Collaboration Economy How Digital Unleashes Fresh Value

I want to illustrate how far ‘digital’ has yet to go before it catches up to the inherent value we habitually find within a real life community setting and for that I need to use the example of a 16th century market place where a pamphlet is being sold.

I’ve chosen a pamphlet as an example because to produce it takes a lot of hard work. Someone has to write it (or collate it). It then needs to be printed and then it needs to be sold (provided, of course, its content is worth selling). Pamphlets at the time were a principal means of disseminating thoughts and ideas and they could just as easily be collections of speeches or sermons given by some of the top thinkers of the time. 

In a pamphlet, like the one in our example the pamphlet has a certain monetary value which, once it has been bought may depreciate but does not fade to zero. It can easily be resold, any number of times, with the re-sale being less than the original. It can also be lent, left around for others to read, picked up and given to a friend who may lent it to another or even re-sell it.

The point is that by being used this way the pamphlet acquires fresh value with each step it takes along the chain. As a bought item it has a specific monetary value to the seller and an educational one to the buyer. As an item being lent it has a discovery value to the person borrowing it and a social one to the person lending it. As a resale item it has a monetary value (again) to the person selling it and a discovery value (at a bargain price) to the new person who decides to buy it at this new, lower, price.

At every step of the way it also represents a specific value to the person who wrote it. That may sometimes be very direct in terms of a specific amount of money being received at each sale. At other times it may be indirect in helping the spread of his ideas and the acquisition of fresh audience which might not have otherwise been reached.

Fast forward to present day. With a click we can buy any of six million plus eBooks and have it delivered, wirelessly to any of a number of reading devices we may own. At this point we have one over on any 16th century pamphlet buyer. Not only do we have greater choice but we also have competitive prices and we can make our purchase while having a latte, on the move or from the comfort of our bed. But that’s it.

While arguably we could lend an eBook (if we really, really tried) we can neither resell it, nor share it with anyone. As a matter of fact the only way we have of really resharing it is if we lend it along with our reading device. To all intents and purposes the value of the eBook purchase, after the initial step where someone has got money for the eBook and we have got a book to read, goes down to zero.

Yes, the author gets a royalty but any kind of discovery process where he gets to be introduced to fresh, new readers has a high cost threshold because it requires marketing and costs money. There is also a high entry barrier to reviews and word-of-mouth publicity because both of these require a certain amount of energy from the person who initiates them which itself can be difficult to procure.

So in many ways, while going forward, we managed to launch ourselves into the past, way beyond the 16th century. As a matter of fact the closest analogy I can come to in terms of locked up value in books is the 10th century AD where writing is strictly controlled by the church and where manuscripts have to be ordered to be produced by monastic orders. They are extremely expensive and cannot be lent, borrowed or even given away. 

Value Needs to be Unlocked

The notion that value is something which is generated further downstream is not unique. As the 16th century example of a pamphlet showed it is has always been here as part of our interaction as individuals. But it is unique in that it is only in the digital age that we have the means to actually begin measuring its impact.

In an interview Tim O’Reilley, head of O’Reilley Media mentioned that the digital economy is very much a see-saw between value creation and value capture. Sometimes value is created without being captured, like when Tim Berners-Lee created the world wide web, he created value which was captured by companies like Google, Twitter and Facebook. At other times value is created and captured on the spot but also has impact further down the line. A classic example being Google Docs, a free application which allows real-time collaboration to take place and which generates direct value for Google in terms of brand loyalty and uptake of other services.

At the same time Google Docs allow companies to become more efficient generating a saving which, in itself, acquires value further down the line.

And so we come full circle to eBooks and digital files like video and music and our 16th century market place. A new company by the name of ReDigi is locked in a battle with EMI over whether music downloads which have been bought legally can be resold. The EU court has already ruled on the legality of this.

ReDigi’s technology would allow the sale of digital goods which are now held at the 10th century equivalent of zero value following the initial transaction.

The first, emotive response here is to lament lost sales from books and CDs and film videos which would have given money to the creators. That’s a short-sighted view.

In the digital age a second-hand eBook or film or song may be indistinguishable from the original but there will be a significant lag time between purchase and re-sale. Most of us usually only get rid of staff we no longer have any use for.

Should ReDigi get the go ahead imagine what will happen:

  • Millions of dollars of inert digital goods will suddenly flood the web, generating fresh value (and money) where none existed before.
  • Those who could not afford to buy the original at the original price will now be able to at the second-hand price.
  • New markets will be generated.
  • New audiences will be created.
  • Musicians, writers and game designers will find new buyers for what they create.
  • Brand new ways of selling, buying and upselling will be devised to take advantage of the new audience.

What’s stopping all this? Currently, the same top-down, please make the internet go away, mentality that bought us the lunacy of SOPA, PIPA and ACTA. In a global economy it is wrong for value to die an early death simply because someone arbitrates it should be so.


What You Missed:

The Politics of Value
The Value of Conversation in the Social Media Era
Why is it Easier to Go Back to the Past?
The Politics of Happiness
Four Common Sense Causes Which Fail the Logic Test
How Social Media is Helping Businesses Develop a Conscience
Siding With Pirates Understand Why SOPA, PIPA and ACTA are wrong
SOPA The Reasons Behind it and How to Fight it


External Links

Pirating is bad but reselling digital work is OK, says EU ruling
US court to rule on ReDigi's MP3 digital music resales

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