How Cheap Is Also Confusing

Does it seem that a lot of things, especially things in the geekonomy, are cheap or for that matter free?

I've got books on discount by ordering online.  I can get epic games for my Smartphone for pennies or dollars.  I've got eBooks that are usually cheaper than buying the physical book.  I can save money with a simple Netflix subscription that brings me endless streams of DVDs and endless streaming of shows.

The geekonomy is filled with cheap (and Cheap's unltimate manifestation, Free) . . . for all the expensive entry fees of the technology.

Cheap is something people are understandably interested in.  We like to save money and spend less.  We like to get more for less.  Cheap isn't the only thing we're interested in price-wise, but it is certainly a driver for us.

Cheap is also now easily available thanks to technology, as those of us who are part of the geekonomy know.  In fact, I'd say geekonomic things like Smartphone Apps and eBooks are some of the few things that are radically cheap in today's economy.

Looking for low prices and free stuff is also understandable in the Great Recession.  Times are tough.  Things are expensive.  Money is tight.  We wonder what's valuable and what we need.  We're careful.

But in an age where we have Geekonomically cheap due to technology, and we have people looking for cheap due to a recession, I'm questioning if these two factors make it harder for us to understand what's going on in the economy.  To people like myself, who analyze these trends, and to people who depend on these trends (those doing eBooks, apps, DLC, etc.) it's pretty important we understand sales trends, billability, and more.

Except I really think we're going to have trouble.  We're in a historical recession during a time of historical technical change that makes things cheaper.  Is Cheap a trend or a response to economic troubles, and if (more likely) a combination, what part of "cheap" is response and what part is opportunity?  How does this vary among product types?

Do I have an answer?  Nope, I don't.  If I did, I'd be getting to have dinner with Nouriel Robouni (which would be fun anyway).  I don't.  But I am going to raise this as a warning not only for current projects but for the future – because these two entangled factors will need to be sorted out if we're to understand pricing and trends in the future.

Steven Savage