Scarcity and Value in the Attention Economy.

The shift to a digital economy has had many adverse effects on various aspects of life which we have discussed in previous weeks. Shown through the ‘long tail effect’, it is clear to see how retail frameworks, processes and marketing efforts have been significantly effected by a shift to ‘e-tail’ and online shopping. As discussed in the lecture, content aggregators such as Amazon, Google and Netflix have come to dominate the market online, as well as offline. The Borders vs Amazon case clearly demonstrates the huge impact an online service provider can have on a more traditional ‘physical’ retailer, and how digital and hybrid retailers can break through the ‘tyranny of physical space’. The logistical aspects of digital retail demonstrate how this can occur; the Amazon warehouse does not require neat presentation, counter-staff or ordered shelf space, and instead can be utilised so that consumers pay the lowest possible price for their desired products. This is important as price transparency is increased online, with prices easily comparable. Through lower prices and recommendation engines (such as Google), users are driven down the long tail to find obscure products you cannot find anywhere but online.

Long-tail effect for retailers

The shift from the ‘hit-driven model’ to a ‘mass market of niches’ allows more obscure products and trends to become popular, with memes and social networks helping to spread awareness of alternative music, fashion, movies and art amongst other things. One of the most interesting concepts I have found over the course of DICG202 is the importance of scarcity, and its impact on demand and value. In regard to this week’s discussion, I believe the notion that ‘abundance of information leads to scarcity of attention’ needs to be bought to be highlighted, as this is extremely important to consider in a digital economy. Compared to traditional media, the internet providers easy access and no risk, zero entry or user costs, no quality filters, and free publishing and access for users. Although this is seen by many as huge benefits of the internet, for companies wishing to gain attention or sell their products (whether tangible or intangible) this can be a major problem. With scarcity comes attention (and value); using more literal examples, this can be seen through water and bananas. Prior to drought, water is considered necessary and precious, however to a much higher value when it is scarce than when it is abundant. Bananas are the same; few people considered them as a highly valuable product until there was a shortage. Now a quick search for bananas on Facebook leads to groups such as ‘showing off your banana at school coz you’re a rich ****’ (with 46 000 fans).

The same can be said for many other tangible products, as well as information. In regard to scarcity, I believe Kelly sums up the paradox well, stating ‘when copies are super abundant, they become worthless. When copies are super abdundant, stuff which cant be copied becomes scarce and valuable’. I would be interested to hear your opinions on whether you agree with this also?