Monday, October 26, 2009

The fantasy of the digital market

Anderson’s piece gives us a sense of the new economic model for the media and entertainment industries. It is especially useful nowadays regarding how the digital entertainment economy really works. However, here is my big question about the law of the digital entertainment economy. Is the online market really a world of abundance? If it is, to what extent does it guarantee that abundance will be available to individual consumers? As mentioned in the article, online markets, especially the digital entertainment market, limits individual tastes by, for example, the recommendations of Amazon.com and pre-selected music on the front screen of Rhapsody. Such filtering mechanisms are likely to influence consumers’ personal taste. Ultimately, the markets will not provide other products to consumers unless they have been requested. There is a similar effect with Facebook. The Web site suggests people who live in the same area or belong to the same social groups as I do. Thus, I agree with the law, to some degree, which argues that the digital entertainment market guarantees greater supply to consumers than did the offline market. Still, I wonder to what extent the online market law is different from the offline version.


The approach taken to the digital news economy compels me to think about the digital news economy. Would it be the same as the law of the digital entertainment economy? Would the hit-driven mindset work for the news too? For example, in the entertainment industry, recommendations are a remarkably efficient form of marketing, since they indeed influence the tastes—and decisions—of individual consumers. Would recommendations about news also influence the tastes of news consumers? It might be better to define these tastes as opinions and attitudes relative to news consumption. In addition, in the digital entertainment market, a “power law” demand curve seems to be at work. So how might the consumption of news change? Would the law—an increase in supply results in a decrease in price that ultimately affects the increase in demand─still work for the news consumption model in the digital market?

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