Power Laws, Long Tails, and Scarcity
Monday morning conceptual intersections…. Reading a P2P foundation blog on mimetic desire, I began thinking about scarcity. In Rene Girard’s view of society, a fundamental rivalry simmers quietly beneath the social order (taboos, rituals, institutions designed to prevent an eruption of violence). According to Girard, our needs are not met simply by directly satisfying the object of our desire. Our desire is mapped to the desires of others: it’s mimetic. As a result, satisfaction is a scarcity, and scarcity is not a material, but a psychological fact. If I want X because my friend wants X, only one of us can have X. In the traditional utilitarian view of the world, X is scarce. In Girard’s view, it’s not that X is scarce, but that desire doubles up. It’s that we all want what others want that makes the objects of our desire scarce, and our desires competitive.
Kim Becher, on Rene’s mimetic desire: “According to Girard, desire is generally ruled by a triangular mechanism, i.e. it’s not directly linked to an object, but mediated by another subject. That is why desires have a tendency to be insatiable, as they are not satisfied by simply obtaining a desired object.”
I then ran into an email recap of Chris Anderson’s talk at the Long Now foundation (see below) sent out by Steward Brand. And something hit me. The economic logic of digital media, of consumables in the digital and networked age is not scarcity (nor supply and demand). In fact, if anything defines the paradigm shift at work, it’s proliferation, not scarcity.
What drives the power law is mimetic desire. What creates value in the long tail is abundance. The two are part of the same curve, but whereas the peak of the power law might be an expression of a sudden upswing in word of mouth marketing, there is value in the long tail because the network, communication tools, and digital consumables all converge to lower the barrier to consumption. Distribution has become so inexpensive in the download age that we can all have those songs, movies, and software applications we’ve always wanted. Regardless of whether we want them because somebody else wanted them, or because Netflix told us that somebody else rented them, or because we have our own individual tastes and passions, too.
And something else hit me, too. In an age of abundance, proliferation, and downloading, what’s scarce are connections, relations, and relationships. Yes, attention is scarce. But attention is only the first layer. Behind it are the relationships that call on one’s attention. Why do I want this thing here, not that one there? When there is so much from which to choose, selection becomes the problem. We’re not trying to find what we want (material scarcity), we’re trying to find out what we want. I want this because it was recommended (by Netflix or by a friend). I want that because I’ve heard it’s the best one… Data alone, raw information, are only points in space. It takes a line to connect the dots, a curve to produce the power law and its tail. Every curve also has its expression (differential math). Though the points may be taken from data observed, the curve of the law is a social equation. All people are connected, but some are more connected than others.
From Stewart Brand’s email writeup:
“The power law is the shape of our age,” Anderson asserted, showing the classic ski-jump curve of popularity— a few things sell in vast quantity, while a great many things sell in small quantity. It’s the natural product of variety, inequality, and network effect sifting, which amplifies the inequality.
“Everything is measurable now,” said Anderson, comparing charts of sales over time of a hit music album with a niche album. The hit declined steeply, the niche album kept its legs. The “long tail” of innumerable tiny-sellers is populated by old hits as well as new and old niche items. That’s the time dimension. For the first time in history, archives have a business model. Old stuff is more profitable because the acquisition cost is lower and customer satisfaction is higher. Infinite-inventory Netflix occupies the sweet spot for movie distribution, while Blockbuster is saddled with the tyranny of the new.
Anderson explained that we are leaving an age where distribution was ruled by channel scarcity— 3 TV networks, only so many movie theater screens, limited shelf space for books. “Those scarcity effects make a bottleneck that distorts the market and distorts our culture. Infinite shelf space changes everything.” Books are freed up by print-on-demand (already a large and profitable service at Amazon), movies freed by cheap DVDs, old broadcast TV by classics collections, new videos by Google Videos and You Tube online. Even the newest game machines are now designed to be able to emulate their earlier incarnations, so you can play the original “Super Mario Bros.” if so inclined— and many are.
“I’m an editor of a Conde-Nast magazine [Wired] AND I’m a blogger,” said Anderson. In other words, he works both in the fading world of “pre-filters” and the emerging world of “post-filters.” Pre-filtering is ruled by editors, A&R guys (“artist and repetoire,” the talent-finders in the music biz), studio execs, and capital-B Buyers. Post-filtering is driven by readers, recommenders, word of mouth, and buyers.
Will Hearst joined Anderson on the stage and noted that social networking software has automated word of mouth, and that’s what has “unchoked the long tail of sheer obscure quantity in the vast backlog of old movies, for example.” Anderson agreed, “The marketing power of customer recommendations is the main driver for Netflix, and it is zero-cost marketing.”