unmediated: The Economics of Abundance

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October 25, 2006

My speech last weekend at Pop!Tech on the Economics of Abundance is getting some attention, which is really gratifying. It's something I mention in the book, but am now fleshing it out in a series of presentations and, I hope, some forthcoming blog posts. I'd like to link to a video of the speech, but Pop!Tech only streamed it live and it's no longer available. I'd embed a copy of the Powerpoint deck here, but the two services I know of that offer powerpoint sharing and embedding (SlideShare and Zoho) can't handle the graphics and fonts in my presentation and don't support animations. So instead we'll have to do it the old fashioned way: with a download (view in slide show mode for animations).

Venture capitalist David Hornik does a great job in summarizing (read the whole thing for his analysis, too)

The basic idea is that incredible advances in technology have driven the cost of things like transistors, storage, bandwidth, to zero. And when the elements that make up a business are sufficiently abundant as to approach free, companies appropriately should view their businesses differently than when resources were scarce (the Economy of Scarcity). They should use those resources with abandon, without concern for waste. That is the overriding attitude of the Economy of Abundance -- don't do one thing, do it all; don't sell one piece of content, sell it all; don't store one piece of data, store it all. The Economy of Abundance is about doing everything and throwing away the stuff that doesn't work. In the Economy of Abundance you can have it all

Ross Mayfield puts my speech in the long context of others who have preached the perils of scarcity thinking. "Markets are not [just] transactions and scarcity of attention is false. Our leanings compound abundance and there may be no limit to what we can produce," he writes.

Ethan Zuckerman does a remarkably thorough and accurate report on the speech here. And the photo above comes from the Core77 cover here, which picks up on my accidental bon mot: "Google is the world's best tail-finder."

But the real surprise was to see my radical attack on scarcity thinking echoed a few days later by none other than IAC's Barry Diller. CinemaTech reports on an onstage conversation between Diller and Michael Eisner at Forbes' MEET conference in Beverly Hills:

Diller says that being a media company, in the old sense of the word, meant being a distributor. And distributors controlled scarce resources, like a national chain of theaters or TV stations. “They were the ones who originally owned the radio licenses, which then begat the television licenses, which then had those groups take over or be taken over by old-line movie companies,” Diller said. “They were all scarcity distribution systems.”

But now, the Internet enables self-publishing, Diller continued, “which means that the distribution leverage – the chokepoints – is going to evaporate.” The result of this, Diller said, is that “it doesn’t matter who buys what – new audience is going to be created somewhere, by somebody, that you can’t buy.”

And consolidation causes problems. As media companies get more diversified, “they get less well-managed,” Diller said. It’s hard for them to even continue doing what they used to do well, “much less master this new form of plenty, rather than scarcity.” Traditional media companies, Diller said, “were based on being dictatorial, and telling people how they’ll do business with them, and exercising every point of leverage at all points in the process.”

“In a world of not only plenty,” he continued, “but the eventual time-shifting – everything will be time-shifted – you’ll be the editor and the master of your own stuff. The single channel, general entertainment approach [isn’t valuable].”

Barry Diller, apostle of abundance? If you need any more proof that YouTube has shaken Hollywood to its core, that's it.

Originally posted by noemail@noemail.org (Chris Anderson) from The Long Tail, remediated by yatta on Oct 25, 2006 at 11:32 AM

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October 25, 2006

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