Convenience is particularly important for pornographers. Pornography is readily accessible for free on the internet, yet subscription sites are still profitable. Subscription sites allow individuals to have the convenience of downloading large amounts of high-quality pornography from one high-speed location. Such sites are usually easily navigable and provide a high degree of reliability. Users are willing to pay for this convenience even when pornography is available for free.

Forcing users to update their zero-marginal cost goods on a frequent basis is another way to compel users to pay for a subscription-based service for the goods. The reliance on updates is particularly important when users interact with one another. Even if the software of massively multi-player online role-playing games can be replicated, users are willing to pay for subscriptions because the games are routinely updated and updates are required to interact with other users.

I agree with your first criticism that my first category might be too broadly defined. I just don't know if I see a meaningful distinction between those two categories other than that one is tangible and the other is intangible.

I think that the third and forth category is often related, but not necessarily related and consequently should be kept separate. The reason why I would keep them separate even if they are often related in reality is because this establishes a cleaner theoretical framework. I think that all four are often related. Most people do not use any one of the strategies in isolation.

I am not ready to embrace such a future. I just see it as highly likely. People really like Facebook and Pandora. Pandora isn't even seen as a danger. I use Pandora. Do you use Pandora? Do you feel like allowing your musical tastes to be so heavily influenced by Pandora is a good idea? I would actually really like it if Google recommended books to me.

I finished Winston Churchill's first book on the Second World War recently. It was fantastic. Seriously. It was one of the best books I've read in a while. Then I read Superfreakonomics, which was well-reviewed. I really didn't like Superfreakonomics though. Then I read Jared Diamond's Collapse, which I thought had its ups but was entirely too long-winded. If I could read these books on a Kindle with Google recommending books that I would love, then I would almost assuredly be complicit in my own destruction.

Wouldn't you? Do you like Pandora? If Facebook could introduce you to people whose company you immensely enjoyed and recommend activities you would enjoy, would you not want Facebook to do that for you? I waste a lot of time doing a lot of random crappy things with random boring people. I would love a device that told me who I would want to associate with. Of course, my personality, if it remained anything similar to what it is now, compels me to hang out with pro-abortion people, anti-abortion people, religionists, atheists, Satanists, the poly community, the LGBT community, White Separatists and any other fringe group that I can't think of at the moment. Facebook, if it tried to appeal to me, would introduce me to a diverse range of interesting and random individuals who were all random in the particular Steve-Wu way. I would love a device that told me what exercises to do and what foods to eat to have the physique of so many Hollywood idols.

If I could have my future employers offer me a device that I could carry so that I could maximize my value to them, I would carry it. Perhaps some kind of machine that would issue orders from HQ so that at every waking moment I could be a productive capitalist cog. Hell. It would offer me the ability to go home once in a while. I could sleep when it would interfere with work as little as possible.

After hearing some of the arguments, my feelings are that in the future we will be forced to live in a world of complete nakedness. I think in class we incorrectly assume that people do not want advertising or data aggregation. This is just not empirically true.

Do these clarifications and the edits above address your comments?

-- StevenWu - 19 Nov 2009

The first category that you identify may be defined too broadly. The term “bundling,” suggests the tying of non-zero marginal cost goods to zero-marginal cost goods either literally or technologically. For example, creating videogames coded to play only on a proprietary platform. This kind of activity is different in kind from simply laboring to produce something that people will feel motivated to pay for due to feelings of “charity, community, authenticity, and emotional security.”

The second category that you establish seems to suffer because it does not distinguish between creating a compelling distribution system and compelling people to use your distribution system. Updates that create strategic incompatibilities coerce the customer in a way that a simple offer to distribute content efficiently at a price does not.

The third and fourth category that you identify could probably be collapsed into one category. Every content provider that is in the advertising business has a strong incentive to mine data in order to increase the value of its advertisements. This fact begs the question of who really provides content with ads without collecting any user data.

Finally, I agree with your general point that data mining can create a desirable kind distributional efficiency if it is used by content distributors to reduce consumer search costs. I do, however, recoil in fear at the thought of Facebook being able to correctly suggest who I should “friend” and where I should go to meet my new friend for lunch in order to have a meal that we will both enjoy. Are you really willing to embrace such a future?

-- StephenClarke - 19 Nov 2009

I thought the analysis was good, Steven. You might wish to consider adding some hyperlinked text for some additional factual support. For example, you could add statistics on MMORPGs demonstrating your claim that subscription-based games are preferred over free games. Or link to reports on AdBlock? for section III. I feel confident you already know this, but the earth/chain icon in the edit screen creates the external link formatting just in case.

One other thought I had was that a fifth strategy is giving goods for free with donation encouragements. Or maybe this ties in with your discussion in section II.1.

It was a smooth read. I would welcome your thoughts on my essay if you are so-inclined.

-- BrianS - 19 Nov 2009

I edited based on your paper. Thanks for the thoughtful paper. It was fun to read. Also, thanks for the comment box.

-- StevenWu - 19 Nov 2009