New Economic Models
February 14
The rise of the networked economy is changing economic possibilities around the world. From the call centers in India to eBay and the new Internet entrepreneurs, there are many signs that suggest a flatter world fueled by innovative production and marketing strategies. In this session, we will explore the promise and reality of the changing economic tides associated with rising Internet use including those marketing to the long tail and the new oligopolists.
Readings
- Wikipedia, Dot-com Bubble
- Chris Anderson, The Long Tail
- Kevin Kelly, Better than Free
- Eric von Hippel:
- The Economics of Open Content Symposium: New Models of Creative Production in the Digital Age Collaboration and the Marketplace - Video stream of the 30-minute presentation: new improved link! (requires RealPlayer). See below for alternate links to the presentation in video and audio format.
- Democratizing Innovation, Chapter 8: Adapting Policy to User Innovation
Additional Resources
- "Wikipedia Long Tail"
- Free by Chris Anderson[1]
- Larry Lessig's Code 2.0
Class Discussion
I really loved the Wired article and its point that this next era will be more about “misses” than “hits.” The internet and new technology remove almost all the related costs that created this all-or-nothing dichotomy; once I read it, it seems so obvious to realize that “misses” still can generate reasonable profits, just not ones that could overcome the expenses inherent in our older distribution systems (movie theater, an actual record store in a small town, etc.). The concept of the Long Tail and the 3 Major Business Rules he gives at the end are all great.
I’m a reasonably expense-conscious person in the just post-college age range with a low income, but I am also quite active in pursuing media I enjoy (movies, tv shows, music, books). With so much available free online (illegally) I tend to only pay (whether by actually paying or by getting it through a medium that provides ad revenue directly to the creator) for around 1/3 of all the media I enjoy. Those are the songs by artists I like best and truly want to support, or the movies that I am so impressed with that I want to contribute to their box office take and that simplemindedly measured “success.” Following the second Long Tail Rule, I would be very happy to pay SOMETHING for almost everything I enjoy. Lowering the prices dramatically or providing a “pay what you feel” option would actually increase what I’m happy to pay pretty significantly. And I know this is totally anecdotal, but I feel like most of my peers have the same sentiment.
Does that sound about right to everyone else in the class? Would you pay at least something for everything if that was an option?
Democratizing Innovation echoes a lot of discussions/other readings we have had about the importance of having both the manufacturers and users able and willing to innovate. The phrase “Policy makers should be aware of ‘collateral damage’ that may be inflicted on user innovation by legislation aimed at other targets“ really summed it up well for me. As cliché as it is now, “thinking outside the box” is sometimes only possible when people have the ability to ignore the boundaries that create that box. This is something very difficult for major organizations or corporations to do, but easy for individuals. Unfortunately, with acts like SOPA even being proposed, we seem to be moving in to opposite direction of the more user-innovation focused world the chapter argues for.
And just briefly on the dot com crash, wild! I’ve studied the housing bubble/foreclosure crisis quite a bit in the past few years, but was too young to really grasp what was happening with these comparably massive dot com crashes at the time. This look back was pretty jarring. AlexLE 17:46, 11 February 2012 (UTC)