The Cult of the Amateur: How Today’s Internet is Killing Our Culture. By Andrew Keen. (Currency: June 5, 2007). 240 pages, $15.61.

For aficionados of mainstream culture, these are not happy days. TV networks, record labels, publishing houses, and movie studios are all threatened by the popularity of Internet-delivered digital media. These establishment players struggle with digital piracy of their core products, but a deeper threat comes from the fickle consumer, whose hours of glossy magazines and mass-market film are now being eaten up by blogs and YouTube.

The media marketplace gives people what they want. Where huge audiences tune into the same cultural product, large firms grow up to lavish resources on its creation. As the audience fractures, so do the revenues, and the big-ticket cultural productions (record albums, big city newspapers) no longer make economic sense. That’s exactly what we are seeing now.

The consumer of culture is now, in a startling range of cases, also a low-cost producer, blogging or sharing home videos for the sheer thrill of attention. That creates a surplus of cheap cultural product, and makes it hard for the expensive stuff to compete. Andrew Keen thinks the expensive stuff—produced by more or less well-paid experts and endorsed by a symbiotic class of professional cultural critics—is the good stuff. He’s not pleased:

The cult of the amateur has made it increasingly difficult to determine the difference between reader and writer, between artist and spin doctor, between art and advertisement, between amateur and expert. The result? The decline of the quality and reliability of the information we receive, thereby distorting, if not out rightly corrupting, our national civic conversation.

The argument is rich with specifics. Those bands on MySpace just aren’t as good as the major label acts, he says. YouTube is no substitute for a network’s scripted drama. And the free, user-edited Wikipedia is less reliable than the expertly-edited Britannica. There may be good material out there, but we have small and shrinking hope of ever finding it amongst all the dreck.

Sooner or later the establishment will either find a way to make its current activities profitable, or else stop doing them. Keen fears the latter outcome. This deserves serious thought. We really might end up failing to support individually the culture we collectively want.

Alas, the author is not an economist—and when he starts to talk about economics, the wary reader will wish he had taken his own advice and left it up to the experts.

Consider a typical example from the book: Super Bowl ads. The advertising industry says a professional 30-second spot costs about $381,000 to make. Instead of hiring an agency, Frito-Lay in 2006 ran a contest to let users make their own ads for Doritos. The company, Keen writes, “paid a mere $10,000 to each of the five finalists in the competition, leaving $331,000 on the table. That's $331,000 that wasn't paid to professional filmmakers, script writers, actors, and marketing companies—$331,000 sucked out of the economy.”

How to decipher this? Keen presumably does not mean to be taken literally. The $331,000 that Frito-Lay saved remains very much a part of the economy, happily for the company’s management and shareholders. Maybe it was passed along as dividends, or reinvested in new factories or trucks—in any case, it did end up somewhere useful.

Sooner or later the media establishment will either find a way to make its current activities profitable, or else stop doing them.

Maybe Keen just intends to say that the money has been taken out of the cultural ecosystem and won’t now be devoted to creativity. But in truth, we don’t know where the money went. PepsiCo, which owns Frito-Lay, sponsors a range of cultural activities at Lincoln Center—including live performances and an outdoor art installation. The exact amount of money involved is not disclosed, but according to the company’s published data on what it terms “Corporate Citizenship,” it’s more than $100,000. In total, the company gives away several million dollars a year. If the company’s switch to cheaper ads ended up contributing to its generosity toward the fine arts, I doubt Keen would object. And if, instead, it gave the money out as dividends, there’s scant hope of tallying the various ways in which shareholders may have plowed those earnings back into culture.

In any case, if Lincoln Center were ever threatened with closure because people were too busy watching YouTube to buy their opera tickets, it wouldn’t go quietly. Those who freeload off of money-losing newspaper web sites, and make illegal copies of movies and music, will ultimately have to decide whether to support these institutions financially or allow them to die. Despite ill health, the record industry is still churning out its records, and NYTimes.com is still there for those of us who want to read it. Things are changing fast, but the pace of change doesn’t make it a sure thing that the establishment will go down to defeat. It just makes predicting the future trickier.

One of Keen’s worries is that the new media environment makes it harder to spot and screen out conflicts of interest and biases. But when he leaves media creation to talk about his other major focus, piracy of the content that already exists, he demonstrates that one needn’t be online to be overly credulous. He cites the music and movie industry trade groups’ estimates of the extent of digital piracy, without any mention of the complicating incentives to which these bodies are subject. Of course, the digital piracy problem is a severe threat, perhaps even an existential one, to the existing content industry. But no problem is so great as to be incapable of exaggeration, and nobody has a greater incentive to exaggerate than do the trade groups whose studies Keen cites:

According to a joint 2006 report by European (IFPI) and American (RIAA) researchers, forty songs are actually downloaded for every legal music download. That adds up to 20 billion songs illegally downloaded in 2005, compared to a legal digital market of 500 million tracks, resulting in a paltry $1.1 billion in revenue…

At the iTunes price of $.99 a song, the 20 billion digital songs stolen in a single year adds up to an annual Bill of $19.99 [sic] billion, one and a half times more than the entire $12.27 billion revenue of the US sound recording industry in 2005. That's $19.99 billion stolen annually from artists, labels, distributors, and record stores.

Here again, the economics are wrong. Demand for music is, to some degree, price elastic: People will consume more of it at a price of zero than they do at a dollar a pop. If the industry got its asking price every time one of its tracks were downloaded (as it should!) then there would not be 20 billion downloads.

In his last chapter, Keen’s tone changes. He marvels that CDs still cost $16, and wonders why the industry continues to "cling to its archaic pricing structure." The question seems incongruous, following as it does a 200 page argument that that the archaic pricing structure of the music industry will inevitably suffer the same fate as our highest cultural aspirations do, whether that fate be good or ill. The question of how cultural institutions can change to adapt to the Internet belonged at the start, not the end, of this book.

For every smart institution, there are a bunch of hardworking people trying to figure out how to make it work. Digital downloads (the paid, legal kind) are booming, Tivo and other new video tools are opening up new business models for movies, and book stores are learning to focus on the kind of social experience—flirting, coffee and pastry, book readings—that a web site can’t deliver. Meanwhile, some established players have decided that their excellent work no longer requires old-fashioned support. Major bands release music digitally direct to fans, journalists blog and collect micropayments from their readers, and on and on.

The future may not be clear, but it is bright.

David Robinson is managing editor of The American.