On selling

Selling is exchanging something---anything---for money. Now, there's not much point in selling something that nobody cares to buy. And, from the consumer's ("buyer") point of view, there's absolutely no point in buying something that you either don't want, or if you do want it, that you can make it yourself. In other words, for that exchange to take place, there must be "something in it" for the seller, as well as for the buyer.

This model has stood the test of time: it is as old as business itself. Underlying it, is a fundamental assumption: that after some good has been exchanged for some amount of money, just as the buyer is no longer in possession of that amount of money, the seller is no longer in possession of the good that has been sold. This works well specially when what's being sold either can't be copied, or when doing so would have a higher cost to the buyer than the seller's price. But what happens when what's being sold is something as ethereal as, say, information?

Information might be ethereal, but we, humans, are not. Therefore, with the possible exception of when we're thinking about it, we have to bind information to some material support. Before digital technology, that binding use to be definitive: once you've printed a book, you cannot use the same ink and paper to print a different book. But when someone sells a book, he's not selling just the material support, or just the information on it---he's selling the whole bundle. And while it's true that to the buyer of a book, the information is more valuable than the support it exists on, it is not less true that information without some kind of support is largely useless. Except for the lottery numbers, or the code to arm a nuclear warhead, nobody buys information without some physical support (just imagine what it would be like to sell the contents of The Da Vinci Code, in its platonic ethereal form---a true Mission Impossible). And for this reason, there is not much point in selling information, per se. Or is there?

Enter digital technology, and some years later, the internet. Of the many changes, good and bad, that these two advances in technology brought to society, the one that is clear beyond the shadow of a doubt, is that information is no longer bound to some material support, and irreversibly so. We still need some form of support to interact with information, viz. screens and keyboards, etc. but we no longer have to transmit the support in order to transmit the information. Furthermore, when we say transmit, we actually mean copy: after I send something to you, we both have it. Now it is paramount to understand the magnitude and the implications of such a change. If before the internet age selling a book (or a newspaper) could be considered a way to transmit information (and to fund the work needed to compile and organize that information), afterwords, selling information is, at best, a one time deal. Because that first buyer can then spread that information world wide, with essentially no effort or additional cost. Obviously, that would have been impossible before the internet age. This poses an enormous challenge to the enterprises that base their business models on distributing information when it was permanently bound to some material medium---paper, plastic slabs, magnetic tape, or whatever else. But it does not change the fact it makes no sense to sell information in and on itself. Also note that after that first sale, both the seller and the buyer are now in possession of the information that was sold.

To explain this from another angle: what justifies that first sale is that the information has value to the buyer, and that's why he pays for it to the seller. I.e. he pays for the work needed to produce that information. But nobody will pay the seller for the distribution of copies the information he produced, because the internet has removed all economic value from the process of distribution (because now anyone can do it, hence nobody is going to pay for it). This has always been the case with mathematics and physics: as any book written about those subjects (no matter how valuable to science) is unlikely to become a best seller, funding could not come from distribution. Given that now distribution brings ever more dwindling revenues, such a scenario will become more widespread.

But we're going astray. My contention here is that you cannot sell information in and on itself. And that is not because information is somehow special: you cannot sell anything that the buyer can easily do or copy himself, because, well, he's going to do or copy it himself. There's no added value. In the case of information, there is (a lot) of added value in producing it, and so people will pay for it (yours truly here included), but there is absolutely no value in retail selling it, for the reasons set forth above.