Zero Marginal Cost: We Can’t Give It Away!

zero-margin

The Internet economy is famous—make that infamous—for disrupting just about every business model, product or service out there, with notable examples being free music (Napster), free news (bye-bye newspapers), free porn and not least of all, free software. Think of all the apps and games that let you download them for zilch and then make bank on advertising.

Combined with the evisceration of middle management over the last 10-15 years (along with the asphyxiation of the middle class) as well as profoundly rising rates of productivity…well, kinda makes you wonder if your next gig is going to be Wal-Mart or not. That is, IF you can get in.

Yet we hear everyday about sales of high-end luxury cars—Jags, Lamborghinis, Ferraris—along with super-premium real estate going through the roof as the plutocracy (the reviled 1 percent) gets richer and richer.

So, what does that mean for us in advertising, branding, and marketing? What are we selling, really? And, just as pertinent, what are we buying, or able to buy?

Inflation is when prices rise rapidly to the point that we can’t afford the things we want or need. Deflation is when people stop spending because they have little or no money, and the cost of goods drop lower and lower chasing the bottom of the market.

All Vonstipatz knows is you’d better have either a skill, or a scam, at your disposal. Although it looks like capitalism has lots of life left in it, we have to wonder when out-sourcing everything from widgets to digits (manufacturing to software design) will cannabalize what’s left of our economy, reducing the United States to a place where the glistening suburbs are the new ghetto, and gated communities come with small armies of assault-weapon-toting goons.

A little too bleak for a Monday post? Naaah. The Dow is still well over 16,000, and I’m a stone cold optimist.

How about you?

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