Post-Mass-Marketing and the Metaphysics of Presence

It's now cliche to assert that mass media business models are dead. It's no longer hard to either make or distribute media products. Markets are awash with digital product, which people expect for free. Artists today have to apply their creativity to other ways of producing unique value that people will buy.

At Sceneverse, where I work, we are becoming huge fans of the band One-Eyed Doll (Wikipedia), not just for their music, but for the whole way they create a scene around themselves that keeps them in touch with their fans and economically viable.

They sell what's rare.

For digital music files which have become hard to price, they sell album downloads on a pay-what-you-want basis. But if you buy an "appreciation package" involving a physical CD from them, you do so secure in the knowledge that each one is individually signed and bitten by the band's lead singer and guitarist, Kimberly Freeman. We bought some, and you can see the bite marks. They also sell buttons and baubles and stuff that fall off her costumes during their performances, (she is insanely energetic). They sell paintings of band members, thank-you notes handwritten by the duo, personalized thank-you videos, and other artisan products (understanding that these are FUN pomo-goth-slasher-freak-tregan-playing-hard-touring artisans). Items are priced by the degree of personalized attention the duo pour into them for the specific fan.

The bitten CDs and costume detritus put me in mind of Derrida (that's how much of a nerd I am). These are traces - marks of clawbacks - taking the product out of abstraction and connecting it to the material, physical person of the artist again. You could say it reminds us that artists are real people who need to survive, but it is too easy to be blithe about this market shift when you frame it that way. It's also a good example of Mike Masnick CwF + RtB = $$$ formula, but I want to resist formulation for a moment, to appreciate the deeper dynamics that make the formula work here.

In the value universe hypothesis proposed (and further developed) by economist and fellow Sceneversian Greg Rader, the bite marks on the CD "rehabilitate" it, in the following sense. A CD hovers perilously between economic quadrants in Rader's model.

- Is the CD a political-economy good? (A bearer of legally-enforceable intellectual property?)
- Is it a transactional/commodity good? (A "thing" you might find in a bin or rack for $10?)
- Is it an attention-economy good? (A heavily managed "star" product from a "fame" industry?)
- Is it a relational-economy good? (A way of personally thanking Kimberly and Junior for their art, and their dedication to making kick-buns experiences for us?)

The bite marks add flesh to how you consider this item. It's a trace of the non-metaphysical, which claws the product over much more in the direction of the relational economy than most CDs are - even autographed ones. (Music. Reloaded. This time, it's personal.) One-Eyed Doll are masterful relational marketers. Their offering actually covers all four Raderian value quadrants, but they strongly downplay their legal right to extract a price (obscure its legibility), and pump up the personal touch. They walk the incredibly delicate tightrope between offering relational, attentional and transactional goods with Venti integrity and a big invigorating shot of sheer camp.

Kimberly is certainly a persona. The real person that she is exceeds what we as remote fans can know about her, but she makes her presence known with a very physical trace of a moment - a moment when she considered us in particular, even if abstractly. The broken bits of her costumes are traces of the ferocity of her performances, of the activity pattern in life that she is. These traces themselves are not metaphysical. They are not pure hype or simply symbolic. Each one costs her some of her own life's focus.

One cannot escape metaphysics - these artists are replacing commodity fetishism (mass-producible, like the Coca-Cola brand marks) with relational fetishism. In (what might seem to be) less metaphysical terms, a materials engineer looking at the bite marks using an electron tunnelling microscope might just give a molecular description of the indentations in the material lattice of the substrate, and not care what made the marks. We imbue them with presence, with the subjectivity, agency, intention and affect of an author. We make them hosts in a communion with their source as we imagine her.

But that willingness to read presence into a trace (that if anything should alert us to absence and presence simultaneously) - that craving for presence that Derrida messes with and frustrates in his writings... that is a great marketing driver! If that hunger for presence drives all of Western civilization, and has since antiquity, that's a damn strong market trend to ride! It's a very smart way to start thinking about a business model.

One-Eyed Doll have their way of doing it, but other independent musicians are also - of sheer necessity - feeling their way around the new economics of culture, and doing more and more things to build up high-relational-value offerings that they can authentically and with integrity exchange in ways their fans are willing to pay for. This new music industry may not enjoy the same economies of scale that the old attentional economy of mass-market pop stars did, but it will be delightfully weird.

Integrity is key to this. This return of artisanal economics in the music industry is an example of the "new spirit of capitalism", where capitalism goes to the edge of the market, to things that exceed the rationalized production of industrialism, to mine authenticity and to return with products that bear its stamp. Not every indie rock group could offer the kind of value One-Eyed Doll does, and if they did, One-Eyed Doll would have to think of new stuff, to stand out from the crowd. One-Eyed Doll both is goth-y and makes fun of it, and they make fun of the vampire craze in pop culture. Bitten CDs take their meaning in the context of the whole conversational culture they create with their fans around that experiential stance.

Marketing in the way One-Eyed Doll does means cultivating weirdness, and being very clear about the weirdness you offer. That is the business you are in.

There is something you offer that your fans connect with. There is a distinctive communion, outside the easily-explained, outside the generic comparisons people may make between you and every other musical act out there. That is your product. It's probably something you can't quite put into words - something that may be the mojo in your music, or maybe the way you address the mix of dedicated fans and first-time listeners who turn up at your shows, the way you make great evening for them, or the comic perspective on the world you embody... maybe it is in the imaginary world or alternate reality your music creates for listeners who "get" your music... the kind of pain you give expression to for people, the masterful way you faithfully deliver on the awesomeness of a genre, the surprises and new sounds your technical skills let you produce... something that can't be churned out in a factory is the real thing you have to offer people.

If you connect your weird relational goods to that unique and authentic source of weird value, it is starting to look like you can build a business as a musician again. Communications technologies give you the relational reach to connect with your fans in these ways. In this new post-megastar economy, you may not be able to buy a castle in Scotland (at least not a big one in good repair). But you may actually be able to make your living managing your band, your brand, and your time, centered around the activity you most want to do.

There are definitely worse ways to spend your mortal moments.

Types of Costs

(This is a total idea dump for my own future reference. I'm not sure if anyone else would get any mileage from it.)

Joel Dean was a pioneering figure in the field of managerial economics. His 1951 textbook of that title was important in establishing the field. One of the things he wrote there that still rivets my attention is the beginnings of something - the beginnings of a schema for understanding costs. Basically, he noted a whole series of what you might call "opponent" costs:

Opportunity costs - Outlay costs
Past costs - Future costs
Short run costs - Long run costs
Variable costs - Constant costs
Traceable costs - Common costs
Out of pocket costs - Book costs
Incremental costs - Sunk costs
Escapable costs - Unavoidable costs
Controllable costs - Non-controllable costs
Replacement costs - Historical costs

This strikes me as one very, very important and promising unfinished idea. I see the shadow of a future theory of costs in this initial collection of observations. It makes me want to continue the list. Going to Wikipedia for cost concepts offers the following additional ideas:

Private (internal, transactional) costs - external costs (externalities)
Social costs (internal and external costs) - Psychic costs (stress, worry, anxiety, uncertainty, fear - adding "repugnancy" costs in this category? e.g. the repugnancy of a market for human kidneys)

In business, retail, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore. In economics, a cost is an alternative that is given up as a result of a decision.

The page then notes that cost of a business input ("intermediate consumption" in national accounting for GDP) includes its production costs, plus the markup for the producer's profit, plus transaction costs. Also mentioned are a couple of dimensions along which costs might be categorized:

Costs are often further described based on their timing or their applicability.

It is mentioned that biological costs (or the metabolic price of something like a big brain) are "a measure of the increased energy metabolism that is required to achieve a function." Then there are reproductive costs - life-history & somatic/reproductive tradeoffs - a whole other topic... perhaps related to information costs (the signalling and screening games that play out in asymmetrical markets are a lot like those that play out in sexual selection - Akerloff, Spence and Stigliz).

Is there a noise function in cost theory? Is the process of a diminishing marginal return analogous or commensurate with the increase of noise in a communications channel?

These are really half-formed, messy impulses and desires to learn. They may be very clear to people schooled in economics, perhaps behind some math I can't parse. But I have yet to find a non-mathematical general conceptualization of cost that systematizes all of the observations in this field. In the very little bit of game theory I've done, different games impose different configurations of costs or types of cost on players... I feel like the topic is still foggy, in my own mind certainly.

When you Hate the Job you Always Wanted

Okay, I finally found that article I was looking for in the first ever post to this blog. It's Effort for Payment: A Tale of Two Markets by James Heyman and Dan Ariely, in Psychological Science Volume 15—Number 11: 787-793. They wanted to see how compensation effected the effort people put into a task. Standard economic wisdom suggests that they more you pay them, the better they will perform. This is not borne out empirically. In their words:

A long history of research has demonstrated that rewards can decrease motivation and attitudes (Festinger & Carlsmith, 1959), alter self-perception (Bem, 1965), increase overjustification (Lepper et al., 1973), and turn feelings of competence into feelings of being controlled (Deci & Ryan, 1985). The debate over these findings (Eisenberger & Cameron, 1996; Ryan & Deci, 2000) has generally shifted to the question of what specific circumstances give rise to these counterintuitive effects.

Their proposal is that there are two kinds of markets: monetary markets and social markets. Different kinds of goods and services may be associated with each market, but more to the point, the form of compensation offered differs as well. When you offer to pay someone, you signal that you want to situate the transaction in the economic modality. If you offer to pay friends for helping you move apartments, they may get royally and truly offended! However, stocking your new fridge full of beer and ordering in pizzas will be gladly accepted - unless you mention the price! If you do that, you are trying to put a money-value on the asset of having friends who will help you. You will, in a sense, be rejecting them from the social market, driven by reciprocal altruism, esteem, social standing/reputation, social network position, and all the rest.

They continue:

[This h]ypothesis...1 also predicts a distinction between exchanges in which payment is not mentioned (‘‘not paying at all’’) and those in which individuals are told explicitly that they will not be paid (‘‘paying nothing’’). Whereas not mentioning payment is likely to cause individuals to consider themselves to be in a social-market relationship, telling individuals explicitly that they are not getting paid is likely to cause them to consider themselves to be in a money-market relationship. Our framework predicts that not paying at all in the context of social market relationships can create higher levels of incentives than low levels of compensation in the context of money-market relationships, a prediction that is shared by many other accounts (Bem, 1965; Deci, Koestner, & Ryan, 1999; Festinger, 1957; Gneezy & Rustichini, 2000b; Lepper, Greene, & Nisbett, 1973).

This means, they point out, that "Effort in exchange for no payment can be higher than effort in exchange for low monetary payment." Strictly economic rationality would not predict this, but strictly economic rationality has been slow to pick up on the impact of social exchange behavior on economic exchange behavior. I remember when I was in Fiji for awhile, and in some of the marketplaces where native Fijian businesses were predominant, there were signs all over the place telling vendors not to sell good on verbal credit! (I.e., a vague promise to repay the vendor later, somehow.) In the traditional Fijian village economy, the social exchange market dominates material exchange, and so a lot of the culture gives expression to social exchange values. In a modern cash economy, however, people had to learn to insist that business be business, and that payment be made.

I think some of us are biologically more sensitive to different kinds of signals of gain or loss. I for one basically don't notice money, don't think of it, would rather not think of it, etc. I care what my salary is, but mainly as an indicator of social status, and of how valuable my employer considers me as a resource. I love doing a good job, though. I love the recognition that comes from it, but I would far rather professionalize my work. I prefer to make my salary a background indicator of my social standing and status, and to then ignore it. When I do good work, I want it to be for intrinsic reasons - because I value good work, and because I have a will to constantly improve things, etc. I want to present my work to others, to discuss it with them, to gain recognition and to thereby gain social sanction to continue my apparently valuable work. However, getting paid for every product I deliver is profoundly de-motivating. I'd almost rather not work at all.

Weird but true.

When Pay Ruins Everything

Virgin post... what a feeling of freedom, and irrelevance! Do the two go together, I wonder? Are the relevant always burdened?

Blogging is great! I don't know why I didn't think of this before. You see, I suffer from an illness. You might have it too! Basically, my problem is my attitude towards work. My work is important to me. I like working and I like producing good output. I want to exercise my talents, and I have various kinds of writing contracts on the go that let me do just that. Those projects are actually really quite interesting - producing texts and documents that seem like fun to put together.

However...

As soon as I do this thing I enjoy (writing) for money, the project takes on all the appeal of calculating my income taxes. I just can't get motivated to do it! Rather than doing that writing task I have agreed to do for money, I goof off, doing other writing tasks (like blogging) that I feel more like doing, just for fun.

Getting paid for something you love can totally ruin the experience.

I am vaguely aware that there are many ways of understanding this phenomenon. Many different investigators believe that humans have more than one motivational system, and these systems may compete in various ways.

One of these distinctions is prominent in social exchange theory (SEC). SEC distinguishes between social exchange and economic exchange. Social exchanges ares based on trust, mutual aid, the joint production of public goods, social networking and social standing. Economic exchanges are based on contracts and on the profit principle. It may be the case that some of us are much more plugged in to the social motivational system than the economic one. Sexual selection may have had a role in shaping that social motivational system, making it more developed than it might otherwise have become... Googling "social exchange theory" opens the door to this little world.

Other people define two motivational systems differently, e.g. a "hot" (emotional) and "cool" (instrumental/rational) system, or an "approach" system and a "withdraw" system. People for whom money ruins the pleasures of work may be more hot/approach types, rather than cool/withdraw types. We may have an insufficient fear of poverty, perhaps. Or perhaps the systems overlap each other differently - we don't get hot for instrumental gains, but rather for social status and networking gains, or something.

Of course, a venerable distinction in the world of motivational studies is the intrinsic/extrinsic distinction. Some of us may be so strong on the intrinsic motivation (e.g. high task-involvement and high control over our work) that extrinsic incentives actually ruin our motivation. In that case, managing people like us would involve surrounding us with the type of work we want to do anyway (which happens to be what our employers also want), and giving us enough money to feel important and respected (but not have that money connected to any specific task or project). Salary would be better than piecework, perhaps, for workers like us. Then we would need a social environment where we could distinguish ourselves, winning all of those social rewards (prominence, eminence, status, respect... etc.) which are the real things that motivate us...

This is exactly how the university system works, come to think of it! (Also possibly the entire country of France.)

It would be interesting to try to design or imagine a university-like company. Genetech apparently works this way: Employees don't get assignments, they get "appointments." ...Genentech awards sabbaticals to stave off burnout. To keep creativity alive, both it and Google encourage their scientists and engineers to spend fully 20% of each workweek pursuing pet projects.

Of course, blogging is pursuing a pet project, but for now I pursue it under the cloud of guilt. The shame, the shame...

I guess it's time to get back to work.