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  • The Physical Law of Extremes - The Digital Law of the Middle

    By Joshua Kim March 31, 2011 11:15 pm EDT

    Let me try out a theory on you. Not sure if it makes any sense, I'm one of those people that needs to write what I think, (and then discuss it with you), in order to get things straight in my head. And this NYTimes paywall thing is really bugging me.
    Physical things that exist as single-use conduits of information (paper books, paper newspapers, paper magazines) and physical places that are containers or platforms for information delivery (college campuses, bookstores) will in persist, and even thrive. However, for these physical conduits and containers to survive, they will either need to move far up-market, or way down-market.

    Books made of paper will need to be either really beautiful and offer a superior tactile experience, or they will need to be very cheaply produced on thin paper and be basically disposable. I'll be less price sensitive to a paper copy of the NYTimes or a magazine if real attention is paid to the quality of the design, layout, paper, and printing. Or I'll pick-up a free paper newspaper that I may or may not read, and will skimmed and thrown away.

    What I will not buy is any one-time conduit of information (book, magazine, newspaper) that is somewhere in the middle. Too expensive to easily throw away, but too cheaply made to want to keep in my collection. Everything else, everything between the very low-end and very high-end product, will be delivered digitally.

    The "big middle" of information delivery will move to digital, online delivery.

    On the higher ed side, I think the connection is with how our campuses will look. We will in fact see an acceleration of amenities on residential, high tuition, campuses. Fancy classrooms, athletic facilities, libraries, dorms and food-service operations will get fancier. On the other end, lower-tuition institutions will become more spartan (in order to lower tuition even more), with most of these amenities outsourced moved to variable pricing schemes, with students paying per use. Physical campuses will continue to exist because it costs less money to provide a good, low-amenity (unbundled) education than a comparable learning experience online.

    The "big middle" of higher ed will move to digital, online delivery.

    If this theory is correct, when evaluating digital pricing we should first be asking: "Does the digital price fall somewhere in between the high price for a luxury physical good and the near zero price for a disposable or no-frills physical good?". The digital experience needs to be superior to that which can be had with a low-end physical experience, but not as good as what can be enjoyed with a high-end physical purchase.

    This theory also suggest that, over time, most information services will migrate to digital, as the "middle" experience will be the most numerically common good. As the digital middle grows, the physical middle will be pushed further out on each quality tail.

    What do you think? I know that this thinking is completely incomplete, what I want to know is where this thinking is wrong.

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Comments on The Physical Law of Extremes - The Digital Law of the Middle

  • An important difference that will slow the move to bits.
  • Posted by Brian on April 1, 2011 at 4:30am EDT
  • An important difference is that publishers of ebooks, music, and other digital media are using new business models in which the customer merely rents access to the content rather than owning a copy that they can use as they want including the possibility of selling it to a third party.

    Media with digital rights management (DRM) technology can be a real pain for consumers, as it can limit the ability of the consumer to access the material on all of their devices, and because it makes it completely impossible to sell, rent, or share the item.

    This is a fundamental change in the way this business transaction works, and it may lead some consumers to resist going to a digital format.

    Notice for example that although many consumers loved Apple's iTunes service, many others preferred to purchase CD's (which although digital could be resold or lent to a friend and did not have DRM.) When digital downloads without DRM became available, the move towards commercial download services and away from CD's seems to have speeded up. There are similar issues with ebooks. So far, the publishers have managed to hold the line on DRM, even though many consumers don't want to buy DRM'd content. Personally, I refuse to purchase ebooks or music that have DRM.
  • Recycling, in more than one way
  • Posted by Rebecca Hedreen , Library Coordinator for Distance Learning at Southern Connecticut State University on April 1, 2011 at 10:00am EDT
  • First, I hope that your "throw-away" paper consumables are actually recyclable. Cheap paper binding is recyclable like newspapers; think phone books.

    There's an additional recycling that happens in education--the print textbook. At colleges and universities, the used book market is as strong as the publishers will let it be. No matter how often we tell students that their textbooks can be resources for long after their courses are over, many students still sell them back as soon as possible. So a DRM'd textbook that expires, or can't be sold back, etc. is actually competing on price with the price a print textbook *sold back*.

    In a way, the textbook is a "disposable" item as well.
  • Finding the middle
  • Posted by sibyl on April 1, 2011 at 9:46pm EDT
  • I agree that education, like most other consumer goods, will push away from the middle into a bimodal distribution. But I am not sure that the middle will be taken over by digital delivery. I suspect that digital delivery will grow at the bottom of the market, because the no-frills people will be driven by cost rather than quality, and it is easier to produce a cheap course of low quality than a cheap course with low amenities. So I think we'll see the boutique IHEs where the price is $100,000; and the no-frills IHEs where the price is $10,000; and the digital IHEs where the price is $1,000.

    I don't think your model holds for education because it's not a physical good but an experiential one. What makes it work isn't the books or the classroom but the process, where the mind grapples with the ideas in the context of other minds (discussion, graded written work). Once we graduate from college, we don't have to keep our notes or our books (though many of us do). It's not a physical good.

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