Upheavals

Learning to think in analogue

As regular readers will know, I don’t agree with everything about Chris Anderson’s FREE theory. But two key points have been playing on my mind recently, and now it’s time to share.

The first is Anderson’s observation that every abundance creates a new scarcity - and vice versa. Absolutely agree with that. The second is that, as the new abundance, the price of digital is falling quickly, and with it everything available in a digital format - whether it’s computers, music or (with the success of Kindle) books.

So, what’s the new scarcity?

I think it’s analogue - and by that I mean the things that are hard to reproduce quickly and with minimal effort, the “hand-crafted” stuff.

Books used to be like that. They could be reproduced, but only with a high level of determination. Now that they’re moving online and electronic, they’ve gone digital. And if Anderson’s right, their price will drop accordingly - because once a book stops being hard copy, and exists instead as a file or a link, reproduction time and difficulty plummets.

The new law of market physics it seems to me is:

Ability to charge for value = inability to forward effortlessly

Special experiences, for example, retain their value because they’re not easily cc’d. TED has huge analogue value. Sure, I can watch the videos but the atmosphere, the conversations, the networking - these are things that are affect each attendee individually and so are impossible to reproduce generally.

To get what TED gives, you have to be there. And you have to keep coming back and paying again and again to access more TED experiences. Because every experience is different, the price doesn’t drop.

So what does that mean? It hints at an irony: a business model where the thing that makes you popular is not where you make the money. And the things that make you money are sufficiently removed or different from what makes you popular in order to be limited. Cheap or free records, but expensive concerts, for example. Because the record is easily reproduced, but a concert atmosphere is not. It also hints at things like concert-only versions of songs or indeed concert-only songs.

And that in turn offers the possibility of a fully inverted business model, where the record becomes the marketing for the concert (not the other way round).

POSTED: Tuesday, 15 September 2009

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