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Information wants to be expensive

Thomas Scovell, Director of Strategy at Byte on how NFTs show the way for giving virtual goods real value.

Thomas Scovell, Byte

Director of Strategy

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You’d be forgiven for thinking I’d misquoted a classic, but the famed expression, “information wants to be free” is actually from a longer quote that begins with the contrary point-of-view.

Whichever side you take, you can probably agree there’s some awfully expensive information bouncing around online right now specifically non-fungible tokens (NFTs), often used to sell limited edition (digital) art for millions of (real) dollars. 

What’s particularly interesting about NFTs, newly minted wealth aside, is not their impact on the art world but what they point to in resolving a wider tension that’s plagued digital culture since the information phrase was coined.

“Information wants to be free” has been a catch cry of those at the forefront of digital culture for decades, and the bane of copyright holders. It’s a seemingly unresolvable tension that the ‘free’ proponents have been winning as we’ve moved from pay-per-view to streaming, reading the news for free, and all the other benefits of an app-led, ad-funded digital life.

The rise of virtual value

We could attribute it purely to pent-up lockdown savings and cabin fever, but the past decade of digitalisation of life has set us up for this NFT goldrush. Gen Z are the visible vanguard, with their penchant for the non-binary blurring the lines between ‘in real life’ (IRL) and ‘online’ to the point where they’ll as happily buy virtual outfits for their avatars and filters to enhance their real-life self/ies as they will physical goods and services.

IRL and Digital have merged to create Augmented Real Lives (ARL).

And thanks to COVID we’re all generation-Zoom, if not Zoomers, and are seeing more value in digital goods and services than ever before. Which, if that’s what you’re selling as a brand, is great news. But at the end of the day most brands, from their product to their supply chain and marketing tactics, are wed to some sense of physicality.

NFTs arrive on horseback, like a digital rendition of Napoleon crossing the Alps, to resolve these tensions. Should information be expensive, or cheap? Should it be accessible to everyone, or freely available? Can something be infinitely copied and yet owned and valued?

NFTs say “these don’t have to be contradictory”, or binary, as Gen Z will be relieved to hear.

On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time.

Stewart Brand (1984)

Having our virtual cake, and eating it too

Most importantly, with NFTs we can hoard our cake, share it with others, and eat it too. Take Byte and Dept’s recent experiment in digitising company merch. We created an AR puffer jacket for anyone to ‘try on’ on Snapchat and allowed a limited number to buy it as an NFT, able to wear it where and how they liked.

The biggest shift NFTs deliver is not in the tech per se, which is currently a messy hash of blockchain and crypto that has more competing variants than COVID-19, but in consumer mindsets.

It’s crystalised a decade’s worth of digital experiences into the belief that virtual goods have value worth trading time and money for.

And that this trading doesn’t just need to happen between brand and consumer but can do so between consumers themselves, giving life and added value beyond the original. In essence, goods can become memes. And branded goods can become virtual while maintaining real value.

Exactly what this means on a category-by-category basis is what brand owners should be exploring now while the technology is nascent, but consumers are keen.

From curiosity to commodity

We’re at an inflection point; digital representations of physical objects are transitioning from curiosity. And marketing for their ‘real’ equivalents are becoming product-lines in their own right.

By all means, create an AR shoe to promote its real-world equivalent right now, but consider long term plans and implications. At some point giving them away is going to have a discounting effect on price elasticity as virtual goods in a certain category become mass market. Today’s curiosity is tomorrow’s commodity.

Those familiar with spirits marketing will know of ‘global travel retail’, an aggregate of worldwide airports that is treated as a separate market from the countries in which they reside and is invariably one of a brand’s top markets.

It’s reason for its existence is shared with virtual communities, people inhabiting the non-place of airports share mindsets and behaviours that the same inhabitants do not exhibit when elsewhere.

Thinking markets, not channels

Given this, it is best to consider virtual spaces and goods not as channels as one might think of digital platforms, but as markets like virtual countries, or at least communities.

Which means the approach to understanding them isn’t how one looks at a media, but how one looks at groups of like-minded, shared-behaviour individuals.

Digital art aficionados, virtual clothes and shoe collectors, metaverse world builders, game avatar crafters; they all need to be understood through a digital ethnography that understands their passion and the role it plays in their, augmented, real lives.

Think of a brand’s role in lives that aren’t lived offline, or online, but for many are blurring the lines and all the new needs for goods and services this creates. This isn't just an opportunity to transition into virtual worlds, but to expand.

And remember it’s about people, not technology. Or, as author Cory Doctorow said in his book of the same name, “information doesn’t want to be free...people do”.

Guest Author

Thomas Scovell, Byte

Director of Strategy,

About

Thomas Scovell is Director of Strategy at Byte who has been helping brands sell virtual goods for real money, and selling real goods in virtual spaces, since the first dot com boom.

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