Creating Scarcity

Nilay Patel at Vox has a pretty interesting article about how digital business works. The basic point is that on the internet, content is ubiquitous. Because content is ubiquitous, it is worth nothing. It is like air and water. You would only pay for it if you can’t access it. For that reason, it is foolish to try to sell content. You will run faster and faster just to stay in the same place.

So what DO you sell? You sell what is not there. And what is not there? You create the empty space. You create the vacuum that pulls people in. You create scarcity. As Nilay points out, there are different ways to do this. And for they are not things we normally think of doing. They work like this

  • create an interactive space (for example voting) and then penalize people for not participating in the entire experience (barring them from voting). The voting opportunity becomes scarce and thus desirable
  • impose time restrictions on access. When things are only available for a short while, they are scarce. And you can make things as scarce as you like
  • create events – events only happen for a limited period and if you provide access to them, you are in control of a scarce commodity

And here is the kicker

these efforts to create new business models that don’t rely on physical scarcity are making huge amounts of money.

So, want to make money on digital content? Start thinking about how to master one or more of the above. Find new ways to create scarcity. When you think this way, you begin to see creating scarcity behind quite a lot of business models. Like Hollywood celebrity. Why pay to watch a human walk around in fancy clothes? Because that human is, perhaps, Scarlett Johansson. And what makes her special? She is beautiful. But so are lots of people. But there is only one Scarlett, right?

Hmmm … interesting.

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