What Can Virtual Goods Teach Us About Paying for News?

My latest post is over at Idea Lab: What Can Virtual Goods Teach Us About Paying for News?

Please share your thoughts over there. Here’s a quick excerpt:

Why will people spend $1 to send you a virtual beer on Facebook, but not to read a news story online?

On the surface, it defies logic. I think most people would agree that whatever economic value news and information has, it’s greater than a virtual piece of clothing, or something that gives your avatar a special power in a gaming environment, or that gives you elevated status on a social network. But in terms of consumers’ actions, the exact opposite is true.

I’ve been thinking a lot about this issue because the market for virtual goods has exploded. People are expected to spend $1.6 billion on virtual goods this year in the U.S. alone. The emergence of this market, I think, is one of the most important business trends on the web. In Silicon Valley, it’s reshaping assumptions about online business models. As the focus on ad-driven models loses favor, the virtual goods market is generating a lot of interest.

Does the rise of the virtual goods economy have any lessons for the business of news and information? I think so, but I’m not sure exactly what they are. And that’s why I’m writing this post….

Read more here…

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