The information superhighway might be cynically described as a way to charge more for television, without necessarily improving content quality. But if consumer behavior toward CDs serves as a valid precedent, the “higher quantum level” pricing of the information could reward content rather than access, opening new markets, increasing diversity, and giving consumers more of what they really want. The superhighway might differ from intentions, even if the intention is schlock.
Predictor: Lanier, Jaron
Prediction, in context:In a 1994 essay for Wired magazine, Jaron Lanier, a founder of the virtual reality industry, writes: ”Visions of media technology, such as the metaphorical ‘information superhighway,’ typically oversimplify consumer attitudes toward pricing. Prices are usually framed in terms of how much the consumer is willing to pay for a given service, and it is generally assumed that consumers have a price ceiling for a specific product. There is ample evidence, however, that for information and entertainment goods and services, consumer responses to pricing are anything but simple or linear. Information is a product like no other. The price of information changes the nature of information, and its resulting desirability. One example is the pricing history of the compact disc. Today, more than a decade after their introduction, CDs are cheap to make. Yet their price in real dollars is still a little higher than that of LPs at the time of CDs’ introduction … Why hasn’t competition forced the price of CDs down to reflect the cost of production? One explanation is that the market hasn’t been allowed to function … The higher profit margins of CDs have changed the nature of the product. Higher margins have created a market of growing diversity in which consumers are more likely to get what they want … With the advent of the CD … it became possible to make money on low-volume records … Without any central plan, without anyone predicting it, the higher margins of CDs created a product of greater marketability and diversity … This has import for the information superhighway industry. From a cable operator’s point of view, the information superhighway might be cynically described as a way to charge more for television, without necessarily improving content quality. But if consumer behavior toward CDs serves as a valid precedent, the ‘higher quantum level’ pricing of the information could reward content rather than access, opening new markets, increasing diversity, and giving consumers more of what they really want. The superhighway might differ from intentions, even if the intention is schlock.”
Biography:Jaron Lanier was a pioneer of virtual reality and founder and former CEO of VPL. (Pioneer/Originator.)
Date of prediction: January 1, 1994
Topic of prediction: Economic structures
Subtopic: General
Name of publication: Wired
Title, headline, chapter name: Quantum Pricing for Information
Quote Type: Direct quote
Page number or URL of document at time of study:
http://www.wired.com/wired/archive/2.08/info.pricing_pr.html
This data was logged into the Elon/Pew Predictions Database by: Anderson, Janna Quitney