Category Archives: post scarcity economics

Learning from labels

Learning_from_las_vegas Why can’t brands be more like bands…or at least labels?

This is the last day of Music Week here and at Knowledge Problem.  My "guest artist" has been John Galvin, a friend from Boston.  John and I have been emailing back and forth, and a couple of days ago, in a longer message, he talked about about one way he keeps track of music.

[M]ore than, I think, at any time in the past, LABELS are fine ways of keeping up on music these days.  […]  Pick the label that covers music you like, get all the bands from the label, and you’re doing OK in terms of covering a certain slice of music.  Labels [serve] as music consultants, [we] pay to "cover the waterfront" ….

Interesting!  With a plenitude of musical choices, we are forced one level up the production hierarchy.  We go looking not for individual acts/artists/bands/projects but for the "long tail" labels that represent them.  (John mentions several including Kill Rock Stars, Blood Shot Records, Matador Records and Secretly Canadian.  Lynne Kiesling at KP mentions Polyvinyl, Kitchenware Records, and Merge Records.) The number of these studios is roughly equal, I expect, to the number of acts/artists that existed 15 years ago.  So we stay about even in our search costs.  (Of course, we sacrifice acuity for coverage, but in a culture as innovative and profuse as our own, it’s a good, or at least a necessary, bargain.)

These labels are acting as aggregators and editors.  They act a little like favorite radio stations.  We choose them to do the choosing for us, and a stream of new music pours through our lives as a consequence.  People like me will still people like John but people like John will be well served by Kill Rock Stars.  (My place in the hierarchy of knowledge is probably one of the magazines that John suggested this week, Magnet, perhaps.  Or maybe I’m kidding myself.  Perhaps Blender or Rolling Stone is more my speed.  There are levels higher than this.  I think the system scales right up to American Idol, and God help you if this is your cultural conduit.  Talk about a Knowledge Problem.) 

I found myself thinking whether brands could be more like Blood Shot Records.  The trouble with brands is that they are still much too static and too broad.  Most of them are still caught in a  mass marketing game.  They are trying to be "one thing to many markets" and this becomes increasingly implausible as the markets splinter ever more finely.  Some  brands do stream with design novelty.  But this is devoted mostly to positioning tags and tactics: "good source of whole grain," "helps lower cholesterol," "dipped in peanut butter coating and bursting with peanuts."

One way for the brand to speak to long tail markets is to open themselves up to the product and the stylistic innovation of lots of  little teams.  These might be in-house "skunk work" teams of innovators.  Or, in an ambitious act of cocreation, they might be teams of consumers working feverishly in suburbs around the country.  The brand would work a little like Blood Shot Records which, I assume, does not direct the creative efforts or outcomes of the bands they represent.  They merely corral them, give them the blessing and the distribution, of the Blood Shot brand, and send them out into the world.

The label strategy would have the advantage of allowing the brand to survey a vast amount of innovation and, on a just-in-time basis, choose the formula and look that works best for the market and the moment.  The brand remains stationary but a river runs through it. 

There was an influential book some years ago called "Learning from Las Vegas" in which Robert Venturi argued that architects could learn something from the great sprawling iconographies of a gambling town in the middle of the desert.  I’m wondering whether marketers couldn’t learn something from another of the far margins of capitalism.  Marginal markets have something to teach mainstreams one, because, well, they have seen the future, and it’s time we learned to see with their blood shot eyes. 


Galvin, John.  Personal Communication.  April 5, 2006. 

Kiesling, Lynne.  Has the death of the music label started?  Knowledge Problem.  April 3, 2006. here.

Venturi, Robert, Steven Izenour and Denise Scott Brown.  1972/1977.  Learning from Las Vegas.  Revised edition.  Cambridge: MIT Press.  available here.

Surfing Your Own Wave: plenty, Netflix, and the creation of managed scarcity

Eric_surfingThis man’s name is Eric Hayes.  He is co-founder and Vice President of research and development at Attensa.

I met him at the Corante/Berkman social software event.  He was standing there at the cocktail hour with a video iPod.  It showed a clip of him surfing behind a motor boat…for a really long time.  Clearly, Eric had found the endless wave.

For those who would like to try this at home, Eric gave me the specs.

2003 MasterCraft X2 (with 2,000 lbs of water ballast on the one side) 20.8’ long 310hp GM Vortec V8, decked out with 17 speakers (10 on the tower) 1700 watts of power (so you can hear it while surfing or wake boarding), and an ipod mini playing the blues.  The surfboard was a 5.5’ Hyperlite “LandLoc” wake surfer. The river was the Upper Willamette  in Portland, Oregon. 

Now you know. 

The other thing that was wrong with this picture was Eric himself.  Really friendly.  Really happy.  Not at all like every other surfer I have met. 

I have long believed that surfers are not by nature surly, ill mannered as*holes.  No, I think it’s surfing that makes them so.  Surfing is the original scarcity enterprise.  There are relatively few places where surfing is possible.  Even here, really good waves are scarce.  And even these waves, the really good ones, last a relatively short time.  This is why surfers are so mean spirited.  (Ironically, bad temper spread from them to skaters from whom scarcity is not nearly the same problem.  Evidentally, this was a matter of style, not praxis.)

Eric is a happy human being for many reasons, I’m sure.  But one of the reasons is this:  as long as he’s got his 2003 MasterCraft X2 and a body of water, he can surf till he can’t stand up.  In fact, he told me this was one of the problems with surfing behind a motor boat.  If you remain upright, the wave will always last longer than your abilities to ride it.   (This puts me in mind of that old English dance hall joke: "Can you play the Maple Leaf Forever?"  "No, sir, eventually my arms get tired.")

Now, it is not revelational to say that the new media and the new technologies, variously enabled by the new economies, have blunted the force of scarcity as an aribiter of value.  Now the problem for some consumers, the lucky ones anyhow, is how to choose when scarcity no longer does most of the work of choice for them.   

I did a project for the Canadian Recording Industry Association (CRIA) on file sharing (KaZaa, etc.).  Some of my respondents now had many thousands upon thousands of tracks on their hard drive.  And it was harder and harder for them to savor any one of these songs.  That time honored institution of choosing favorites" (key, in the old world, to group affiliation and self definition) was now under challenge.  Limitless music was a problem.  (Scarcity was apparently playing a role even in identity formation.)

And this brings me to the genius of NetFlix.  I have been trying to figure out what’s so charming about the model.  (I have only been signed up for a couple of months.  Thanks to Tom Guarriello   for getting me started.)  Partly, it is the sheer pleasure of getting a "surprise in the mail."  Partly, it is the sheer convenience of filling the " Q" at my leisure and having them fill orders at theirs.  Partly, it’s the blessing of assisted choice and those, sometimes cunning, recommendations.  (Was there anything so depressing as going to a video store to stare at the containers of really bad movies in order to find the one you wanted.) 

But mostly the power of Netflix comes from it’s creation of "access constrained by interval" and the recreation of a kind of scarcity (a "managed scarcity").  With Netflix, I have access to just about all the movies in the world.  But, given my subscription model,  they come to me only 2 at a time. 

Two movies are not a lot.  In a world of nearly limitless access, this should be irksome.  But it ain’t, of course, because these are almost always exactly the movies that interest me.  Two movies has a deeper virtue.  "Two movies" is an elimination of all the movies that might otherwise bid for my attention, damaging my sense of value and, God knows, even my identity formation.  (And there’s been quite enough of that, already.)

The fulfillment model is especially clever.  I can speed up the interval at which I receive new movies.  I do so merely by returning the old ones.  This is an interval I do not choose or need to dwell upon.  It is set in train naturally when I finish watching my present movies.  In effect, I am setting my own wave.  I am managing access.  I am mediating plenty in a post-scarcity world.  I am, to this extent, restoring a sense of value.  (The Tarantino picture I own outright on DVD may be diminished by its ubiguity.  The same picture come to me from Netflix is precious because it’s engagement, as we used to say, is limited.)

Furthermore, the fulfillment model feels like an act of generosity on Netflix’s part.  ("Finished those first two?  Here have some more.  No, you don’t have to pay extra!")  This eliminates the cell phone user’s anxiety, "how many minutes (movies) do I have left this month?"  And it restores the feeling of living in a universe untroubled by scarcity.

In sum, Netflix has found a sweet spot.  It has found a way to create the generosity of a post scarcity economy while relieving us of the costs and penalties thereof. And to think that they did so by harnessing the intervals established by the US Mail, an off line institution almost as old as the nation!  (Bricks, clicks and letter carriers!)  The mind goggles.


Thanks to Eric Hayes for consenting to this coverage.  See his interesting enterprise and useful search software here

Thanks to Andy Macaulay at ZIG for the CRIA assignment.

Thanks again to Tom Guarriello at True Talk  for the head’s up.  (See his recent posts on "both/and" as an example of post-scarcity logics.)