rose with income and education, but the relatioships were very skewed. In particular, high school dropouts and households that reported less than $15,000 incomes in 1993 were markedly unwilling to acquire computers for their homes. Civille notes ruefully that the number of Internet users in the U.S. will probably exceed the number of people living in poverty, and that pair of numbers may be a potent indicator of the of a divided society!

HOW ECONOMIES OF SCALE AND SCOPE FAVOR LARGE MEDIA AND COMMUNICATIONS FIRMS

The last 20 years have also been a period with some paradoxical social and economic changes. For example, the United States' economy went through a novel period of stagflation -- high inflation and recession -- in the late 1970s. In the early 1990s, we have been seeing "jobless economic growth." I suggest that we are likely to see yet another paradoxical process: concentrated demassification.

The arguments that computerization leads to the disappearance of mass audiences ("demassification") focus on certain economies of scale, such as the ways that authors who distribute a notice by computer networks can send out 1000 copies almost as easily as sending out one copy. In this view, advocated by Volokh, the reduced costs of electronic distribution should automatically favor small producers. This view is given some additional weight by the continual closing of daily newspapers in the United States, the decline of national magazines, such as Life, and the growth in the number of specialty magazines.

Volokh assumes that demassification is a relatively automatic process that is driven by the economics of electronic transmission. The advocates of "automatic demassification" sidestep the key question of who pays to build the electronic networks. Volokh, for example, is enthusiastic about the possible use of fiber cable because it might offer exceptionally high bandwidths and uses many interesting examples based on the Internet. The Internet was built at major public expense, although the privatization of the Internet will shift the costs of expanded developments to the private firms and their customers. Fiber networks have been the province of private firms, and have developed rather slowly. In the Spring of 1995, Time Warner CEO Gerald Levin claimed that the infobahn will consist of:

" powerful servers to store all the content, ATM switching, fiber-optic distribution networks to neighborhood nodes followed by hybrid fiber-coax lines into consumer homes, set-top boxes to translate the digital signal for TV viewing and, finally, a vast morass of applications software to run the whole system (quoted in Krantz, 1995)."

Network architectures like these are not inexpensive and both consumers and communications firms are sensitive to their costs. Wiring a home with traditional coaxial cable costs about $500, while wiring the same home with fiber can cost about $3000 (Foster, 1994). Consequently, communications entrepreneurs like Time Warner's Levin suggest using hybrids of coax and fiber for residential use. But these cable costs are a small part of the underlying communication system which includes new higher-speed switches, huge file servers, and new custom software to integrate it all. Some of these development costs are admit good economies of scale, and thus favor larger firms.

The costs for designing, building, operating and continually upgrading the computer systems that serve millions of people are also high, but they also support economies of scope as well as economies of scale. Economies of scope allow a firm to add more diverse or customized goods and services at lower marginal cost than starting them from scratch. In the case of on-line services such as CompuServe, economies of scope enable it to provide new services, such as simple access to on-line books to its millions of subscribers world-wide, than would a new on-line bookstore. The combination of economies of scale in the networks and economies of scope in the diversity of services favor large firms as electronic intermediaries for audiences of millions of subscribers.

In a fully privatized economy, people who use a communications network will have to pay for its development, and not just the marginal costs of using it. The economies of scale and scope in building the computer and network infrastructures favors a few huge media firms such as Time Warner or large on-line services, such as America On-Line, as becoming the dominant providers of household electronic services during the next decades. I refer to this scenario as concentrated demassification.

We can get a feel for concentrated demassification by viewing the way that major chain stores such as Walden Books, B. Dalton, Crown, and Barnes and Noble dominate the bookstore industry by emphasizing best sellers and large publishing houses. Unlike these dominant chains, the larger independent and university bookstores sell works from more diverse publishers, including some very small presses. There may be a decline in the sales of the best-sellers, and the major chains will still limit the range of available titles. In a concentrated demassified market for electronic materials, such as on-line magazines, a few large intermediaries can similarly limit the range of choices available to their customers.

Volokh assumes that physical bookstores offer limited selections because of their costly shelf-space. I have indicated that on-line services seem to face other bottlenecks beside the costs of storage, such as skilled staff time to manage relations with diverse publishers. The large services are appeal to national (and international) subscribers, and thus share some key features with mass media. They may refuse to carry electronic materials whose contributors frequently criticize their business practices or that offend a significant number of their subscribers or cooperating businesses. In fact, at least one major on-line service, Prodigy, has tried to make a selling point of restricting the range of materials that it carries so that they will not offend many mainstream families (and their children).

Despite my criticisms of Volokh's hope that inexpensive electronic distribution of music, magazines, and books will automatically erode mass markets, I am generally optimistic that new electronic networks will enhance the vitality of boutique markets. The ability of authors and small publishers and others to publish electronically is not automatic. Much will depend upon whether the Internet (and its successors) will be organized in ways that allow open access to anyone who wishes to make their materials available, and upon keeping the costs of open access to be relatively low.

POWER SHIFTS on THE INFOBAHNS

I have indicated how Volokh's CyberPlatonic arguments about electronic distribution undermining mass media are wildly exaggerated. I do expect that many of the services that Volokh describes to develop, including more electronic magazines and customized newspapers. Some of these will develop in the boutique market segment, and can help substantially expand the visibility of tiny magazines. Others will be electronic versions of mass media, such as searchable back issues of Sports Illustrated or customized daily versions of the Wall Street Journal. Many publishers are experimenting with diverse electronic formats, and there is a lot of uncertainty about which formats, distribution arrangements, and pricing systems will prove to be most sustainable and popular.

Despite the excitement of the new in the diversity of electronic publishing formats, we have much to learn from the last few years of electronic publishing and decades of experience with computerization (Kling, 1991; Kling, 1992). On-line publications lead people to rely upon intermediaries for electronic services. North American on-line services operate free of the regulatory requirements that require television to open access to certain content providers or requirements to provide inexpensive basic services (like phone companies). Analysts like Linda Garcia (1995) and Richard Civille (1995) observe that guaranteed low cost access and even subsidies for poor people will be required to make on-line services accessible to all. Otherwise, if on-line services become the dominant media for political discussion, the poor will be cut out. I am less worried about this prospect in the next two decades primarily because many paper magazines and newspapers will continue to be viable by virtue of their relative versatility, portability, and low effective costs.

I have developed some elements of a Cybermaterialist analysis of the likely structures of electronic media markets in the next two decades. This analysis, based on web models, underlines the role of electronic infrastructure in mediating between authors and readers of electronic texts (Kling, 1992). My examination of the strucure of on-line services suggests that we are more likely to find some form of concentrated demassification, rather than the complete replacement of mass media markets by a vast number of small boutique publishers. High quality intermediaries are costly and those with millions of subscribers will be owned or operated by large firms whose interests do not always support lively critical magazines and newsletters circulating widely. The boutique and mass media magazines will circulate through different electronic distribution channels that will maintain the segmentation of these media markets. It is possible that some power will shift from publishers to on-line information services, but the economics of these services do not require a major shift of power from publishers to readers.

Cheaper speech transmission can facilitate many interesting services, and it can enable people outside of the mainstream to reach many more readers. But it won't automatically give us a bloodless democratic revolution.

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Acknowledgments: I appreciate Robert Horwitz's invitation to write this article, and discussions with Phil Agre, Steve Fuller, Mitzi Lewison, Mark Poster and Jon Wiener that helped deepen its content. Research to support this article was provided, in part, by U.S. Department of Education Grant #R197-D40030

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Fuller, Steve. (1995). "Cybermaterialism, or why there is no free lunch in cyberspace." The Information Society. 11(4):325-332.

Garcia, D. L. (1995). Common carriage: Access to the network in a knowledge-based economy. Telecommunications (Americas Edition) 29(1)(Jan), 51-52.

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Kling, R. & Covi, L. (1995). Electronic Journals and Legitimate Media in the Systems of Scholarly Communication, TheInformation Society11(4), 261-271.

Kling, R. & Lamb, R. (1996). Analyzing Visions of Electronic Publishing and Digital Libraries. In G. B. Newby and R. M. Peek (Eds.) Scholarly Publishing: The Electronic Frontier. Cambridge MA: The MIT Press.

Krantz, M. (1995). These gizmos really do work. Mediaweek v5, n20 (May 15):28-32.

Nollinger, M. (1995). America, Online! Wired 3.09 (September) 158-161, 199-204.

Schement, J. R. & Curtis, T. (1995). Tendencies and tensions of the information age : the production and distribution of information in the United States. New Brunswick, NJ. : Transaction Publishers.

Underwood, B. (1995). Personal printers get professional. PC World 13(8)(August):211-212, 215-220, 224, 228-230,232

Volokh, E. (in press). Cheap Speech and What it Will Do. The Communication Review.

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Last modified 03/27/02