What’s going on in the information economy?
Last night, Marketplace shared an interesting – although not at all surprising – statistic:
…the number of movies rented or purchased online will jump by 135 percent this year. But consumers are expected to spend $11 billion buying DVDs and Blu-ray discs this year. Compare that to less than $2 billion they’ll spend on movies over the Internet.
We’re watching more movies (and television) online than ever before. In my own life, it’s a rare occurrence to opt for the 60″ flat screen over my 13″ Mac Air. It should be noted that this is further proof that I am not a man.
Many more of us are opting to watch a majority of our movies on all-you-can-eat-for-one-low-monthly-fee websites like Netflix or Hulu. We’re not purchasing DVDs at the same rate we’re streaming movies.
Ya know how most of us don’t collect CDs anymore? It’s kinda like that.
This is a market going through a drastic shift. This isn’t a trend it’s a complete & utter transformation of an industry.
This is great for consumers right now. Sure, we have our gripes about the quality of what’s available online or the seemingly erratic behavior of some of these companies. But for the most part, we’re in hog heaven. Access, baby. We’ve got access!
Except, according to this same Marketplace segment, the industry isn’t ready for this fundamental shift. What’s new, right? What would be new is if the entertainment industry was actually ready in terms of programming, production, intellectual property, or business model for any of the technological shifts that have of taken place over the last 60 years.
If the industry can’t make the money they need to make in this shift, jobs will be lost, quality could suffer, and studios could close. They’re in search of a new business model. Again.
I know, I know. You thought this was about the information economy not the entertainment industry. What’s the moral of the story?
Don’t let this be you.
Do you want to be the disruptor or do you want to be one of the disrupted?
— Umair Haque
The base price of information today is FREE. And it’s getting cheaper every day.
What used to be a “great value” at $97 is now free.
The information market is as thick as split pea soup. I don’t care how finely you hone the tools you use to sell the information, the first response is and will continue to be, “Is it really worth that?”
And that means for all your brilliance, all your value, it’s harder & harder to justify the price of what you’re offering.
What was today part of a valuable exchange may tomorrow be a tough sell. This isn’t obsolescence. The information is still good. Just not worth as much.
Is that all the genius is worth? Of course not. Once again, it’s an issue of substitutes.
— Seth Godin, What is Bach worth?
Why is this happening?
It gets easier to enter this market every day. More resources for selling information means more people are selling information. It’s a nasty cycle.
To add to that, what was highly prized information even 6 months ago has been read, processed, and released through other products at a cheaper cost. That’s not copyright infringement, it’s how information works. I teach you my idea, that idea gets incorporated into your ideas, you teach your ideas. Rinse and repeat.
This pushes us towards new thinking & innovation. Except when it doesn’t. It’s your job to stay on the cutting edge or risk not only being left behind but left without a penny in the bank.
Complacency is the shortest route to the poor house.
The other thing going on, of course, is inflated supply. With millions of people trying to make a living off their bright ideas, how long can supply sustain a high value? Not long.
The app economy – think micropayments for small pieces of software – has made this work by catering to scale. A dollar here & there times a million is still a nice payout. How different is the information you have for sale? Are you willing or even able to find a million customers?
When in doubt, think beyond the “usual” way things are done.
There is a limitless number of ways to delight people — not an a la carte buffet of pre-approved information marketing tactics or even types of information that are valuable.
All too often I hear “how to” is the only way to sell ideas.
To cut through the clutter and prove the value of what you have to offer, you must step outside of “normal.” And to never forget that “normal” changes every day.
What’s a booming DVD business today could be streaming for free tomorrow.
Meanwhile, those who stay ahead of the curve, who discover new ways of delivering value, who never stop thinking about what their customers need to become fully realized human beings, have opportunities to reap ever more financial wealth from the information economy.
What does that look like?
Just like the entertainment industry is stabbing in the dark with online distribution, information & insight dealers are looking for the next best thing.
I think the key is to not look for just “the next best thing” but “your next big thing.” Big difference. What is based on your experience, strengths, and unique perspective is more likely to have value staying power.
Case in point: People are paying more for my book, The Art of Earning, than they were 6 months ago.
The tide is changing. Are you ready?
Clearly, I believe the information economy is changing. I believe that even 2 months from now the way people buy ebooks, digital programs, and even coaching will look completely different. I am coaching my clients through this shift.
What we’re not doing is falling into existing models. There is no “first you release an ebook, then you release a course, then you offer full access” thing going on here. There’s no “typical life coaching business model” to draw on. That path is dying (or already dead). Hopefully it signed a DNR.
Conventional wisdom is a bad product. What other assets do you have to trade in? Personal access? Personal experience? Personal perspective? Collaborative wisdom?
You’re going to have to think this one out for yourself. You’re going to have to decide what’s valuable about what you do & how that matches your customers (sometimes unperceived) needs. You must see opportunity where before there was none. You’re going to have to make bold statements about what you believe and how you operate.
And you’re going to have to translate that all into a package that makes sense for your customer.
It’s a tall order.
Are you up for the challenge?
We’re having a similar conversation over at Reclaiming Wealth. Join in and — get this — pick up a FREE book on the intersection of money & meaningful living.