Episode 1 of Social Media Business: What is “the experience economy” – is it the next step on from agrarian, commodity, service…? How does value – and therefore money, currency – shift when people are more willing to pay for intangible experiences than physical goods? Can we monetize something in our minds? The first episode of my new podcast, Social Media Business, looks at revenue stream associated with providing your online community or social networks with a real world experience such as a meetup, conference or party.
The Experiential Economy
The experiential economy is something I know will be hugely important as we move out of the service economy. Experiences, intangibles such as social relationships and augmented play, will become the baseline by which we judge all business interactions.
The first episode in this series is on the Experiential Economy – the shift from commodities and service to selling experiences. In particular, how some of the large social networks are making money from real world conferences and get-togethers.
In my presentation to APRA (Australian Performance Rights Association) a couple of years ago, I explained PASSIVE becomes ACTIVE, CONTENT becomes LOSS LEADER, PROMOTION is everything and EXPERIENCE beats CONTENT.
Remember Album tours? In the previous economy, tours (experiences) were loss leaders to bring in the real bonanza, album sales. That doesn’t happen anymore. You can buy all of Sting’s music – both as a solo performer and his work with Police – for under a hundred bucks online, but a ticket to a concert? That will cost you an arm and a leg. Experiences sell, content doesn’t. We had better get used to offering more than a service value add, but an experience value add. A story, a unique proposition that explains not what we do but who we are – our stance on recycling, carbon credits and so forth.
Joseph Pine has an amazing Ted Talks video that explains the Experience Economy really well:
Some stuff sounds like “yeah we know about authentic experiences already” but the talk was from 2004. As we document human thought with cloud based video and blogs, old presentations mask the fact that time-contextually, they were very forward thinking.
If you want something newer, this Rory Sutherland very funny talk was released today:
Advertising adds value to a product by changing our perception, rather than the product itself. Rory Sutherland makes the daring assertion that a change in perceived value can be just as satisfying as what we consider “real” value — and his conclusion has interesting consequences for how we look at life.
“what we in create in advertising is intangible value… a very, very, very fine substitute for using up labour or limited resources… intangible value to replace actual or material value…” AND all value is perceived value.
Social Media and Experience
Values are changing – there is a reason why people will buy digital goods, pixel virtual gifts like Facebook birthday cakes and items in virtual worlds like Second Life. It’s because no object has a tangible value outside of it’s contextual life, it’s community links. Even coins have no inherent value:
… one day you throw $2.00 to a busker. It was worthless to you, jingling in your pocket annoying you so you gave it away. The next day, you are parking the car, looking for a coin and you offer a passerby $5.00 note for a $2.00 coin. Suddenly that $2.00 coin has increased in value markedly.
I believe any business that can deliver an experience will ultimately have more of a value add (experience, not service) than those that do not. I spoke about that at length at the Events and Conference Masterclass last week, speaking about online communities, social media and conference organisers.
So, if you are here for the podcast information (there’s more on monetizing social media on this post) ….
… here are the links that I mentioned in the Social Media Business Podcast:
Well that is the initial focus but it’s also – of course, knowing me! – about building online communities. The show is called Social Media Business and is available as both audio to listen here on the blog
… as well as the usual formats from the usual sites such as YouTube.