Even given this "exploding consumptionscape", it seems to me that many people will continue to be guided by peer pressure and other group psychology stimuli.

And that'll start to generate a Zipfian distribution of choices, admittedly flattened dramatically by the smart aggregators, but it'll be there nonetheless, surely?

(Please feel free to correct me - I'm no economist and I'm still trying to understand the finer details of all of this)
 

Talent is the scarce resource that doesn't factor well into the Media 2.0 economic model. Exceptional talent will continue to produce exceptionally valuable content. Ridley Scott will not simply retire and say "Oh well, there is no place for me" nor is Ridley the "product" of a Media 1.0 economic world. Some people are hyper-talented, and some apparent talent is manufactured. Media 2.0 will make the differences more obvious, and change the opportunity landscape.

Not all hyper-talented individuals will choose forms that microchunk well. Art knows no bounds. For some like Madonna, form derives from function. For others, like Warhol, function is appropriated by form.

One really important word that occurs frequently in Hagel's excellent article is "talent". Too many media theorists assume that in a world of plentiful media the value of media will reach zero. While it is true that the cost of the distribution of media will reach zero, the value is quite different. The difference can be accounted for by talent, star quality, and contemporary focus (DJ remixes of Elvis tunes are more popular than the tunes themselves sometimes).

The 2.0 challenge for Media 1.0 companies is to try to figure out how to connect two scarce resources: talent and audience attention. And indeed, for reasons you have so deftly outlined, it will be a totally different game.

It's a bit risky for me to even comment here. I'm still learning more and more from your work, Umair, and you are responsible for the elimination of several layers of dust on my economic bookshelf. Thank you.

But you do need to be careful not to flatten media into an undifferentiated resource, and focus a bit more on how hyper-talent factors into the 2.0 model. The really important question is not whether the blockbuster "strategy" will die. It will. The question is, how will Ridley Scott and his successors create the cultural media events of of the future in the Media 2.0 landscape. There will be blockbusters.
 

Guys,

Let's differentiate between "blockbusters" - a bit of media that realizes huge returns because it maximizes utility - from *the blockbuster strategy* - marketing economies of scale and scope.

Don't conflate these - they're two very different things.

That said;

Gary,

You're right. Of course talent will out. That's the whole point. This talent will, I'm betting, be recognized via snowballs - not blockbusters.

The snowball effect is another name for returns to [talent, creativity, etc] rising dramatically, as value creation becomes aligned with capture.

That's already happening - think about the new breed of bands getting famous via Myspace - they're snowballs, not blockbusters.

Paul,

That's an interesting point. I think to extent cognitive biases will paly a role - and we see that they are; think about info contagion on Digg, etc.

But those are transitory phenomena.

Think about the stock market - in the short term, it's hugely irrational. In the medium term, it's at least fairly rational.

The same dynamics are already at work in 2.0

Thanks for the comments.
 

As a quick follow-up, and by pure coincidence, I just spotted an article on the BBC News website entitled Musical taste 'swayed by peers' which reported on a study which found that:

"...the power of group opinion meant people who visited a new songs website gave higher ratings to tunes which had been downloaded often.

Participants were also more likely to download a song if they knew others had done so, creating a snowball effect."

There's a bit more on the BBC report, but no link to the actual research, unfortunately.

I'd be interested to see how much of a factor these psychological factors will have on media 2.0 - whether they can influence things strongly in the long term or whether they're just currents and eddies that don't affect the course of the stream.