Paid Content, Scarcity Models and Accessories

There’s some interesting chatter today regarding the future business models of the blogosphere - and other forms of social media - around the water fountain today. As usual, Scott Karp provides an interesting canvas for conversation. Over at The Blog Herald, he points to some analysis done by Sahar Sarid:

Sahar’s historical analysis is certainly compelling. If other media ultimately adopted a paid content model, why not blogging? I agree that there is fairly strong case that some blogs may ultimately be able to adopt a paid model, but there is an equally strong case why most blogs will not.

The case for paid subscription blogs is the same as the case for any other paid content:

1. Must have
2. Not available elsewhere or better than what you can get for free
3. No ads (although not necessarily)

Source: The Blog Herald, “Could Blogging Adopt A Paid Content Business Model?”

Of course, Scott is referring the public notion of scarcity. The reason that works are able to accrue value stems from the belief of others that there is unique value to the content created. The second part of his rules limits the nodes of creation in the network.

The difficulty with scarcity models in the domain of social media is that, well, there is no scarcity. The more important aspect of this market value is the distance between “good enough” and “not quite good enough”. On January 27th, I wrote about the Vanishing Point Theory of News. At that time, I proposed that there is a diminishing returns on my investment in media creation and consumption based on my ever-changing interests.

In the blogosphere, there is no shortage of individuals covering a specific topic. Let’s pretend that Engadget shut down - what do you anticipate might happen? Likely, there would be some moaning (where I don’t know) but millions of people are not going to give up their interest in technology and gadgetry. The built in social network will kick in and spit out another candidate for the go-to site for technology news. Further, some or several enterprising folks will make quick work of aggregating an experience in kind. What are the odds they would charge a fee up front?

This cycle seems impossible to break considering the economics at play today. The appeal of the Freemium model seems to fit much better in our current thinking. I’m willing to pay for that extra edge, for that extra shot of espresso. If I’m paying for content, doesn’t the promise of exclusivity get brought to the table? If I’m paying for gadgets, gizmos, networks or people - suddenly, the value is measure in other ways.

Give me my damn accessories!

Technorati Tags: freemium, longtail, paid content, scott karp, vanishing point theory of news