Monetizing what's scarce

One school of economic thought says that the price of goods or services should eventually drop down to the marginal cost of production, but of course there are many exceptions to that rule. A better rule is that the price of a good is whatever the market will bear, and value is quite a malleable concept.

One place where supply and demand has held up quite well is in the world of journalism where the internet has lowered the cost of distributing writing so that many folks who in a past life would have needed to admission into the journalism cartel to get an audience can now find many readers without having to work for the NYTimes or other big brand names.

As a result, more and more people have had to turn to monetizing what is truly scarce. For musicians, recorded music is easily digitized and not scarce. The value they derive from that is now negligible. What is scarce is seeing them perform live, so concert tickets continue to shoot up in price, with seats near the front of the stage, the scarcest of inventory, routinely costing upwards of $1,000 a ticket for premium acts like Jay-Z.

The scarcest resource of all is a person's time. We all have only so much of it. More and more we see notable folks monetizing their time directly. Slate + includes, among its benefits, “exclusive access to your favorite Slate writers and editors.” The brilliant Ben Thompson of the must-read Stratechery has a new membership program in which the top tier includes email access to Ben. Consider so many Kickstarter projects and how many of the perks for the highest pledge tiers involve meeting with someone in person.

Of course, this is a practice that is quite old: consider the political fundraiser, in which a presidential candidate can charge tens of thousands of dollars for a table at a dinner. Pledge enough and maybe he or she will shake your hand, take a photo with you. However, in the age of the internet, where scarcity has been reduced in so many areas, I expect we'll see more and more notables turning to direct monetization of one of the scarcest of commodities they can offer: their time.