Tag: economic_models


Value Dissonance, Digital Goods, The Long Tail & My Oven

August 5th, 2009 — 7:24am

This week­end I went look­ing online for the ser­vice man­ual for my oven, to effect some DIY style repair work, and was unpleas­antly sur­prised to find every col­lec­tion of dig­i­tal ser­vice man­u­als within ready googling dis­tance locked tightly away behind a solid e-commerce wall.

Ten, five, or even three years ago, some thought­ful mechan­i­cal engi­neer would have lov­ingly uploaded a blurry pdf con­ver­sion of a scan of a pho­to­copy of the orig­i­nal KorEng­lish instruc­tion man­ual to a pub­lic file share hosted some­where deep in the wilds of home­brew elec­tron­ics land.  And there it would be, wait­ing for peo­ple who needed it.

Not any­more, appar­ently.  Thanks to all the MBAs who read The Long Tail dur­ing the rev­enue mod­els sec­tion of their Dig­i­tal Busi­ness courses, and then went prospect­ing for an under-monetized con­tent domain with pre­dictable trans­ac­tion and renewal flow vol­umes (read, oppor­tu­nity), I now have to pay $20 to find out how to take apart my ail­ing appli­ance.  To soften the mon­e­tary blow, I have an instantly find­able, one-click-to-purchase, secure-payment-capable expe­ri­ence.  But it’s still $20, when it would have been free last time I looked.

Take note, this is a sea change in dig­i­tal cul­ture star­ing us in the face: DIY become $DIY, thanks to ‘ratio­nal­iza­tion’ of the home brew elec­tron­ics infor­ma­tion economy.

If it sounds like I’m bemoan­ing the sim­ple fact that busi­nesses like to col­o­nize new mar­kets, and I now have to pay for some­thing I used to get for free, I want to say ‘Not true.’  (Okay, par­tially true.)  Some­thing was wrong with this expe­ri­ence.  At first I thought it was price: That man­ual is fully dig­i­tal, mean­ing it comes with absurdly low pub­li­ca­tion costs for print­ing, dis­tri­b­u­tion, inven­tory and restock­ing, thanks to the-great-copying-machine-in-the-sky-called-the-Internet.  It’s also trans­par­ently find­able via a sim­ple two-word query, which I know because I went look­ing for it myself, so there’s few of the typ­i­cal costs from AIDA (gen­er­at­ing aware­ness and moti­vat­ing my deci­sion to buy).  Yet the instruc­tion and ser­vice man­ual for a piece of hand-me-down kitchen equip­ment now car­ries the hefty price tag of $19.95.  And that’s with­out a pre­view; this is dig­i­tal mer­chan­dise I’m expected to buy on blind faith.  So much for free.

Then I real­ized some­thing deeper was involved.  This expe­ri­ence is inter­est­ing because it demon­strates the inevitable ten­sion that comes from liv­ing in an era dur­ing which basic cul­tural lay­ers, with very dif­fer­ent ways of assign­ing value, come into fric­tion with one another.  At heart, this is a mod­ern expe­ri­ence of value dis­so­nance dri­ven by two ancient human pat­terns in collision.

The first pat­tern: I am ‘given’ the oven for ‘free’ by virtue of my ‘mem­ber­ship’ — earned by mar­riage — in the local oper­at­ing unit of the folk-recycling econ­omy instan­ti­ated by my extended fam­ily; specif­i­cally, my Dutch in-laws.  Apart­ments in Europe don’t come with appli­ances, so after mov­ing to Hol­land from New York, I need a new oven thanks to the legacy incom­pat­i­bil­ity in elec­tric dis­tri­b­u­tion infra­struc­tures (volt­age dif­fer­ences) between Norte Amer­ica and Europa.  This lovely unit was avail­able from the family’s pool of col­lec­tively man­aged assets, thanks to a con­struc­tion acci­dent in my wife’s cousin’s neighbor’s adjoin­ing prop­erty, which caused a flood of water into their home while they were on a 3-week  hol­i­day, result­ing in sub­stan­tial water dam­age, com­pen­sated in proper Dutch fash­ion by a hefty insur­ance set­tle­ment, which allowed this par­tic­u­lar pair of agents in the extended fam­ily net­work to go shop­ping for a new kitchen set-up, all appli­ances included, long before the pro­jected life­cy­cle expi­ra­tion of their cur­rent oven. [ill winds indeed…])

This pat­tern is as old as man­ag­ing the aggre­gate live­stock and pas­turage.  Decid­ing which of the chil­dren to edu­cate, send to the mil­i­tary / priest­hood (or some other form of bach­e­lor­hood), or sequester in a con­vent b/c of lack of required mar­riage dowries is the same thing.  For me, all is fine and good: I have the oven I need, and all I have to do in return is allow the extended fam­ily to use my house to host the annual fam­ily New Year’s din­ner.   A fair trade for all parties.

The sec­ond pat­tern: the con­stant evo­lu­tion in the def­i­n­i­tion of first-tier trad­able goods: Suc­ces­sive waves of tech­noso­cial change have made the instruc­tion man­ual for my oven a dig­i­tally trade­able good on it’s own.  At brith, the man­ual was “part of” the con­sumer prod­uct pack­age of the oven, only avail­able — and mean­ing­ful — when sold with the appli­ance.  Fast for­ward to the pre-Long Tail Inter­net, and the man­ual was free to me, as a res­i­dent of the unfenced realm of the dig­i­tal fron­tier, exchanged via the folk econ­omy of DIY prac­ti­tion­ers.  But now that the tech­ni­cal infra­struc­ture required to effec­tively enclose this resource is  itself nearly free, and every MBA knows the Long Tail (sounds like one of those ter­ri­ble fake Amer­i­can Indian names peo­ple used be given in TV sit­coms, when some form of hijinks led them to visit a ‘Native Amer­i­can Tribe,’ and the char­ac­ters had to be iden­ti­fied within the tribe’s con­cep­tual space [another exam­ple of truly awful sort of cul­tural fric­tion…]), this par­tic­u­lar piece of dig­i­tal con­tent has a price tag.  A hefty one.

So using the free appli­ance now requires con­tent from the ambi­ent infor­ma­tion cloud in the form of a paid asset that is now, on it’s own, a trad­able good.  This mis­align­ment causes fric­tion and dis­so­nance for me; I have an appli­ance from the folk-resources layer, but all the use­ful infor­ma­tion *about* the appli­ance resides in the newly mon­e­tized Long Tail dig­i­tal con­tent econ­omy.  The newly dig­i­tal man­ual that should come with my hand me down oven is very much try­ing its hard­est to be a tra­di­tional prod­uct from the uni­verse of trad­able goods: a Thing, with a Price, sold by a Busi­ness, to Customers.

What dri­ves the fric­tion, and what makes this worth pay­ing atten­tion to and writ­ing about, is that it is the oppos­ing direc­tion of the move­ments of these dif­fer­ent kinds of goods, dig­i­tal and mate­r­ial, that cre­ates dis­so­nance by bring­ing me a free phys­i­cal oven and an expen­sive dig­i­tal ser­vice manual.

The oven used to be part of the first-tier trad­able goods layer.  It was a pack­aged con­sumer appli­ance prod­uct, cre­ated by a man­u­fac­turer, sold via opti­mized dis­tri­b­u­tion net­works that moved it through the chain from man­u­fac­turer to whole­saler to retailer at a fixed price, com­mu­ni­cated via mar­ket­ing chan­nels embed­ded within dis­cov­ery and com­mu­ni­ca­tions media.  Since then, it’s ‘fallen out of’ the trad­able goods econ­omy, and is treated as a fam­ily asset, to be handed around as best suits the col­lec­tive needs, with­out any offi­cial trans­ac­tions tak­ing place.  We could put it back into the trad­able goods econ­omy as used, if we choose to sell it, or even enter it into the recy­cling econ­omy, where it would be bro­ken down into con­stituent ele­ments — e.g. motors, wiring, dis­play, or at a lower level of inte­gra­tion phys­i­cal mate­ri­als like glass and steel — to what­ever extent pos­si­ble.  But almost all of the changes in value for mate­r­ial goods when they shift from one cul­tural / eco­nomic layer to another are one-way, and down­wards.  The pos­si­ble paths for re-uptake of mate­r­ial goods that have fallen into the folk econ­omy layer used to be trans­for­ma­tion into antiques, art, or col­lectibles — all one form or another of the museum economy.

That’s not the case with dig­i­tal goods in gen­eral, like the newly Long Tailed ser­vice man­ual for my oven.  The man­ual was orig­i­nally part of the con­sumer / prod­uct econ­omy for trad­able goods when bun­dled with the oven.   Since then, it has under­gone sev­eral trans­for­ma­tions.  First, it was un-bundled and dig­i­tized for the DIY layer (mak­ing it part of the folk econ­omy),  Now it is once again part of the prod­uct econ­omy, though now in it’s un-bundled  and dig­i­tized form.  In terms of which econ­omy it’s part of, *the man­ual is mov­ing all around the page on it’s own*.  That’s highly unnatural!

This is a key prop­erty of dig­i­tal goods that the mate­r­ial world is just begin­ning to under­stand.  Dig­i­tal goods are designed for just this sort of mobil­ity: We can move dig­i­tal goods all around the map in terms of the cul­tural / eco­nomic lay­ers they inhabit, and their con­se­quent value, with a few changes in address­ing and for­mat.  No trans­for­ma­tion of a dig­i­tal good is nec­es­sar­ily one-way.  And when these trans­for­ma­tions aren’t syn­chro­nized with the ele­ments that inhabit the phys­i­cal world, we feel the con­flict and ten­sion that results.

In my case, the oven is mov­ing one way, while the infor­ma­tion about it is mov­ing the other way.  This fail­ure to dance together eco­nom­i­cally and cul­tur­ally is a con­se­quence of the way that the oven was designed, made, mar­keted, dis­trib­uted, etc.  It’s a tem­po­rally iso­lated form of dis­so­nance that emerges from fric­tion with the new dig­i­tal layer that’s per­me­at­ing the world so rapidly.  If you’re famil­iar with spimes, and related con­cepts like ser­vice avatars and infor­ma­tion shad­ows, you know this is a (osten­si­bly) tem­po­rary state of affairs.  Once our cul­tural frames of ref­er­ence catch up with our tech­ni­cal capa­bil­i­ties, and every­thing is part of the great data­base in the sky, these expe­ri­ences of fric­tion should be much less common.

But in the mean­time, I have to fix my oven on my own.  Or cough up the $20 for the manual…

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Cultural Clouds: A New Kind of Commons?

September 21st, 2008 — 8:29am

There’s a lot of buzz about cloud com­put­ing in the tech­nol­ogy world these days, but I think some­thing much more inter­est­ing is the emer­gence of cul­tural clouds as the newest kind of pub­lic com­mons. By cul­tural clouds, I’m talk­ing about the new layer of the human cul­tural stack we’re busy lay­ing down as a by prod­uct of all our social and cre­ative activ­i­ties in the inof­verse.
To be clear, I’m not refer­ring to the IT infra­struc­ture layer wherein cloud com­put­ing is defined as the “style of com­put­ing where mas­sively scal­able IT-related capa­bil­i­ties are pro­vided ‘as a ser­vice’ across the Inter­net to mul­ti­ple exter­nal cus­tomers.” [Thanks Gart­ner, via Busi­ness­Week]
These new cul­tural clouds appear in the ever grow­ing col­lec­tions of crowd­sourced col­lec­tively or socially accu­mu­lated judge­ments, cul­tural prod­ucts, knowl­edge, his­tory, rela­tion­ships, etc., encoded in the form of man­aged dig­i­tal infor­ma­tion. This quick illus­tra­tion shows some of the pools of activ­ity and judge­ment that that make up these cloud com­mons; includ­ing wikis, pub­lic media, rep­u­ta­tion state­ments, read­ing rec­om­men­da­tions, social net­works, wish lists, music lis­ten­ing his­to­ries, shared pho­tos, films and videos, cita­tion net­works, geo­t­ag­ging and mem­ory maps, com­ments and pub­lic dis­course, hash­tags and tags for pho­tos, URLs, and songs, link streams, sub­scrip­tion and feed lists, blogrolls, etc. These are social, cul­tural, and con­ver­sa­tional resources, not min­eral deposits or phys­i­cal topogra­phies.
New Cul­tural Clouds / Com­mons
cloud_commons.jpg
The com­mons is an old con­struct that embraces nat­ural resources — think land, air, water, the elec­tro­mag­netic spec­trum — and the more recent pub­lic domain of cul­tural mate­ri­als not gov­erned by copy­right law.
Ven­er­a­ble insti­tu­tions of cus­tom and law, such as sea­sonal access to pas­turage, the right of pas­sage across bor­ders for nomadic peo­ples, and com­mon law, define and reg­u­late the rec­og­nized forms of com­mons.
But socially col­lected, dig­i­tal, rei­fied human cul­tural prod­ucts and judge­ments are a new *type* of com­mons. I think they’re a new type of resource, brought forth largely by the cog­ni­tive sur­plus we enjoy. And as pro­found tech­no­log­i­cal per­me­ation and ubiq­ui­tous com­put­ing bring on the age of every­ware, the cloud com­mons will grow (and frag­ment / spe­cial­ize / mul­ti­ply?).
Who and what will gov­ern the new cloud com­mons? How will we define and man­age these resources?
By form and makeup, the cloud com­mons is ephemeral and dis­trib­uted. But as dig­i­tal infor­ma­tion, it is emi­nently tan­gi­ble and action­able. Our basic social struc­tures and mech­a­nisms — sci­ence, the law, eco­nom­ics, art, agri­cul­ture, reli­gion, tech­nol­ogy — will rec­og­nize the emer­gence of cloud com­mons, and respond accord­ingly. APML (Atten­tion Pro­fil­ing Markup Lan­guage), from the APML Work­ing Group, is an exam­ple. The Dat­a­Porta­bil­ity project — “a group cre­ated to pro­mote the idea that indi­vid­u­als have con­trol over their data by deter­min­ing how they can use it and who can use it. This includes access to data that is under the con­trol of another entity.” — is another. [Advo­cat­ing for the right to free move­ment of data is a dig­i­tal ana­log of the ancient idea of right of way.] OpenID, OpenSo­cial, OAuth, OPML, and the rapidly evolv­ing Cre­ative Com­mons licens­ing sys­tem are other exam­ples of responses to the appear­ance of cloud com­mons.
What does the future hold? As recog­ni­tion of cloud-based com­mons grows, expect to see all the pat­terns of activ­ity typ­i­cal of new fron­tiers and zones of insta­bil­ity: wild­cat­ting, pio­neer­ing, piracy, squat­ting, pri­va­teer­ing, enclo­sure, slums and shanty towns (infor­mal set­tle­ments in the par­lance of archite­cuter and urban plan­ning) extrac­tive indus­tries, sov­er­eign claims, col­o­niza­tion, spec­u­la­tion, etc.
With his­tory as a guide, I’m espe­cially wary of enclo­sure move­ments, and extrac­tive indus­tries. Both prac­tices can rapidly dimin­ish the present value of a com­mons or commons-based resource. Worse, enclo­sure and extrac­tive prac­tices act as neg­a­tive feed­back mech­a­nisms, decreas­ing cur­rent esti­ma­tions of a com­mons or commons-based resource’s future value, mak­ing the tragedy of the com­mons a likely out­come sce­nario.
The U.S. radio spec­trum, as enclosed by the FCC
allochrt.png
Is this fram­ing of recently formed clouds of infor­ma­tion and activ­ity data as a new kind of com­mons accu­rate? Use­ful?
More on the idea of cul­tural clouds as the new com­mons forthcoming.

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