Home > Capitalism, Competition, Society, Technology > The Importance of the Artificial Market

The Importance of the Artificial Market

November 22, 2010 Leave a comment Go to comments

In a system where universal access is readily available it is essential to create a system of limited supply. Initial forays into the internet involved content creators lopping their work onto websites for free, unlimited access. No longer were the articles, videos and ideas limited to the paradigm of pre-internet limitations. With the web came the ability to be hyper-aware and content creators; perhaps from fear of being left behind, rapidly cast their work online.

And then what…

When everything is free only a moron pays. Why would anyone buy a newspaper if it can be read for free online. There are too many reasons not to buy the paper. Likewise why visit a movie theater? Why buy a book? Why would anyone buy an album when on a whim an artist’s entire catalog can be downloaded. There is a false perception that “the free” way is the right way. This is silly- creating a system of free leaves only charity as the force of attracting capital.

The correction to this system and model for future enterprises should be a controlled resource where only selective pieces of content are available for free. Best demonstrated by Fora.tv, material in high demand can only be accessed beyond a pay wall. Because it matters and Fora.tv has a resource they assert their importance and collect from those who benefit from the material. Doing so is not “big, evil capitalist”; instead its just smart business that allows for future work to be funded. It’s a simple game really: if A wants something from B, then A has to pay B. Anything else is either robbery or charity.

A better model uses the Disney mode of “market creation.” Disney only releases films from its collections at certain times. Updates, changes and additions appear at random intervals designed to spark audience interest and create a market. With new technological advancements Disney doesn’t update all of its content for public consumption. Such a system of automatic update and release eliminates public interest. Disney creates a limited supply and creates a system of demand that it can satiate on its own terms.

In order to create a viable market content creators need to assert this Disney-like artificial market. Creators need to recognize the inherent value of their work. Create an artificial market, allow demand to grow and satiate this need based on ability and strategic considerations. If Mickey gets it, so should you.

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