3.29.2007
Another one!?
Yet another stupid commercial. Why would anyone in their right mind ever buy an iMatt to begin with? How much does one cost anyway? What is its value? What does one even look like? The stupid official iMatt website just has a bunch of screenshots of online stores in image galleries. The website says it costs five dollars, but that seems over priced for something that is quite literally NOTHING. Yet again, I say this whole thing is STUPID.
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4 comments:
What is the cost of an iMatt? Good question. According to Karl Marx, the real value of a commodity is derived from the fact that it was created by human labor. This concept of human labor can easily be translated into time. This is exactly what the iMatt is. The iMatt is time spent exposed to advertisements, i.e. time that is not spent doing other things. In economics this principle is referred to as opportunity cost. For example, when examining the cost of a college education, one must consider not only the nominal fee of hundreds of thousands of dollars, but also the money that is given up that could have been earned by working for those four years. This implies that the true value of the iMatt is derived from the value of the time that Matt spends exposed to advertisements online. Therefore, if his time is highly valuable, if he could earn much more money working at a factory or behind a desk, then an iMatt should cost more, but if he is a semiotics major at a liberal North East college the value should be much less (something like $5)
I like the translation of this argument into economic terms, but the previous analysis makes no sense from the perspective of the firm purchasing an iMatt. In an equilibrium market, the invisible hand guides the price of a good, it’s value, to the point where supply and demand are equal (In other words, to where cost equals value). The previously described model implies something entirely different. According to the ‘invisible hand’ model, the value of the iMatt should be equal to whatever possible revenue the purchasing firm can get from Matt. That means that the relative price of iName commodities (of which there are many) should be determined by their potential to spend (rather than their potential to earn). iName commodities with more wealth should be worth more. This analysis lines up better with current trends which see marketers wanting to pander to “Alpha” consumers who are typically more wealthy and set trends. According to the previously described Marxian model, the cost of an iName product should be determined by the value of that Names productivity. Although I recognize a strong correlation between productivity and wealth, it is important to note that that when talking about large iName groups of a non-working population such as teens (a very large consumer group), there is large disparity. This is not communist Russia; The price of the iMatt ($5) is set by the market.
Our previous respondent has added an important piece to the puzzle, but his (or her) last statement reveals an important conclusion about the success of the iName business model.
The model of supply and demand mentioned only applies to perfectly competitive goods, which need to adhere to a very strict set of criteria.
1.) Free entry and exit to and from the market. Traditionally this property has been determined by the start up costs and relative scarcity of resources. The internet allows for anyone to start selling themselves as an iName product almost instantly, so there is definitely free entry and exit.
2.) Many buyers any sellers. Since profit maximization dictates that corporations should want their advertisements to reach as many eyes as possible, there is a high demand for the good and therefore many buyers in the market. Criteria 1 also tells us there will be many sellers since there are no barriers to entry.
3.) Homogeneity of goods. For a market to be perfectly competitive, all the goods must be the same. The market for chicken or the market for steel is perfectly competitive because from the point of view of the purchaser it doesn’t matter which seller they buy it from; the goods are all the same. From the point of view of the purchasing advertising firm or corporation advertising firms iName products are largely the same. It is true that hey can be broken down into categories based on class, race, region, etc… but within these categories there is no reason to pander to the individual.
4.) Price taker. This leads to the most important conclusion which is that the seller of an iName product is a price taker. Because there are many sellers all making the same good, each individual seller cannot help but charge the same price that everyone else charging. If one seller charges one penny more, he or she will not receive any business because it is cheaper to buy from everybody else. A seller will never charge less because then he or she is not maximizing the profit.
So here is the important conclusion. Because the individual seller of an iName product cannot effect the price of his or her own good, he or she cannot be better off trying to sell his or her time as an iName product and might as well just look at ads like everyone else. Referencing an earlier thread, this is why the iMatt is “stupid”, not because it’s ripping off those delight apple ads. (I like the new ones addressing Vista)
Response: iMatt, iNick, iU, iMe…
Our previous respondent has clearly taken an introductory economics class, but he or she also clearly did not do well in it. Yes those are the accurate criteria for a perfectly competitive good, but your analysis should reveal to you that the iMatt (and indeed all iName products) are actually monopolistically competitive good. What is a monopolistically competitive good? Well before we get to that we should address what a monopoly is. A monopolistic market is the opposite of a perfectly competitive market in every way. It is a market with only one seller, and since there is only one seller, that one seller is not a ‘price taker’; he is a price maker. The monopolist uses scarcity to drive the price of the good higher. So what is a monopolistically competitive market? Well each individual iName seller (of which there are many) views his or herself as having a monopoly over themselves. This is true. This Matt fellow is the sole proprietor of the iMatt. So from his point of view, he should be able to charge more than the market equilibrium price. That’s the monopoly part; here’s the perfectly competitive part. As was pointed out earlier, there are lots of sellers, and lots of little monopolists fighting for some share of demand. You said that this makes it competitive, but I look to your passage about differentiation and an earlier reference to “alpha” consumers to show that they are not. Each of these monopolies retains a little bit of “price power” by differentiating themselves. Some of the later videos introduce an iNick character. An iNick is not the same thing as an iMatt. They represent different sets of preferences and information (see image galleries on official iMatt website for examples). Traditional broadcast media was too broad (for lack of a better word) to recognize the individual differences between consumers and therefore left them powerless. Now that the Internet has made narrowcasting and niche marketing a reality, each viewer should be allowed to charge more for his or her iName. What does this translate to? Think about it this way. Before the consumer was exposed to tons of useless advertising. The male viewer was exposed to tampon ads, and the child ads about cooking supplies. Because the Internet theoretically allows each viewer/user/consumer to be marketed too efficiently, he or she should have to watch less ads (Which is the equivalent of charging more for your time and therefore your iName product).
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