Let Life Grow! - [PT. 3] - "Self Destructions"
This is a continuation and the last part of my Let Life Grow! series, previous parts:
[2] https://steemit.com/life/@freddy008/let-life-grow-pt-2-life-from-random-noise
[1] https://steemit.com/life/@freddy008/let-life-grow-pt-1
In this part we will analyze concrete examples of destruction and oppression that humans do to themselves and to their environment. The following examples usually happen in the business world:
Cutting costs is a very predominant phenomena you see in capitalism and the business world. Of course you can say that cutting costs is good because it increases efficiency and improves the business, but let's just think for a second, there are more consequences here that most businesspeople ignore.
- You all know the example of a free hosting service giving you 10 GB of free cloud storage space. It's a freemium business model, they give you 10 GB free and then expect you to subscribe to a paid model. The free 10 GB is the bait, they catch their customers, sort of marketing technique. They get tons of customers, some of them go premium, some don't. Then they cut the space to 5 GB because they see that 70-80% of their clients don't purchase the premium hosting. They are greedy, they want to cut costs and to become more efficient. Then they lose half of their customers because the 5 GB is not that appealing, and half of their paid customers go away too. Their business takes a huge downturn.
- A popular youtuber with 100,000 subscribers and with good audience is getting paid from the ads in his/her video. He only gets as much as the people click on the ads, since most people use adblock his revenue is very low compared to what it can be without adblock. He decides to go pay-to-view and charge for every video. All of his subscribers leave, because they don't like this. His video blogging career is over.
- Hollywood studios and Record labels are tired of torrent sites that let people share movies and songs for free. Most people that torrented the media will watch/listen to it, and then go to a cinema to watch it again or buy the CD/DVD. It was a demo, and if they like it, they will pay for it. Hollywood is too greedy, they want to shut down all torrent sites and impose draconian copyright laws. Ok they succeed, and now they have to spend a fortune on advertising, because they don't get the promotion they used to get with torrent sites. In fact they might even go bankrupt.
It is the same thing all over again, they don't like small people, they don't like the growth manifesting itself, they cut off the roots of their success. It can also be related to the Streisand effect, but it's more than that:
https://en.wikipedia.org/wiki/Streisand_effect
This is what I am talking about, and this doesn't just happen in the business world, but in other domains as well, let's continue:
- Politicians only want to increase your taxes 1%, you know to pay for this and that. First it doesn't affect your spending & business. Then they increase it again by 1%, then again, then again and again and again... Now you are taxed at 99% of your income. You are devastated, your business is over, your spending is over, pretty much your life is over, because everything you create is just destroyed.
- Politicians want to pass only 1 law to regulate X industry. Then they find out that that law doesn't really regulate it properly because there are still issues. Then they pass another one, and another one and another one.... Now X industry is just finished now because nobody can keep up with the red tape and fines. Now they have to subsidize them....
Politics is really just a game of thrones, and they destroy more than they create, certainly. This phenomena relates to the Butterfly effect: https://en.wikipedia.org/wiki/Butterfly_effect
So the bottom line is that less is more or that the more greedy a person becomes the less it will achieve. Certainly nature has a very mysterious way to balance itself out, it doesn't let greed last for long and it certainly doesn't reward those that seek it.
In every aspect of our lives we must learn humility and to really know our boundaries, because stepping outside of them might not be the best thing for us.
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Also this is the last part of this series, so let me know in the comments below if you've liked it!
A popular Youtuber? First you used "his/her" to refer to this person's video. Then later on you went with "his" subscribers and "his" videos. What happened? At first you were uncertain about the person's gender... but then later on you figured out that the Youtuber was a guy?
If you're going to invent a popular Youtuber then just take a second to give the person a name/gender. When I'm feeling lazy I just go with "Bob". If I'm feeling more inspired I go with "Samantha". She's a hardcore pacifist who really loves biodiversity. And, even though she's not real, I'm kinda attracted to her.
So Samantha is a popular Youtuber but her ad revenue is meager. She switches over to pay-per-view and her followers unsubscribe. Does Youtube even have a pay-per-view option? In any case... there are a couple possibilities why her subscribers quit. Either the price per view was too high... or... they were free-riders.
The free-rider problem is why we pay taxes. So, since we've been paying so many taxes for so long.... we should hope that the free-rider problem is a real problem. Now, if you think about it... paying taxes is actually the subscription model. Kinda just like Netflix, Spotify and Kindle Unlimited (KU). You pay a fee and get the same big bundle as everybody else.
What model are we missing? We're missing the micropayments model. Imagine that there are coin buttons under Samantha's videos... 1 cent, 5 cents, 10 cents, 25 cents and 50 cents. Then her followers could use the coin buttons to let her know how much they enjoyed her videos. If Bob liked one of her videos only a little bit... then he could click the "thumbs up" button. If he liked the video a little bit more... then he could click the 1 cent button. If he did so, then a penny would be instantly transferred from his digital wallet to her digital wallet. The more he liked a video... the more money he could give her.
Of course... there would still be the free-rider problem though. But I think that.... once it's as easy to spend your money on a video as it is to "like" it .... then people will be far more inclined to do so. What's a few pennies? Not much! But if you have enough people who kinda like your videos... then the pennies could really add up.
With this in mind, let's take a look at Netflix. You're already giving Netflix a lot of pennies! What if Netflix gave you the option to allocate your pennies to your favorite content? Would it be useful for subscribers if they could use their pennies to communicate how much they enjoyed their favorite content? Would it be useful for content creators to know which content was the most valuable? I sure think so. I refer to this model as the "pragmatarian" model.
Each model is kinda like a different market. And some markets are better than other markets. From my perspective, the effectiveness of a market depends on the accuracy of its value signals. Accurate value signals create accurate treasure maps. I'm thinking that the pragmatarian model would create the most accurate value signals. You're spending the pennies anyways... so you might as well use them to accurately communicate your valuation of the content. Everybody doing the same would create accurate value signals for content creators to see and respond to.
The free rider problem is not a problem, that is where the money comes from. You cannot expect everyone to pay every time. It's not about micropayments, although that could help a bit, the problem would still persist.
Some people will pay some time, but not all people will pay every time. It's a random pool of users that we have with random behaviour, and the profit is growing out of that pool. It's like if you have a hat filled with rocks and diamonds, sometimes you pick the rock and sometimes the diamond, but not always the diamond.
We have to let the random process manifest itself, in other words let the rocks be picked, so that we can pick the diamonds later.
Yes Youtube has a pay-per-view subscription model, but very few people use it, because people figured out that the freemium model is the natural way to do business.
Bob grows poison oak while Samantha grows artichokes. We need to pay Bob to grow poison oak in order to pay Samantha to grow artichokes later? The point of paying people is to communicate our valuation of their use of society's limited resources. The more valuably a person uses society's limited resources... the more money they'll receive... and the more money they receive... the more of society's limited resources they'll be able to use... and the more of society's limited resources that they'll be able to use... the more value that will be created. It should be pretty intuitive that we want more of society's limited farmland to be used for artichokes than for poison oak.
With private goods... like artichokes... you can only benefit from them if you pay for them. But with public goods... it's possible to benefit from them without paying for them. As a result, the value signals for public goods are less accurate than the value signals for private goods. This means that lots of society's limited resources will be inefficiently allocated.
In order for society's limited resources to be put to their most valuable uses... we have to know people's true valuations of all goods. So it's a problem when your allocation to a Youtube video, Steem story, Facebook post, Twitter post or Flickr photo is less than your valuation.
allocation < valuation = problem
Content creators aren't mind readers. So if consumers don't use their cash to communicate their true valuation of content... then creators will not make truly informed content creation decisions. The logical, but detrimental, consequence will be a shortage of valuable content.
Frank: I don't value your content THAT much (= lie = free-rider problem)
Samantha: Oh, so I guess I'll supply less of it (-> shortage of valuable content)
But if content is paid to consume then the price immediately drops to 0.
If there is a singer that sells his music for free, and one that sells it for 1$, given that there is competition and they will be similar in quality, everyone will prefer the free stuff.
Nobody is willing to pay for something trivial, even if the producer has put tons of work in it. The value is set by the market not by the content creator.
This is why all content creators use 3rd party monetization tools, otherwise they would all go broke. Nobody is willing to pay 10$ for a youtube video, but if they see a nice T-shirt there they might buy it for 10$, and the producer gets a comission from that.
So it's not a problem about valuation, but the fear that the market would value abundant content like videos to 0$.
But you're forgetting about the subscription model... Netflix, Spotify, Amazon Kindle Unlimited, the government. You have to pay taxes anyways... so why not allocate your taxes to the public goods that you value most? I'm already subscribing to Netflix... so why not allocate my fees to the content that I value most? It's not like I'd save money by allocating my fees to less valuable content.
Imagine if Steem switched to the pragmatarian model. Maybe each month we'd all have to pay $1 dollar.... but we could choose which stories we allocated our pennies to. Why not allocate our pennies to our favorite stories? We'd all be able to easily find and read the most valuable stories. The most valuable writers would be compensated accordingly. We'd be giving them an incentive to continue writing valuable stories.
If most members of Steem allocated all their pennies half-way through the month... then this would mean that the fee could be increased to $2 dollars per month. A larger pie would attract more writers to Steem.... there would be a larger supply of more valuable stories... which would attract more readers. A larger pool of readers would be able to support a greater variety of niche topics. It would be a virtuous cycle.