As analysts try to discern the contours of the Media 2.0 industry (to use Umair Haque's felicitous term), the economy of attention is emerging as a central construct. Often this term is used rather loosely, but it has deep meaning. Many years ago, I first read Michael Goldhaber's seminal writing on The Attention Economy and I have been greatly influenced by it ever since (a version appeared five years earlier in 1992 as an essay entitled "Attention and Software" in Esther Dyson's Release 1.0). I continue to be surprised at how little recognition it receives.
Goldhaber rails at all the hype about "The Information Economy":
Information, however, would be an impossible basis for an economy, for one simple reason: economies are governed by what is scarce, and information, especially on the Net, is not only abundant, but overflowing. We are drowning in the stuff, and yet more and more comes at us daily. That is why terms like "information glut" have become commonplace, after all. . . .
There is something else that moves through the Net, flowing in the opposite direction from information, namely attention. . . . Attention, at least the kind we care about, is an intrinsically scarce resource. . . .
Earlier, I suggested that when information flows one way through the Net, attention has to be flowing the other. Now I want to say that it would be even better to think in terms of attention of some kind flowing both ways.
Consider an ordinary conversation. You could describe it as the exchange of information, but except in a highly technical sense that is rarely a very accurate description of what takes place. A conversation is primarily an exchange of attention. . . what really matters in every conversation is the exchange of attention - an exchange that normally must be kept more or less equal if one party or the other isn't likely to lose interest.
Goldhaber spells out the implications of some of these basic insights:
In a full-fledged attention economy, the goal is simply to get either enough attention or as much as possible . . . getting attention is not a momentary thing; you build on the stock you have every time you get any, and the larger your audience at one time, the larger your potential audience in the future. Thus obtaining attention is obtaining a kind of enduring wealth, a form of wealth that puts you in a preferred position to get anything this new economy offers. . . . since it is hard to get new attention by repeating exactly what you or someone else has done before, this new economy is based on endless originality, or at least attempts at originality. By contrast, the old industrial economy worked on the basis of making interchangeable objects in huge numbers.
Now, I don't accept all of Goldhaber's speculations about the implications of an attention economy. For example, he anticipated that all organizations would become temporary and that money would diminish in importance as a medium of exchange. But his basic insights are profound and pinpoint some of the forces that will reshape the the structure and economics not only of the media business, but business in general, including such fundamental notions as brand (something I will be writing about shortly).
To make money, focus on the areas of the economy where scarcity reigns, rather than abundance. Goldhaber appropriately points out that attention is rapidly becoming the scarce resource in our economy. Of course, it has always been a scarce resource - after all, we each have only 24 hours in the day. But what is changing is relative scarcity - relative to the growing abundance of products, services, content and people vying for our attention and relative to the steady erosion of shelf space and other distribution channel bottlenecks, our attention is becoming a much more scarce resource. It is one of the key reasons that customers are gaining more power in global markets - they own the scarce resource that will ultimately determine who creates value and who destroys value. We are accustomed to analyzing business performance in terms of return on assets but, if one understands the implications of Goldhaber's insight, executives will need to focus on a new form of ROA instead - return on attention. Instead of looking at market share, we will be looking at share of attention (of individual customers) and share of wallet (again, of individual customers).
For some additional commentary on Goldhaber's ideas, see Phil Jones' wiki essay on "The Attention Economy". Clay Shirky also has a provocative essay entitled "Who Are You Paying When You Pay Attention?", although he never explicitly refers to Goldhaber. I mentioned Umair Haque earlier - he has some interesting perspectives on Media 2.0 in two presentations available as PowerPoint files here and here.
John,
I'm about to roll out details of the above at OpportuniTV.com. Would you be interested in reviewing, en route to our doing a little interview, via e-mail, that I can blog?
Thanks kindly for any consideration,
Frank
Posted by: Frank Ruscica | June 06, 2005 at 09:18 AM
The importance of attention has been downplayed because the powerful execs of yesterday and today have no expertise in profitably attracting attention, a la Trump (who was just lucky, not skilled).
But w/ the success of the Apprentice, the genie is out of the bottle.
Now savvy entrepreneurs know that a key source of competitive advantage is being able to market *profitably* through entertainment programming set at the startup.
And networks will all but surely be receptive to these programs, as the networks will be able to extract an equity stake in the startups at a time when the networks' historic biz model is coming undone.
And of course, the savvy startup will leverage the attention to attract a critical mass of participants to its process network :-)
FWIW, here's how my startup is planning to execute the above (from the summary of our biz plan):
From time immemorial to the present day, countless many have worked exceedingly hard -- and, when necessary, dared everything -- to make the institutions of the human community more inclusive and meritocratic.
Building on the efforts of these great spirits, The Opportunity Services Group (OSG) will establish and manage the world's leading 'workflow market' (i.e., process network) for customized education and career services (CECS).
Learning and earning from the market will enable OSG to be the first CECS provider to offer financing for Individual Career Plans (ICPs).
Subsequent learning and earning will allow OSG to steadily decrease the cost of securing an ICP loan, and to steadily increase the amount of loan capital available.
Going forward, then, no company will do more than OSG to democratize educational and economic opportunity as nearly as may be.
Establishing a liquid CECS market starts with creating rewards for people who most quickly provide consumers with good information about CECS suppliers and the payoffs from different CECS curricula.
Creating these rewards starts with establishing a service that transparently coordinates the placement of advertisements on blogs, and that delivers 100% of the net revenues to bloggers and key complementors.
Establishing a transparent blog-ad market that can be run at minimal (marginal) cost -- thereby maximizing bloggers' take-home -- starts with establishing a workflow market that will facilitate bringing together the complementary talents needed to create video content. The video workflow market will also feature:
* an auction-based market to facilitate the insertion of advertisements and product placements into the videos
* an Amazon.com-style affiliate program to facilitate distribution
Attracting a critical mass of complementors to OSG's video workflow market ASAP, and at minimal cost -- or profitably -- starts with securing distribution on network television for a situation comedy set at OSG.
The sitcom will appeal to the TV networks, not least because the CECS industry is exceedingly likely to be the leading creator of good jobs for Americans over the coming decades.
In return for supplying distribution, a TV network can be expected to seek a large ownership stake in OSG.
OSG can minimize the size of this stake by making all of the networks aware of us and our sitcom -- Land of OpportuniTV -- in a way that also makes each network aware that all of the other networks are aware of us.
Programming executives from all of the major networks are affiliated with the 2005 New York Television Festival, which will be held from September 28th through October 3rd.
The deadline for submissions of pilot episodes is August 1st.
By early August at the latest, then, OSG will have created a seller's market for our sitcom/company.
[/excerpt]
Also, just for fun, here's a bit about the sitcom:
Land of OpportuniTV will be set at OSG. The show will center on Frank Ruscica's comic plight as OSG's CEO: like many men, he wants to succeed in his professional life and also be the best boyfriend, and later husband and father, he can. In his case, achieving this balance:
* is complicated by the magnitude of the stakes in the early market for CECS
* will be further complicated by company-affiliated actresses, who will routinely seek to make a very favorable impression on him with their beauty, their charms more generally, and the latest innovations from the burgeoning sciences of enhancing desirability (including tactics derived from the psychologies of attraction and persuasion, as described in, respectively, Fisher’s Why We Love: The Nature and Chemistry of Romantic Love and Cialdini’s Influence: The Psychology of Persuasion)
(Frank's sitcom girlfriend (i.e., the female lead) will have a similar comic plight as a function of her professional life. More generally, then, Land will explore how a couple can manage when both partners are routinely set upon by individuals who utilize state-of-the-science techniques to enhance their desirability.)
Posted by: Frank Ruscica | June 05, 2005 at 02:57 PM