Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
The columnist's Vuitton interjection is indeed stupid. Varian never argues for a strategy to convert (cheap) internet readers into paying readers of (cheap) luxury brands; Varian argues how to monetize exclusivity by targeting a large number of qualified prospects. (Chris Anderson later elaborated and popularized the concept of "long tail" economics-choice theory and marketing.)

The NYT boast had to have been made over a couple bottles of very expensive whine -- which isn't to discount however a truth that time (and an evergreen renewal mechanism) mitigates churn by inducing passivity in subscribers. Look at AOL's base. A crypt. srsly.

As for "a sea of news": Somebodies need to make up their minds. Either the LA-Newscorp-Fox monopolizes "media" markets or it doesn't. If it does, duplication of stories, syndication, and "meme" are fitting attributes. If it doesn't, quantity of LA-Newscorp-Fox referrals online indicates consumer preference.

I'd pick three Varian 1999 imperatives to revenue optimization in a "networked economy" to predict the "migration path" to increasing subscription content over the next ten years.

  1. Managing lock-in. subscription digital migration, ISP (speed, storage, service area), software, hardware. i.e. before entering "content" markets.
  2. Digital rights management. Beyond RMAI. Varian asked: "Let's suppose that you are the owner of some intellectual property and have the legal right to market it as you will. {NB. ET work-for-hire] How should you think about the terms and conditions under which you will make your product available?"
  3. Collective switching costs.

In conclusion, I want to emphasize. Information Rules captured interntet management gestalt for the century; it hasn't missed a call. Varian is now chief economist at GOOG which is exceeeeeedingly well positioned to tip its user base. So don't be surprised, when one day you tune in to choose between "bundle" @ EU 5 or unit @ EU 0.99.

Diversity is the key to economic and political evolution.
by Cat on Mon Jul 5th, 2010 at 12:33:17 PM EST
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