Stop selling scarcity

If you are selling a scarcity — an inventory — of any nonphysical goods today, stop, turn around, and start selling value — outcomes — instead. Or you’re screwed. Apply this rule to many enterprises: advertising, media, content, information, education, consultation, and to some extent, performance.

* * *

Start with advertising. I wrote in my report on a local advertising sales roundtable we held at CUNY that sites should shift from selling media — their own inventory of banners and buttons — to selling services for merchants, helping them succeed through networks of local sites and also through Google, Yelp, Twitter, Facebook, email, mobile, and whatever comes next … helping them with their business. The merchant doesn’t give a rat’s ass about your limited supply of space and eyeballs; the merchant cares about sales and return on investment. As Max Kalehoff advised in a comment on that post, “Sell the outcome.”

At a Paley Center breakfast this week, Sirius CEO Mel Karmazin — a titan of ad sales in broadcast — was blunt about the current state of advertising in media: “There’s just too much supply,” he said, “and I don’t think that supply is going to go away. The leverage is on the part of the buyer as opposed to the seller.” When there’s limitless supply, pricing is not based on supply and demand. These are the new economics of media.

Thus the value is in results. That, of course, is what Google realized when it sold clicks instead of pixels, aligning its interests with those of the advertiser and sharing the risk, which motivated Google not to sell scarcity but to create abundance in the form of AdSense. This, for Google, produced a practically limitless supply, which in turn yielded ever-better relevance, effectiveness, and ROI.

Or as Karmazin famously told Google in Ken Auletta’s book: “You’re fucking with the secret sauce.” He recounted his reaction to Google’s strategy at the breakfast: “You want advertisers to know what will work and what doesn’t? That’s bizarre…. Oh, my God, I don’t want to be in that business.” In most media, Karmazin said, the lowest rates were paid by direct response: “The people who knew what worked were the ones who paid the lower rate.” That bubble is irreparably burst.

* * *

So what are you to do if you are media? First, you have to align your interest with marketers if you have any hope of still helping them, still adding and then recognizing value. Marketers will, as Bob Garfield so forcefully states in The Chaos Scenario, build their own, direct relationships around media, without advertising. Or as I’ve been obnoxiously stating it, advertising is failure — it’s what you do when you don’t have a valued relationship.

Relationships. That’s what the business of media must become. In our New Business Models for News, we began — just began — to project the value of the relationship a new media service can have in its community: creating events; educating; gathering and selling data; selling goods directly (as the Telegraph does, quite successfully); running networks to help others succeed; saving money by collaborating. This is why the notion of charging your best customers — cutting off your richest relationships with a toll booth — seems so dangerous to me.

Instead, we must also align our interests with those of the community, with the people formerly known as the audience, helping them do what they want to do, adding value and recognizing it that way. We need to make ourselves their platform.

Content is not a scarcity. You can no longer sell it as such. That’s one of the morals of the Demand Media and Wikipedia stories: Like it or not, for many different motives, there’s always someone out there who can create content that serves a similar purpose, that answers the same question, that is just good enough. Selling content as if it were a consumable — indeed, calling the people who use content consumers — is now outmoded.

Information is not a scarcity, or at least it isn’t scarce for long. Yes, when I don’t know something, then the answer is scarce. But now it’s much easier to get that answer; Google will have it in .3 seconds and if it doesn’t and if enough of us ask it, then someone at Demand Media will write it for me and the rest of the world for $20. When news is new, its value is scarce (as Thomson Reuters Tom Glocer says, his information has its highest value in its first 3 milliseconds); but then that value deflates.

The new media economy gets even more complicated because putting our content and information out there is how it gets distributed, how we find new people, how we build new relationships, how we realize new value.

You can no longer afford to make yourself scarce.

* * *

In education, we’re fooling ourselves if we think that we can maintain our scarcity-based economy: only so many chairs to soak in the wisdom of that teacher. It’s a wildly inefficient system — especially in our industrial-age knowledge factories that try to turn out people who memorize the same answer instead of invent new ones.

Earlier, I’ve speculated about the idea of an educational ecosystem with star professors whose lectures are widely available (as is the case with MIT and Stanford) and who gain value (books, speaking gigs) through being broadly distributed. Then we have local tutors who give us the specialized instruction and consultation we need.

Thus we have performers and consultants. There is still value in unique performance. We will continue to buy tickets to concerts by stars (but we won’t pay for the Muzak covers of their songs on elevators). We will buy books. We will pay to sit in a movie theater with popcorn. The new competition in the case of media and performance isn’t that someone will make a good-enough version of what we do but that there is more call for the public’s attention.

Quality is a scarcity. But it is a real scarcity. You may think that your newspaper’s version of the Super Bowl is better than the next, but good luck trying to build a business on charging for it. No, you have to be recognized by enough people as being the best — so many that they spread the word for you — if you want to have a blockbuster. It’s still possible. But in an economy of abundance, it’s ever harder and thus riskier and more expensive to get that hit.

This is also why value shifts from creation to curation: in a world of overabundant content, it’s the filters we need.

If you’re not the star performer (or professor), if you’re the consultant (or tutor) who works much more locally, you do indeed have a scarcity: your own time. That scarcity works against you. So it’s in your interest to scale as best you can. That is why people like me blog. The more we share our ideas, the more attention we draw, the more business we can get, the more efficient we are. I’ve even tried to convince big consulting companies and headhunters and international organizations of this; didn’t get far.

* * *

The real story in nonphysical goods is one of deflation. Value in once-scarce — well, once-controlled — commodities like news, information, and advertising decline as the internet explodes creation and competition. The internet also destroys the ability of many to control distribution and thus value. But at the same time, the internet drastically increases efficiency thanks to platforms and open distribution and the ability — no, the need — to specialize and collaborate. The bottom line in many of these enterprises — as we tried to show in our New Business Models for News — is that they may be profitable, only smaller. Both sides of the ledger deflate.

This is why the old controllers of scarcity have such trouble rethinking and remaking themselves for the economy of abundance. Their reflex is to control more, when that only decreases value.

So stop selling scarcity. Scarcity has no value. Results and efficiency do.

* * *

Then again, people are spending big money — billions — for a virtual market with a virtual scarcity in virtual goods: pixels on a screen. It’s absurd, of course, that anyone can create a scarcity and market value for fictional food for fictional cows, but it’s making money. In this economy, I think we see both the dying gasp and a parody of scarcity.

* * *

  • Interesting post, Jeff. When it comes to your final paragraph, while virtual goods are strange and even silly to some, they really just represent a way for people to set their own price level for a game/service they are enjoying (as opposed to a one-size-fits-all subscription model). There are different ways to imbue value into a virtual good and artificial scarcity is an effective and legitimate one as long as the game is a closed system. Farmville is a closed system – Zynga controls the currency and supply of virtual goods. Second Life is not a closed system (content is user generated), so Linden Lab makes money off of different resources they can control: virtual currency and servers (virtual land).

  • Jeff, thank you for this. But I digress. If you’re selling “any” type of good, you should abandon the scarcity mindset. The supply deficit may create a buyer frenzy, but is it worth it?

    Personally, I dislike companies who use this type of sales tactic. All it does is show me that the company’s production line isn’t efficient and that their product isn’t worth it.

    For example, let’s look at the Barnes and Noble Nook. A few weeks ago I was primed to buy this e-reader. I walked into the store and discovered that it was sold out due to overwhelming demand. They told me it would take a few weeks before I could get the product I wanted.

    What happened? Apple announced an iPad. And Barnes and Noble lost a sale. The Nook wasn’t ready to make people wait because the product, in my opinion, wasn’t good enough.

  • Jeff, brilliant! And a call old media which is still struggling to safeguard news as privileged information which needs to be paid for in order to be accessed, would do well to heed. Like Giff above I will say that your last call on virtual goods is only valid if we define them as digitized formats of old media (i.e. news and paid content). One liberating aspect of the new age is that much which was a limited commodity (hence scarce) such as knowledge, can now be re-packaged and made widely accessible at a low price (in the form of a YouTube video or an eBook). This further leads to a democratization of key knowledge and key knowledge holders and a spread of information throughout the system in an entropic, almost, format. Bar this quibble, I find this piece fantastic. I can also see why large companies will not want to pay attention just yet.

  • The “news” that, uh, news is no longer a scarce commodity is also not in scarce supply. It is still a huge mistake to view so many of these economic “facts of life” through a U.S. media economy lens when there are so many other interesting models and systems still thriving in other markets.

    • Such as? I work in European markets quite a bit. Want to give examples, please, rather than merely snark?

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  • Before your fanboys go overboard, Jeff, you wrote what appears to be a highly successful book yourself, in what sense was this abandoning scarcity and selling outcomes ? Everyone who reads this column will know it was about Google. Last night, they spent $5m, as reported, on a TV ad. My goodness, Google has failed !!

    No, actually all this proves is that the future will be much more nuanced and textured than the black/white bipolarity you present here.

    • Here here! Advertising is not failure, it is needed to build a new business and foster those relationships that grow into revenue. But first you must reach your customer (audience). Once you have them you must keep them. This means that both scarce and abundant strategy must be co-mingled, as even Google seems to be doing.

  • Excellent and very useful.
    Using most of this arguments when I try to explain within my company how to change – so far the success is limited, but: worse the sales are better the listening becomes.

  • Good stuff, Jeff. Traditional media companies must find your ideas completely and utterly alien. Control of information is how they make their money afterall. And setting information free does not fit well with their present model. Interesting observation about the oversupply of display advertising, and the poor returns for publishers.

    Eventhough there’s oversupply, I would argue that all display has value. But the value is in the performance. And unfortunatley performance has been poor in display, which has prevented marketers from committing more budget.

    There is a faundmanetal change happening in the display market at present: technology and data are being leveraged by some great companies in the ad-tech space to improve the performance of display advertising. This is having a ripple effect: big marketers are starting to wake upto the possibility of accountable media. This will ultimately help to improve revenues for online publishers.

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  • I don’t want to sound negative, but in the NYT story you’ve linked at the end, Kwedit really isn’t doing much more than giving away some virtual currency for free and then letting you buy more.

    • just a handy, contemporaneous link for stats on current virtual spending.

  • Jeff, are you reading my mind, or am I reading yours?

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  • Didn’t Mel Karmazin say, “You’re fucking with the magic,” not “You’re fucking with the secret sauce” in Auletta’s book?

    • at the breakfast, he said secret sauce, according to my notes.

  • Eric Gauvin

    Wow! You’ve gone all out. You’re blowing my mind…

    I think Muzak is an excellent analogy for the world you’ve described.

  • Jeff Smith

    While I agree with the general premise of your post, I must point out one very important difference as it relates to one particular medium: television.

    For all other media: radio, newspapers, magazines, and certainly internet, I totally agree.

    But TV is still really important to a small number of companies that spend a boat load of money.

    And when I say television, what I really mean is passively watched highly produced :30 spots viewed on big screens over and over. In the current era of DVR’s and VOD on the web, live sports and American Idol (also often live) are some of the last remaining premium environments for this type of advertising. (The bulk of the remaining non-premium environments are a myriad of cable channels spinning endlessly waiting to accumulate enough passers-by to notice.)

    Of course, the number of people that consume TV this way has been dwindling for years. But the price of TV commercials has not behaved according to the logical economic principles of supply and demand: the audiences keep getting smaller, yet the prices keep going up. But why?

    I think the reason is clearly contained within the power of the medium itself. I stress passive viewing, because no one really WANTS to watch commercials, but if your experience is passive enough, it does tend to happen. And you cannot underestimate the VALUE of these kinds of ads in creating true BRAND EQUITY, compared to all other forms of advertising.

    It’s not even close. Good TV commercials are more carefully constructed than Hollywood blockbusters and a hit series of commercials is much more difficult than a hit series on TV itself. (I’d swear Mastercard has milked priceless for longer than the Simpson has been on the air!)

    TV commercials are mind-transforming profit bombs for companies that know what they’re doing.

    Take GEICO for example. They have been hard at work creating a generation of people who will forever associate them with their lovable gecko icon. Could GEICO have turned itself from a plain old vanilla “government employees insurance company” into the juggernaut it is today without television? Smaller local companies are getting destroyed by GEICO’s brand as it rolls across the USA, Wal-Mart style.

    Or look at the way the liquor industry has gladly returned to TV advertising. Does is shock you to learn that distilled spirits sales are up at the expense of beer these days?

    What I am saying is that TV advertising, particularly when it is done well and viewed happily and passively by a Super Bowl-like audience, is far, far more valuable to the brand advertiser than any other form of advertising.

    That’s why Google itself, took to the airwaves on Superbowl Sunday.

    The irony is, of course, that the very largest corporations, the ones who dominate this form of advertising are also the last group of advertisers that Google has yet to really crack. Google struggles to get its fair share from the Fortune 100 companies and it has frustrated them for years.

    • For now…perhaps.

      But not for much longer.

  • Jeff Smith

    So the problem becomes how do you get brand advertisers to convert their huge TV expenditures into other mediums as passive TV watching goes away (and oh how I hope that it does!)

    When you compare CPM’s or other performance metrics, it just never works. The reason is because TV advertising’s cost is not tied to the size of its audience, as I described previously. The value is really tied to the medium itself (brand managers and brand geniuses like Steve Jobs still get that)

    So how do you prevent the overall ad-spend from drastically decreasing while trying to convert to a new model? How do we ditch the ad-supported model when one form of advertising is so much more valuable than all the others?

    The TV business is certainly going to have none of it. They didn’t get to the top by being the best at anything; they were awarded monopoly businesses by the government and were allowed to freely sell this most potent form of advertising.

    • Tex Lovera

      Jeff Smith-

      I had similar thoughts re: television, especially the Super Bowl. How are they different? Why do companies (even, ironically, Google) continue SB ad buys?

      When you say “The reason is because TV advertising’s cost is not tied to the size of its audience…”, I would partially agree that your statement is true for a particular show TODAY as opposed to 10 years ago (although this last Super Bowl was the most-watched TV show in history according to Nielsen, breaking a 25?-year-old record!!). But if you’re talking about all shows at a given point in time, the cost vs. eyeballs formula still holds.

      But I believe your point about the “passive” nature of TV has merit. Although time-shifting, TiVO and their heirs are cutting into that…

      • Jeff Smith

        Keep in mind that the record-breaking audience was not on a ratings basis (i.e. the percent of viewers watching), it was for TOTAL audience.

        The actual rating for the Super Bowl was actually smaller than what the Cosby Show, back in the 80’s used to draw every week!

        Honestly, it makes the audience size of the M*A*S*H finale all the more incredible.

      • Tex Lovera


        I understand that the record was only on a “total viewers” and not ratings basis. But isn’t that what the cost an advertiser pays would be based upon? (Unless the advertiser has an additional need for exclusivity or “buzz”?)

        PS – I am not in advertising :-)

      • Jeff Smith

        Well, for the record, I AM in advertising. And TV is sold on a cost-per-point basis, i.e. they are sold on PERCENTAGE points–that’s what RATINGS are.

        The Super Bowl’s RATING (as opposed to the total audience) has shrunk just like all other TV ratings. Barely 1-in-3 Americans watched the Superbowl this year. “All in the Family” would draw half the country every week back in the 70’s.

        Was advertising in “All in the Family” (or even the MASH finale for that matter) sold for more than the most recent Superbowl, even adjusted for inflation? Not even close.

  • I thought this was a seminal post that brings together a lot of things. It’s spot on.

    My company has been doing this with free job postings where we return algorithmically matched candidates and we’re only paid if the person is hired. We sell outcomes. Every job and employer gets a unique stream of leads that match their needs. To do this we have to break down information into a meaningful and relevant structure, and where you can’t do that you won’t be able to harness abundance as much. It’s not selling scarcity, so much as creating an optimum and personalized result for each person’s scarcity, which is unique to them. Start with abundance and ‘coordinate at the edge’ to deliver unique streams of information to people.

    The idea of selling outcomes is the result of managing abundance. Curating is an outcome. Curating will get a lot better than digg or techmeme too, but I wish you had driven than theme harder in the post. Professesors becoming more in demand isn’t an outcome to me because head of the tail results dominate the cumulative fixed attention span to the exclusion of others. That’s not selling an outcome, that’s creating scarcity. is a better example because it’s more coordination at the edge. What we do at my company is an extreme example of coordination at the edge.

    I’m a fan of TWIG too. Thanks for participating with that show. This post is a wonderful contrast with your wondering about Google’s move into display ads and the statement above about the effectiveness of Adsense. Branding isn’t selling an outcome to me. I think Google’s doing it because that’s where the money still is. It’s not an outcome, but it’s a lot of money till things change. Maybe you can revisit that issue and this post in a future episode.

    Lloyd Fassett

  • stevenstevo

    Quality is no longer a scarcity? Are you kidding?

    Quality will always be a scarcity, and there will always be a demand for it. The internet has not transformed the laws of supply and demand. It has unnaturally distorted them. The internet is not changing human nature.

    Why do you people blindly adhere to the dogma that the internet just has to be a profitable platform for all businesses online (and you better get on board if you’re not already!)? I mean, I do think the internet is great and all, but so what? What is it about the internet inherently that makes you think it is destined to deliver economic profits at some point in the future? Why do you assume eventually people will figure out a way to make money on the internet? Even after all this time? Even when your blog makes no money? Remember when the automobile came out? It sure “changed society” but has it been a profitable industry? Is the airline industry profitable?

    And is there something else going on here other than mere selfishness? Why does it make you happy that the New York Times is struggling or that newspapers like the San Francisco Chronicle are gone forever? That the internet and illegal file sharing decimated the music industry and is beginning to do the same to the film industry? Did you crack a smile when Mirimax shut down a couple weeks ago?

    Do not delude yourself. The demise of quality in the music, film and media industries is not a good thing. No one is happy about it. In fact, most consider this so obvious that we feel there is no reason to discuss it. The sad thing is that some people interpret such silence to mean we are happy about it. So I’ll go ahead and spell it out for you: I most definitely do value quality. Not all music is the same–scarcity does exist. The internet did not change me–I still value quality music. The internet just let me get it for free. And while it is difficult to articulate and quantify the losses we suffer from the fall of these industries, I am fully cognizant of them. I realize that we all lose: we will never know the great movies that Mirimax would have put out had they survived.

    • Phil

      Wow.Your comments remind me of the painful cries of a woman who has lost her lover. You talk about the wonderful past, decrying the loss of quality music and movies, as if the way they were made at the time in history that they were is the only possible environment that could result in “quality”. You forget that car manufacturers and airlines did, in fact, make gobs of money for many years. If they didn’t, they wouldn’t have lasted as long as they did. Don’t forget that there was a time when horse traders made gobs of money, as did newspapers. They did because within the historical, cultural and technological context of the day, they scratched where a large part of the population itched and who were therefore willing to open their wallets. Entrepreneurs have always had an uncanny ability to figure out what people want, a way to make and deliver it, and differentiate themselves as others catch on to what they are doing and duplicate it. And they figure all of this out in the context of the limitations of the day in which they live. As the competitors come along, quality is generally the issue that determines who leads and who follows (or dies). Do you really think that it will be any different within the historical/cultural/technological context we find ourselves today? Really?

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  • Dave

    too bad your opinion is directly contradicted by human psychology

    • Dave,
      Gee, that’s helpful. Why don’t you say more? Too bad your opinion isn’t clear!

  • Jeff: I enjoyed the article. Peter Drucker has a book called the “Effective Executive”. In this he references that in the end an executive can do many different things but in the end it comes down to adding value and producing the desired result. I see many different services and “gadgets” out on the web today. Some add value, many do not. If a website or “gadget” doesn’t solve a problem then it is just “nice to have” or “neat”. Many don’t see this because their values or self interest clouds this objective vision.

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  • Greetings from Berlin, Germany, Jeff.
    No snark, just offering a chance to share views from a world perspective.

    Many media companies in Europe still produce amazing, amazing products and services around strong brands and profitable companies.

    Thanks for asking about ideas from abroad. I have been fortunate since 2005 to consult in many top media houses outside of North America and have been lucky to witness and also document these difference makers: on my blog, in video and through my social networks.

    Here’s a map to where I have been working lately.;map

    And soon, there will be a documentary film (“Breaking the News”) that will not only document this turbulent time in journalism history but also showcase the efforts of several innovators. People who have been making their new ideas profitable. In places far outside the usual tour stops of U.S. consultants.

    Places like Moscow, places like Zagreb, places like Prague, Asia and Berlin.

    I have been filming interviews with journalists CEOs, editors in chief, publishers and academics as I go around and try to get the big picture. What I know is that after five years of working on this story that the answer to the industry woes is not a one-size-fits-all answer. Perhaps the most-needed remedy for U.S. media houses at this time is to implement a real change management program.

    For so many, it is time to reinvent the company, while you still have one.

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  • Dear Jeff:

    If I have followed your reasoning properly, then I have to say I disagree with it, certainly as far as the media and advertising portions of the argument go (which are the only portions I’m semi-qualified to address). I’m a fan and advocate along with you (and of you) in regards to the consumer driven information economy, but I believe strongly in the value it has created. My reading of this post is that the new media economy has, instead, wrecked value. Rupert Murdoch would agree; perhaps also Mel Karmazin. Not I.

    Start with advertising. “Sell the outcome” is a pretty good summary statement of the points you make, for which we/you thank Max Kalehoff. From it, you admonish those in the media business to align with marketers if they are to have any hope of surviving the chaos of the new world. This is a bad idea, I believe, and poor recipe for survival. Why?

    Relationships. You say that media “must become” about relationships. I say media has always been about relationships, and I’d say further that the exciting part about new media is how especially good at relationships it is relative to old media. It is substantially more personal and timely. It is more one-to-one.

    The principal stakeholder in a media relationship, however, is the consumer, not the advertiser and the media must stay firmly aligned with consumers or perish. Google’s remarkable success with results was/is driven by value it creates for consumers, not advertisers. Google is in the results business, which is the same for all search engines – as it has been the same for the Yellow Pages and the same for classified section of newspapers (May they rest in peace). BuzzMachine is not in the results business except so far as when I show-up it better be interesting – as, indeed, it always is. Google doesn’t have to be interesting. Google has to be reliable results-wise. You, have to be reliable interesting-wise. You have the harder job. You should make more than Google on a pound-for-pound basis. But, that’s for another day.

    I am clear about the primacy of the consumer as principal relationship holder with media in the way that I think you are a bit unclear about it. You say that Rupert Murdoch and others are playing a dangerous game when they propose to charge their “best customers – cutting off their richest relationships with a toll booth.” If you are right in this case (I think you are) it follows that you are wrong that media should align with marketers.

    Unless I’m missing the point, which may be that media should be equally devoted to consumers and marketers serving as some sort of Den Mother between the two, as community builders, or Tupperware party organizers inviting advertisers to share coffee and donuts with the neighbors. I’d argue the idea lacks passion, which suits Demand Media and other content mills paying $20 an article just fine. They are not in the passion business. They are not in the relationship business. Coffee? Donuts? Warm bodies? Save a seat for them on the sectional.

    …Which is where I get stuck again when you argue, “advertising is failure – it’s what you do when you don’t have a valued relationship.” Right, but then, ipso facto, advertising is not failure in the presence of valued relationships, the “richest” source of which is the media – the richest source of which today is the Internet, where I think we have always agreed consumers find more of what they care about.

    Interestingly, this outcome still supports your overall premise to stop selling scarcity. Instead, sell abundance – of relationships. That’s what the old media world was missing: the fact that they could not produce and distribute content abundantly enough to satisfy the needs of all their consumers. The Los Angeles Times tried to serve an area the size of Ohio and failed. It could not afford so many relationships. Ditto the rest. If they are smart they will retreat to their interest-based borders and thrive on the meaningful relationships that result, way into the future. Profitable, only smaller, just as you say.

    The Internet can afford countless relationships. It remains to be seen if marketers will harvest them. If we want to help the marketers, however, stop selling relationships short.

    • Andy Freeman

      > The Internet can afford countless relationships. It remains to be seen if marketers will harvest them. If we want to help the marketers, however, stop selling relationships short.

      Umm, I don’t care who can afford countless relationships. I care about my relationships.

      I have limited bandwidth and I’m not going to use much of it on “relationships” with the folks who produce things that I consume.

      There are very few organizations with whom I am willing to have “a relationship”.

      And no, I don’t care about whether relationships are an essential part of their business model.

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  • Daniel Lord

    Great essay with a compelling point–to a limit though. Your premise mostly applies to the digital world and the analog things that can be transformed to fit into it and become permanently changed. A few examples might illustrate my point.

    Healthcare is a physical good that won’t go digital–ever. The American Medical Association and the healthcare conglomerates created and maintained a scarcity of medical care that has made the double-digit and poorly-ranked in the G8 American healthcare system the most expensive in the world–and they haven’t lost control yet.

    Wealth and finance are physical despite their translation to digital for convenience frequently–they are nearly always made physical again eventually. Goldman-Sachs and a few other others in the regime of high finance have a chokehold on this nations finances and political power and have made that power scarce to all others. Wealth had been digitized only as a proxy for agents to manipulate–in the end it is still physical and tightly controlled by a very few. Banks have made loans scarce and they control that to the consternation of those who threw bailout funds at them for rejuvenation only to see them use them to speculate and pay bonuses.

    Pollution is physical and threatens our air, our oceans, and all life on this planet–yet progress in curbing it is moving at a glacial pace–and that scarcity is by design and in the control of those who benefit from polluting. the same with the over-fishing that has decimated the ocean’s great predatory fishes–the salifishes, tuna, salmon, and others.

    In sum, great essay but with limits and it doesn’t apply to some of the most compelling challenges man faces today.

    • Whoa! Mr. Lord has not paid much attention to the front page for the last few years. The wonderful trick of the economy is that money and value are entirely intellectual property (except in the case of coins, perhaps, which can be melted down if their face value declines enough). Residents of relatively stable First World countries, such as us Americans, think of money as physical because a $1 greenback still buys something vaguely like $1 worth of goods.

      Residents of Argentina, during its worst inflation, reportedly became familiar with stores that posted their prices for goods using odometer-like devices that generally shot up several times a day because the Argentine currency was worth only what people thought it was worth, which was less and less.

      Money and stocks and real estate (to a large degree) and advertising are worth only what people think they’re worth. They fluctuate, soar and plummet based on what a hungry pack of selfish traders think they’re worth. Theoretically, these markets have some wisdom, though they’ve been monumentally deluded by greedy fantasies from time to time.

      Many things have caused the value of advertising to fall, not least the recession, but also the Web’s superiority at giving users many kinds of information (especially compared with many mediocre newspapers), and giving advertisers the attention of many kinds of users, as Jeff Jarvis correctly, pugnaciously and gleefully points out. The bad business judgment of recent buyers of over-leveraged newspapers, leading to almost-immediate failures, contributes to the conventional wisdom that print sucks.

      As some established media totter on the brink, new-media evangelists deliver the coup de grace with the skill of a Reagan wordsmith, framing them as “legacy media,” with delicious connotations of musty lace, tarnished silver and worthless ornate old stock certificates.

      And a chorus of partisans who love the Web’s freedom, who resent the abuses of media oligopolists, some of whom are building careers (or at least MP3 collections) on this new media ideology, continues to push down the value of ads in established media.

      Which was always worth only what people thought it was worth. And lately trades for less and less.

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  • Wow! Abundance. An incredible idea.

    The last time I saw abundance was when I looked out my window and saw the woods and four feet of snow here in Maryland. Then again, the last time I witnessed scarcity was when I was on Madison Avenue and was looking for a bathroom.

    Is it possible that we’ve been surrounded by non-scarcity the whole time and we just didn’t realize it. I’m not sure about the world population statistics, but the last time I looked I think there was actually slightly more than one woman for every man. That’s what you call a plentiful environment.

    The next time you’re carrying in cases of Costco bottled water from your SUV in the rain, think about the irony of that picture. This and other ideas are always abundantly free at

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  • I was able to share this with Swinburne University today (who are currently deciding their future) I hope they hear you!

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  • He argues that subsidy is shifting from advertising to “a device and access service subsidy.” He says that he who controls access commands the highest share of revenue. He emphasizes that content rights holders win only if they hold a monopoly on that content; if competitors can do likewise (read: news) it doesn’t work.

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