Clay Shirky’s latest column proposes an interesting idea: That not leaving behind the big, dumb business models could be catastrophic.

It comes out of a theory that discusses how civilizations collapse:

Tainter’s thesis is that when society’s elite members add one layer of bureaucracy or demand one tribute too many, they end up extracting all the value from their environment it is possible to extract and then some.

The ‘and them some’ is what causes the trouble. Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond. In retrospect, this can seem mystifying. Why didn’t these societies just re-tool in less complex ways? The answer Tainter gives is the simplest one: When societies fail to respond to reduced circumstances through orderly downsizing, it isn’t because they don’t want to, it’s because they can’t.

In such systems, there is no way to make things a little bit simpler – the whole edifice becomes a huge, interlocking system not readily amenable to change. Tainter doesn’t regard the sudden decoherence of these societies as either a tragedy or a mistake—”[U]nder a situation of declining marginal returns collapse may be the most appropriate response”, to use his pitiless phrase. Furthermore, even when moderate adjustments could be made, they tend to be resisted, because any simplification discomfits elites.

The system needs change to survive.

While it’s not always useful to try and fit large scale models over smaller ones, in this case I think there are some useful lessons to be drawn from the idea that our current inefficiencies and rapid shifts may actually be fundamental to the survival of media.

Here’s the money quote:

To pick a couple of examples more or less at random, last year Barry Diller of IAC said, of content available on the web, “It is not free, and is not going to be,” Steve Brill of Journalism Online said that users “just need to get back into the habit of doing so [paying for content] online”, and Rupert Murdoch of News Corp said “Web users will have to pay for what they watch and use.”

Diller, Brill, and Murdoch seem be stating a simple fact—we will have to pay them—but this fact is not in fact a fact. Instead, it is a choice, one its proponents often decline to spell out in full, because, spelled out in full, it would read something like this:

“Web users will have to pay for what they watch and use, or else we will have to stop making content in the costly and complex way we have grown accustomed to making it. And we don’t know how to do that.”

But it the more turbulent and fluid environment of games, we do know how to do it. And the ones who accept that are the ones who are going to thrive.

The good stuff starts at about 3 minutes in.

The first generation of digitized media tends to closely relate to our analog experiences, but quickly takes advantage of the flexibility of the virtual medium. Early word processors were much more like a typewriter, for instance, then the advanced editors we have today.

As usual when these huge valuations come around, people tend to question whether or not the company is really worth it, especially when you consider they pulled off this kind of value in only 18 months.

But, as Venture Beat notes, this is all about the size of the audience. And let’s be honest here, games have never been this popular before. Even casual’s attempts to be mainstream meant titles only sold a couple of million at most.

Zynga has changed the game because they have done the single most important thing that you need to do in order to succeed online: They found the audience. Then they followed that up with a business model that works. It’s shown us an effective way to business in a world where the old media is still fighting their own biggest fans through draconian laws and DRM.

These are television numbers, and while there are many things that can (and probably will) go wrong as this business is further defined and consolidated, there is no doubt that things are different now then the were a year ago, and we won’t be going back.

One thing that’s important to remember as the industry pushes forward is that while the actual game is the most obvious content, it’s not necessarily your actual business. In the end what makes your money is the real business that you’re in, and we’re giving the content away.

Newspapers have, for the better part of the last century at least, been using news as an effective way to deliver ads into their reader’s homes.   That’s not to say that the reporting isn’t a key feature of the user experience, but in this article on why newspapers are failing, there’s a very interesting point:

Remember “shoppers,” the poorly designed throwaway publications filled with tacky little ads? Daily newspapers are high-end shoppers. They spent a lot of money on original content to class up the operation and give people a reason to ask for the ads to be delivered. Long before the web displayed the power and leverage of critical mass, newspapers benefited from it; once you got the franchise in your particular locale, you tried not to stir up trouble, because it just distracted you from time better spent cashing checks.

The newspapers had found that the could afford to lose money on distribution by making it up in ad-revenue, along with user subscriptions. Sound familiar?

Luckily for Social Games the user revenue portion of the model looks to be rapidly outpacing advertising as a key factor in monetization. That’s important because, like many things on the internet, the cost of generating a new, and more effectively targeted platform for advertising is so cheap that unless you can deliver a focused demographic in large numbers, ad revenue is always going to be minimal.

Games also have another advantage, which is that our relationship to our community is more explicit. News  media is often disdainful of the fact that they were ever a “social media”. They think that they own their audience, and are pushing hard to get government to enforce what is, at it’s heart, a social relationship between the people who make media and the people who consume it.  And once you think you’re speaking for your audience instead of to them, you’ve already begun to unravel the bond with your customer.

So why is gameplay imoportant? Because while gameplay may not be the core of your business, it is the heart of the relationship with your audience.  The experience you are giving them is the reason that they engage with you each day, and are willing to give you their money.

And because we have such strong methods of tracking our users, we can more effectively streamline that relationship.

In this article for Forbeshe not only discusses why Amazon’s opaque DRM standards are eventually going to be the device’s biggest hurdle, but also the subtle, but important differences that have made the iPhone work even though it’s a locked down device.

Amazon’s Kindle file format doesn’t provide support for tables or for so-called monospaced fonts, two formatting features that we use heavily in our line of technical books. And there is a viable alternative: Epub, the open format from the International Digital Publishing Forum, is based on the Web’s native format, HTML, and provides full table and font support. This is the first “strategy tax” paid by those who embrace proprietary platforms: They can’t support the needs of every niche and must prioritize their support for mainstream needs.

The single point of purchase was also a non-starter for us, since my fundamental understanding of information marketplaces is that they grow bigger and more lucrative for everyone when there is a rich ecosystem of cooperating players.

If you’re interested in understanding why open standards work for business and growth, it’s worth a read.

And that makes sense. It’s a relatively "hot" medium for the Internet, demanding that you pay attention to an ongoing conversation where anyone you’re chatting with can demand as much of your time as they like. And there’s no real filters.  The person demanding a response can be anyone from your best friend to that "so h0t grl with sexxxxy pics" that would very much like you to click on the link to her site, please.

But spam or no, before the rise social media IM was the primary way to hang out with people online. These days, between Twitter, Facebook and SMS messages I almost never open up my chat client at all. And the times I do end up in a messaging session it’s usually inside of another website, like Google Mail, Skype orin Facebook.

But if the old-fashioned one to one style of IM is dying, or at least evolving beyond recognition, it’s doing it quietly, with no one even bothering to report on the disappearance of what was once a major method of communication on the web.

I’ve been pretending in my head that I’m a newspaper exec. When I do that I keep beating myself around the face. Why? Because the newspaper industry keeps giving the geeks free meals. Let’s study the free meals:

Free meal #1. Giving away classified advertising to Craig’s List.
Free meal #2. Giving away photography to Flickr (look at the photos from the Chinese Earthquake, why didn’t this happen on a newspaper branded site?).
Free meal #3. Giving away front page news to blogs like Huffington Post.
Free meal #4. Giving away “small” community news like births, deaths, birthdays, etc to Facebook.
Free meal #5. Giving away real-time news to Twitter.
Free meal #6. Giving away news distribution to Google News and Amazon Kindle, among others. With new sites like Kosmix coming on strong (hundreds of percent of growth month over month).
Free meal #7. Giving away restaurant reviews to Yelp.
Free meal #8. Giving away traffic information to Google Maps.
Free meal #9. Giving away celebrity news to Facebook and Twitter. (Why is Oprah on both of those, and why didn’t the newspaper industry lock up Oprah and keep her on a newspaper brand?)
Free meal #10. Giving away local news to Topix (at least that was funded by a newspaper brand).
Free meal #11. Giving away business news to Yahoo Finance and Google Finance (and something new that will get announced tomorrow).
Free meal #12. Giving away news ranking to Memeorandum.
Free meal #13. Giving away astrology to Astrology.com.
Free meal #14. Giving away comics to Comics.com.

What is their latest giveaway? Crowd-sourced news. I visit Twitter Search every day to find out what is “hot news.” That’s something I used to look at newspapers and older media for (radio, TV) but Twitter is just plain better at telling me what is trending.

There’s some breathless enthusiasm here that I think is wishful thinking, but ultimately it’s about being intelligent enough to recognize the value of what you actually have in the new media landscape, and the papers do seem to be, once again, trying to save something that doesn’t have any value by pretending it does, and hoping the can convince others to legislate that for them.