Monday, January 26, 2009

High Finance

Information is moving to us at a rate that is impossible to filter and make meaningful. We've moved beyond wondering what is valuable, and now merely stop at what's good enough.

You couldn't find what you wanted to, even if you had the time. Google shouldn't be helping us to search for interesting things, it should be helping us weed it all out.

Writer C
lay Shirky calls it “filter failure.” The model of one producer creating content for a million (or more) consumers has been supplanted by the rise of an age in which a million consumers are producing content - for everyone else. The problem with this is that no money changes hands. It’s all free labor, and hard if not impossible to monetize.

If you
can grab it for free, what is the financial motivation to supply it? How do you create value for an audience that has so much at its disposal that there is no apparent incentive to look for something out of the way?

You can't get them to pay for it. So much is deliverable to your desktop, the object-based/ widget-selling/ limited resource model is about over.

s the secret is traffic? That doesn't translate into money changing hands on the back-end, either. Netflix, Amazon, and YouTube all claim the vast majority of traffic for their respective market niches, yet seem to be losing money on each individual transaction. They've functioned in the red since their inceptions, yet behind the scenes, these properties become more and more valuable each time someone leverages a golden parachute or stock's traded for ownership stakes.

Amazon isn't interested in selling books at a profit, but rather in having a piece of every book that sells; used, new, or digital. Wanna buy a Kindle? $350. Yet a download of "Treasure Island" costs 10c. It's the opposite of the razor blade rubric.

The value of these companies have been in the larger philosophical IPO realm up to now, outside the normal capitalist circles most of us understand, and that have been doing so well by the stock market lately.


When the cost of providing access far exceeds the possible profits from supplying content (let alone creating it), it's no wonder everything old is new again. Why spend any time developing or convincing audiences that there's something new under the sun.

It even says in Ecclesiastes that there's nothing new under the sun. And that was a long time ago. It will take you 10 lifetimes to get through what's already out there. They tried to get your interest by going deep into the vaults and releasing all the old catalog on DVD. Now we've figured out that the Long Tail is an elegant concept that doesn't actually play out in the real world. 99% of the people really do purchase only 1% of the content.

Still. Providing content is a blockbuster-driven business, and the infinitely democratic promise of the Internet actually makes it more so now than the pre-Amazon/bricks-and-mortar days of the '80s.

There's so much shit out there, you have to look at the lists, the diggs, the del.ici.ouses (del.ici.i? del.ici.eaux?) to see what everyone else is interested in. There's no other way to filter it.

It's information overload.

Traffic in itself is a virtual presence, a mob-acknowledgement to popularity which subscribes value to something as well. Maybe the joke is true - they lose a dollar on every transaction but make it up on the volume.

No comments: