Investing in Content (and Admin)

If you've been reading the comments, you'll notice that I've had to delete quite a few over the last few months, all from the same guy.

So perhaps I should reiterate the rules here at bubblegen.

1) This is your space to debate.

2) It's also everyone else's space to debate.

3) Be civil.

4) If you make personal attacks, they will always outweigh any argument you want to put forward, and your comment will be deleted.

It's fine to say an investment, strategy, product, service, statement is stupid, clueless, asinine. It's not fine to single out a specific person - any member of this community - and try and deliberately humiliate and insult them.

5) You may not like these rules - tough. Interacting with the commmunity here is a privilege - not a right.

Now, as to the argument the commenter keeps making. He obviously wants very much to discuss with me and the rest of you.

So, here's the argument. It's actually very simple: attention isn't scarce/unique/etc, content is, and so we should be investing in content, not in attention.

Now, I've responded to this many (many) times. I'm not about to rehash the whole non-conversations that ensued.

But here are two points to chew on.

1) What said commenter is trying to argue is that "talent" is scarce. Fine - indeed, it is (ie, "talent" assumes scarcity).

The whole point of econ/strategy is that we don't live in a perfect world. If we did (if we had perfect information/perfect competition/etc), we would identify the most "talented" producers, invest in them - and reap zero profit, because everyone else could do exactly the same, bidding margins down to nonexistence.

Rather, if we really wanted to think strategically about the role of talent, we would begin by assuming that content creators have different endowments of talent. Then, we would note that talent is hard to identify - information is asymmetric. Then, we would probably also note that talent by itself is often useless - it needs to be converted into/combined with numerous intermediate inputs to actually create value. Then (finally) we would try and model the various assumptions surrounding value capture (is there perfect competition? are there network effects? is talent, to some extent, a public good? what other variables need to go into our equation?)

It might surprise you (and the commenter), but economists have a now ancient word for "talent" - human capital. Essentially, we are modelling how human capital affects profitability/productivity/whatever.

That's a perfectly valid model. But the point is human capital isn't the sole variable in it. If it was, we would have little need to...think about much of anything.

2) In case it's not obvious, there's an existence proof the size of Jupiter which contradicts this argument: if it did hold, we could all buy (have bought x years ago) portfolios of Viacom, New York Times, Washington Post, EMI, etc - and watch (watched) them skyrocket.

Clearly, we'd be pretty foolhardy to do this: we would lose our shirts.

If the content argument holds, $100 invested in NYT/EMI/etc X years ago would be worth more than $100 invested in Google. Of course, nothing could be further from the truth: value has shifted dramatically from those players to Google; from content/publishing/etc to attention.

Comment, discuss, agree, disagree - I am really sick of talking about attention/content/etc to tell you the truth.

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