

Salesman of the irrational - latif
http://www.economist.com/people/displayStory.cfm?story_id=14857221&source=hptextfeature

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jamesbressi
Mr. Biver says “People want exclusivity, so you must always keep the customer
hungry and frustrated.”

I agree when it comes to tangible goods (Think Apple, Nintendo Wii early on),
but I don't believe I have ever seen this work for virtual products.

Agree? Disagree?

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kurtosis
That's a very interesting observation. What do you mean by virtual products,
"media"? Many people cultivate a taste for obscure food, music, movies, and
literature. Surely some of the appeal of these obscure bands or movies has to
do with the exclusive feeling one gets by belonging to the minority of people
that know about them. There's also a need to always search out new and
different things to stay ahead of the majority when the obscure is
"discovered" and becomes mainstream. Undoubtedly the market for art (paintings
sculptures) provides an example of a virtual good that can fetch a huge price
at auctions. Although by the time rich people "discover" an artist and start
bidding millions for their work, all of the true artistic innovators have
moved on to something different. So it actually appears that there is a
transition - knowledge provides the exclusitivity in virtual goods for the
artists while money and the ability to sustain bidding wars provides the
exclusivity for those who don't have knowledge. There is a cyclical behavior
also - every harvest a very tiny minority of obscure virtual goods are
randomly chosen for mainstream success - their prices are amplified by bidding
wars among non-artists, while all other members of their crop are left for
dead.

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jamesbressi
I was talking more of virtual apps such as blogging apps, productivity apps,
etc.

But you make a fantastic point.

I just don't see this working for virtual products such as this, but it
undoubtedly works with tangible goods.

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kurtosis
I guess if an art collector buys an "original" instead of a print there is a
feeling that they actually "own" the painting - even though in terms of
viewing a print is equivalent and possibly more durable than the original.

How can you restrict duplication so that someone could "own" a virtual good?

DRM seems a little bit silly for things like music or movies or images because
"using" a DRM protected object requires removing the protection just enough to
copy it (despite the efforts of hardware DRM) but perhaps virtual goods like a
house in a virtual world could be sold in a form where a copy cannot be
substituted for the original. Is this possible? One can imagine a virtual
house that contains the cryptographic serial numbers of all of the virtual
bricks used to build it. The virtual world then only has to enforce a
conservation of virtual matter...

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EugeneG
I wonder how the cost of lost sales during the good times balances with
profits from more consistent demand during the bad times.

