More People Realizing That Giving Stuff Away Can Increase Revenue
from the about-time dept
When we discuss the importance of understanding economics when scarcity is removed, one of the key points we’ve tried to make (though we don’t always succeed) is that when companies learn to embrace the economics it actually increases the size of their market — if they understand where to focus for profits. Unfortunately, too many people seem to assume that this is a struggle between producers and consumers and that if one side wins, the other loses. However, it’s not a zero-sum game, and you don’t need to focus on “balancing” both sides when both sides can come out as winners. That’s why it’s amusing to see the NY Times seem positively shocked that an amazingly expensive conference like TED has discovered it can make a lot more money by giving away the videos of its exclusive presentations for free online. They make it out as if it’s somehow “counter” to basic economics, but it’s not. TED isn’t just selling the content of the presentations, they’re really selling the overall community that attends the conference, meets the other smart folks at the event and has a chance to discuss and debate the ideas and concepts presented. When you realize that, giving away the videos isn’t counter to anything. It makes a tremendous amount of sense, because it only enhances the brand recognition of the event as well as the overall value of attending. In other words, giving the non-scarce stuff (the presentations) away helps increase the value of the scarce stuff (tickets to attend) just like economics says it should.