According to Tom Foremski, as much as we complain about how expensive things are getting, we're surrounded by forces that are making them cheaper. Forty years ago, the principal nutritional problem in
It seems to be accurate the notion that Internet devalues everything it touches. Anything that can be converted or made digital. You should notice that we use the word devalue with a materialistic connotation and not in the cultural value sense and that we use the word internet to refer to a class of distributed technologies and applications. The truth is that as you take the friction out of the economic system pricing goes down; Internet remains the ultimate economic lubricant.
Internet made possible the following devaluations:
- The price of a 10 song CD was around $20. Now If you use Lala.com you can pay 10 cents per song for lifetime streaming rights.
- The money spend on buying software application was possible to reduce due to the large percentage of or nearly free applications available online. This trend is likely to continue. Given that companies like Google plan to buy software companies and then offer those products online for free — this instantly devalues competing software applications.
- Telephone communications are much cheaper today thanks to services such as Skype and other VOIP based products. It used to cost $2 a minute to make a transatlantic telephone call but now it’s only about 5 cents.
- Public relations are being devalued because now fewer people can do the work of more people than before and small teams can do the work of the previously used large teams.
Internet allowed depriving from monetary value products and services such as:
- Music by offering it for free (which ended up being really successful for musicians such as Trent Reznor, and the Radiohead band members).
- Online games can be played for free because parts of the gaming industry are ad-supported.
- Some newspapers like "The New York Times" since the year 2007 can be read for free (This reminds me of an aphorism from 1984: "Information wants to be free. Information also wants to be expensive ... That tension will not go away.")
According to Chris Anderson, the fact that money is not the only scarcity in the world becomes evident now. Chief among the others are your time and respect, two factors that we've always known about but have only recently been able to measure properly. The "attention economy" and "reputation economy" are too fuzzy to merit an academic department, but there's something real at the heart of both. Thanks to Google, we now have a handy way to convert from reputation (PageRank) to attention (traffic) to money (ads). Anything you can consistently convert to cash is a form of currency itself, and Google plays the role of central banker for these new economies.
There is, presumably, a limited supply of reputation and attention in the world at any point in time. These are the new scarcities — and the world of free exists mostly to acquire these valuable assets for the sake of a business model to be identified later. Free shifts the economy from a focus on only that which can be quantified in dollars and cents to a more realistic accounting of all the things we truly value today.