The Blog of Babel

This site sits on the crossroads of Languages, Linguistics, Social Media Market Engagement, Marketing Strategy, Innovation Strategy, Creativity Theory, Ancient Mythology & Egyptology. Its a very small crossroads in the middle of cyberspace - so stay for a while - pull up a chair and coffee. 

Virology Series - Economics of Digital Content

Welcome to the second installment of my virology series - studying how digital content goes viral. In this post we are going to look at the economics of online media. 

Supply & Demand 2.0

Economics is simply the study of human behavior given a limited amount of inputs.  We know that on the internet there is almost an unlimited amount of possibilities. With unlimited supply we also know that price enters a free fall and hovers right around $0.00. Therefore we find that most content on the internet is free and demand for individual content is low. 

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However these two concepts can be brought together into the study of digital economics - the supply and demand of digital content. It is possible to harness the behavioral concepts of economics to create artificial scenarios of supply and demand. 

By creating artificial scarcity, demand will rise - leading to more viral characteristics.  

Examples of Scarcity

Sites like Groupon and woot.com are great examples of this phenomena. These sites offer daily deals in a limited quantity. The scarcity exists in amount and time, as the deal ends at a certain time and can sell out. This creates limited supply and more demand, as users have more of an impetus to check their websites and check deals. Simple rules of economics apply. 

Possible Social Media Implications 

How would you react if the internet phenomenon Gangnam Style was limited to 5 million views? This means that after the video reaches this number it would no longer be available on youtube.  How would this effect viewing behavior?

What if we could develop "decaying links"? These links could be put on Twitter or Facebook by social entities in social media promotion campaigns and would shut down after a certain amount of clicks. Now just imagine how that might effect viewership behavior. What if Apple released daily a brief 5 second clip of their upcoming products on a 2 click decaying link? Although the media itself will not be able to go viral, the message and awareness will go viral. 

The law of supply and demand also explains Snapchat - a mobile app that allows you to send very short video clips to friends. However there is a twist, individually sent videos can only be seen once and they then disappear - they cannot be replayed. The app's recent popularity can be explained by their extremely small supply. Videos are viewed once and deleted. By doing this demand rises and so does perceived value. 

How else can supply and demand be used to create viral content? Stay tuned.

 

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