The Digital Skeptic: Your Summer Reading List Destroys the Internet

NEW YORK ( TheStreet) -- It's no surprise a crime lawyer and novelist such as Scott Turow knows a scam when he sees one.

"It's pointless to have rights," he said to me last week, "if anyone can go to a search engine and pirate your work."

Turow -- who wrote Presumed Innocent, The Burden of Proof and about a half-dozen other hit legal novels back when the law was still a good gig -- is not just another artist pissed at how Google ( GOOG), Bing ( MSFT), Yahoo ( YHOO) and other Web services openly direct users to stolen material. He's president of the New York-based Authors Guild and very much literate in the ways of making money in new media.

Though he declines to talk specifics about his success in e-books and online content, those close to the frontiers of e-publishing confirm that established writers such as Turow are thriving in these digital days.

"For the bigger writers, times have never been better," Paul Aiken, executive director of the Authors Guild, told me last week.

What makes Turow the angry new-media man, therefore, is a deeper realization: His digital-age success comes at the expense of the larger publishing market.

"The value of copyrights is being quickly depreciated," he wrote in a popular op-ed piece in The New York Times this month. This is "a crisis that hits hardest not best-selling authors like me, but new and so-called midlist writers."

The news is, Turow is far from the only serious author wondering about the deep dysfunction in the digital age. In fact, investors face a fast-organizing school of skeptical scholars who collectively question the core values -- and valuation -- of the Information Age.

The school for skeptics
The right intellectual doorway to use to enter this new "School for Digital Skeptics," I think, is Chris Ruen's book, Freeloading: How our Insatiable Hunger For Free Content Starves Creativity.

Ruen recalled to me his skeptical epiphany: "I was a hipster working in a Brooklyn coffee shop," he told me. "And I realized that the famous musicians in the place were making as little as I was."

It didn't take Ruen long to figure out what made pro musicians as poor as he was: The "freemium" Web economics of giving away content and hoping to make it up with volume and live performances. It simply was not paying the bills.

"When I started to question that, I received a lot of hate mail," he told me. "But thankfully that was drowned out by a positive reaction that at last somebody was talking about this problem."

Other writers corroborate his analysis on how this content ghetto of ours was built.

Berlin-based writer Robert Levine has crafted an extraordinary history of the digital collapse in his book Free Ride: How Digital Parasites are Destroying the Culture Business, and How the Culture Business Can Fight Back. Levine breaks down the key mid-1990s legislative steps that gave us this no-value Web-O-verse.

When we spoke last week, Levine raised a fascinating point: Web companies engaged in a sophisticated marketing and branding campaign that pushed free information over other options for the Web.

"I found big businesses got built out of the vocabulary of the civil rights movements," he explained. Levine points out that Google lobbyists are not above using the speeches of such giants as Dr. Martin Luther King as examples of the type of Web content that should be free for all.

"They effectively touched on the cord of individual liberty over the value of private property," he said.

Even more compelling, the net effect of the digital decline Ruen and Levine describe is now being calibrated by yet more writers. In #digitalvertigo: How today's online social revolution is dividing, diminishing and disorienting us, Andrew Keen confronts several of the foundational arguments of the Web -- including the key notion behind billions in enterprise value -- that a networked society is a more valuable society. Keen takes on LinkedIn ( LNKD) founder Reid Hoffman that the connected professional was a more productive professional.

My book, writes Keen, "is a challenge to Reid Hoffman that we are a priori social animals."

Summer reading for shorts
Not only do all these writers make excellent summer reads, they create a critical intellectual foundation that gives investors the confidence that the flaws of the digital age they sense are very real.

And they give market participants the certainty that when the digital economy finally recalibrates -- which it certainly must -- they will be that much more prepared to profit from the shift.

Short traders, you have your beach reading.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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