Woot and Scarcity

To my great surprise, I ran into a Woot both at the E3 Convention yesterday.  Woot is the site that sells a supply of one or more items per day, at a fixed low low price, until their stock of that item is gone.   They have succeeded in forming a community, or rather multiple niche communities on the site that provide information and advice about the day’s product.Woot was at E3 exploring the idea of selling digital content through their site.  Jay Johnson, Director of Deals.Woot, said that they had not yet framed up what they wanted to do – physical media versus digital download, long form content versus short form content versus snippets versus image files versus….Woot’s entire ethos is built on the concept of scarcity.  Once their day’s supply of the product is gone, the store is closed although that chat keeps going until the next day’s items are posted.The internet, as a generation of advocacy bloggers will tell you, is based on unlimited supply.  They claim that the Tragedy of the Commons does not exist in the digital world because the original ‘good’ is not impacted by unlimited copying.  (I disagree on their interpretation of what that ‘good’ being enabled in the digital space is, but that is the subject for another blog.)It makes no sense for Woot to get into the digital download business because there is no reason for the sale to end.  The supply is never depleted.  Without depletion, Woot becomes just another store competing with iTunes, Amazon, and the rest.One of the items Woot is offering today is a USB flash drive with a UbiSoft game loaded on it.  Woot should stay in the business of selling digital content on limited edition physical media.  Collectibles, close-out items, warehouse sales, and the like are a solid niche market that will not go away anytime soon.  Even when they can get the content for free, there is always someone willing to pay for the physical media with the picture on it.


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