By Nelson Schneider - 11/17/13 at 02:32 PM CT
Anyone who has ever enjoyed an episode of “Star Trek” probably has fantasized at least once about how much better life must be in the world of the 24th Century. With replicator technology and near-limitless clean energy, humans (and humanoid aliens) no longer need to work for a living, but can instead focus their lives on the things they love. The result is a universe in which most people seem to be perpetually retired, pursuing hobbies or obsessions without fear of being unable to pay for food or utility bills.
Whether or not the real world will mimic “Star Trek” is still an open question. Many of the key technologies are still firmly in the realm of fiction, while others – such as the ability for anything to travel faster than the speed of light – increasingly appear to be impossible. Yet there is one area of our modern day economy that does closely resemble the whole of Gene Roddenberry’s vision of the future: Media. With the conversion from analog, physical media distribution – things like records and tapes – to purely digital distribution via the Internet has removed the biggest obstacle impeding free exchange: Scarcity.
Scarcity depends upon that most basic economic principle of ‘supply and demand.’ When one party has a limited supply of a commodity and other parties desperately want to get their hands on it, the controlling party can charge exorbitant fees, simply because they control the only source. For decades, the media industry thrived upon this model for selling music, movies, and games, using the leverage provided by scarcity to rake in the amazing amounts of profit that were required to undergo the metamorphosis into Big Media. After all, it cost money and took effort to manufacture physical copies, above and beyond the outlay for the creation of the desired media itself.
Yet with the rise of Napster in 1999, scarcity in media was dealt an initial, wounding blow. Consumers of media, among whom number obsessively dedicated fans and archivists, suddenly discovered that it was possible to exchange copies of digital media completely for free. Consumers didn’t care about the initial expense of producing the media, but were merely sick and tired of being price gouged and told what and where they could buy. In usurping at least some control from the monopolistic Big Media, consumers began to wage a war on scarcity, which they only lost due to Big Media’s near-infinitely deep pockets and the willingness of the United States Congress to cave to the status quo, as long as their campaign funding and cushy post-congressional jobs were at stake.
While media still hasn’t thrown of all the shackles of the old ways, the scars left by that quiet war between Big Media and consumers can still be seen. Big Media suddenly found its hand forced, and the flowers of legal digital distribution began to blossom on the old battlefield. Netflix, iTunes, Amazon Instant, Steam, and GOG, to name a few: All of these services could not and would not exist had Big Media been allowed to keep the status quo in its entirety, as they all rely on removing scarcity from the equation. You want to watch a movie? Stream away! There are no limited copies! You want to listen to the latest Justin Bieber album? I pity you, but at least you’ll never have to worry about mobs of tween girls snapping up every last copy at the local music shop. You want to buy that one song you like by that one artist you hate? Go ahead and grab the individual MP3 off any number of digital services… it’s only 99 cents! You want to pick up some PC games you never got around to playing back in the day… maybe a hot new Indie title? Steam and GOG have you covered.
Yet this past week GOG.com, a site for which I have had nothing but praise, decided to travel back in time to a more horrible era of media distribution. The Fall Insomnia Promotion imposed artificial limits on the number of games available at discounted prices, waxing nostalgic about those dark days in the past when retail stores would have sales so good that they’d sell out of product. This limited number of sales for each discounted game was further justified by the waffling claim that the discounts were ‘so good’ that they couldn’t just sell an unlimited number of games so cheaply.
This promotion is flat-out insulting to consumers and walks dangerously close to the old way of doing things. The world has made so much progress in the removal of scarcity from digital products that is it a shame to backpedal, even for a limited time promotion. With GOG setting an example that this type of backward thinking about digital products can work, I fear it’s only a matter of time before other tentacles of Big Media latch onto the idea as a way to return the industry to its former monopolistic deathgrip. GOG has always been about freedom: They sell all of their games DRM-free, after all. Yet they seem to have overlooked the dire implications of what the Fall Insomnia sale is promoting.
Instead of offering limited quantities at discounts, GOG needs to focus more on what they’re good at: Bundling software together, with a discount that grows with the size of the bundle; giving away DRM-free copies of Steam games with a valid Steam key; and giving away games for free for a limited time – TIME not NUMBER. And to be perfectly honest, I don’t see why any of the Fall Insomnia discounts are considered ‘too good’ for unlimited sales. Steam frequently beats GOG’s prices and doesn’t impose artificial limits. After all, in a post-scarcity economy, the goal is not to sell a small number of units at a large profit, but to sell innumerable units at a small profit.
