Complexity Management And Temporal Pricing

Saw a great talk (by Mark Pesce at XmediaLab ) on the future of digital media distribution. He talked about what we like to call “network optomisation” when pitching this kind of distribution medium to clients, AKA “peer to peer” (p2p) networking with Pareto efficiency eg”Bittorrent” – nothing new there.  (Note: peer to peer – corporates really hate that term.. never use it.. they switch off … remember piracy is evil 🙂

 

What was new was the linkage he made with social networking as a filter/EPG for the resulting “infinite choice” that results from file download/streaming being the dominant media distribution form when combined with an arms race between DRM and crackers. 

 

I find industry events like this pretty much like “Slashdot the Cabaret Show” where a bunch of people essentially catch up on an the expurgated version of what happened during the year and discuss emerging trends. It was good to be surprised by an original idea, and not just one.. If I can, I will be going to the next Xmedia lab – it was well worth it.

 

I made a low quality CAM of Mark’s talk (Seemed appropriate given the subject matter 🙂 )  –  90% audible and you have to really listen hard – par for the course for most cams. My GF (made the comment that it might be a bit scary if your social network turns into a kind of cool Amway.) and I listened to it again when I got home.. I wonder if Mark will mind if I torrent it? 🙂 

 

Mark has previously discussed this topic – slashdot link

 

Its inspired me to add some related (and unrelated) thoughts and comments to this idea.

 

I feel that everything on social networks (Orkut, Friendster, etc) was pretty much there if you combine Usenet with an address book, the differences now are that…

 

  1.  People now seem more trusting of the internet and don’t seem to have an issue with giving away personal information to a perceived closed community. Orkut is Usenet for extroverts. Perhaps people started with file-sharing, which at first to some people seems a little creepy, and that led them into being more trusting of SNs. Either way. Many of the early people on Orkut seemed to have blogs. Extroversion again. Many blog sites have an ability to link to friends. IM systems have the same. Another stepping stone. I think the bloggers had a hand in enabling SN’s to reach critical mass.
  2.  Computing power and storage is now available to run a global, multi – dimensional address book and make it seem almost invisible. Which is pretty much what Orkut does. The technology on Orkut is similar to social mapping software used by police to track down criminal gangs via social links

 Another example of something that has emerged because of the decreased cost of computing power and storage is Video Time-shifting (Tivo, MSE, WorldBox etc..) which is now really gathering momentum in the mainstream because of the increase in computing power and storage with decreasing costs per unit. This is the biggest marketing mistake of the century.. Its being marketed as PVR or HDR or even “DVD recorders”… Thats just sounds like a nerdy VCR – the bit thats really new and exiting and life changing is Timeshifting… thats what it should be marketed as…

 

What Mark said about the social network as filter really falls under the shadow of “Personal Complexity Management”. Taken to an extreme, once we as consumers have enough software smarts behind our purchasing decisions, an opposing arms race will be set up in the area of distribution.

 

Imagine if bread was sold the same way that petrol is now. The price of petrol goes up and down according to the time of day. During rush-hours, holidays and special events it is higher. If we have a sufficient level of software smarts filtering our purchasing decisions it may be percieved as reasonable for distributors to respond by switching over to a kind of temporal pricing model, even for the necessities of life. The poor may find it easier to live in another time zone adjacent to the middle class and rich. eg. Get up 2 hours later to get 50c off a loaf of bread. The argument would be compelling. It would be possible to drop the average price, gouge during the temporal hot spots and be cheap during the cold spots. It could even be real-time and adaptive like the stock market is today. Collusion between shops would be a matter of ensuring that one shop does not have the majority of bargains.

 

I’m not saying that it will get to the point where people will have to shop at certain times to afford a loaf of bread, it will be very subtle and will all seem very reasonable. But if you don’t have networked software to help you find the bargains, you will be paying slightly more.  Average prices will go down, profits will go up. The consumer will be exposed to the every day price fluctuations that the supermarket chain(s?) mostly shield us from, but only because they are slow moving. The shields will go down.

 

The price may change by the time you get to the checkout.. so keep that PDA online 🙂

 

[UPDATE]

 

The required change in distribution model ie, making all your money in the first month before your DRM is broken has been how the games industry has been operating for the last 20 years. 0-Day warez crackz etc. We will see a merging of the two models, or in the future all digital entertainment will be games.

 

[FURTHER UPDATES]

 

Check out this scenario from John Battelle’s Searchblog.

 

And an article on PVR. Looks like the message is starting to sing in.

 


 

 

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About metawrap

CTO Massive Interactive. Ex Computer Whiz Kid - Now Grumpy Old Guru.
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