The Price of Pixels: The Inflationary Devaluation of Digital Media & The Rise of Fixed Supply Social Media Platforms
Introduction
Inflation, Purchasing Power, & The Economy
Inflation is a trending topic in today’s conversations, you can find headlines on it in almost any mainstream media outlet. However, what is inflation? Let’s define it…
Inflation: “Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. Long-lasting episodes of high inflation are often the result of lax monetary policy. If the money supply grows too big relative to the size of an economy, the unit value of the currency diminishes; in other words, its purchasing power falls and prices rise.” — IMF
Now that we have a working definition of inflation and how that translates into the economy, we will embed that framework into the following theory.
Digital Content Proliferation
As a technologically advanced civilization, we are actively trying to keep up with Moore’s law which simply states that computational progress will become significantly faster, smaller, and more efficient over time. We’ve witnessed the evolution of personal computational devices within the last 20 years. With it, has come the consolidation of much of the devices that were once needed to produce the same type of media pieces — films, podcasts, music, videos, photos, text, Graphics, etc. Everything needed to be a fully functional media production powerhouse that is fully self-reliant. Because of this, the proliferation of online media has been vastly expanded, a few numbers we can take for this example, are as follows (source)
Instagram users uploaded 95 million photos per day over the year. (e-Learning Infographics, 2020)
Stored data grows 5x faster than the world economy. (Dihuni, 2020)
404,444 users streamed on Netflix every minute.
Tracks added to the Spotify music library were the least: only 28 tracks per minute.
People sent 500 million tweets daily. (TechJury, 2020)
300 hours of video were uploaded on YouTube per minute. (e-Learning Infographics, 2020)
A connected car produced 4 TB of data in one day. (Raconteur, 2020)
3,026,626 emails are sent every second. (Internet Live Stats, 2021)
463 ZB of data will be created every day by 2025. (Raconteur, 2020)
To put those numbers in perspective, these are numbers from the year 2020 all before the advent of Generative AI which exploded from 2022 to 2023. The amount of media generated every single day is astronomical. But how does this affect the value of each independent piece of media generated?
The Devaluation of Digital Content
Going back to our inflation framework stated earlier in this article, “If the money supply grows too big relative to the size of an economy, the unit value of the currency diminishes; in other words, its purchasing power falls and prices rise.” — IMF . The main focus point we can extract from this framework is the following : as supply grows too big, the unit value of the object diminishes.
Why is this relevant?
With each additional media contribution to the supply of internet content, so comes the devaluation of the intrinsic value of every other media content that also exists on the internet. Every new piece of content generated on a given day is not just competing for attention from other media generated the same day, it’s also competing with every other piece of content generated before that day, which still exists on the internet. It used to be that a creator could get by posting once or twice a day on one or two different platforms and see some semblance of growth. It’s become easier than ever to output seemingly high quality but low value content which has led to an inflationary nature of relevancy in the digital real estate landscape. What used to take only a few pieces of content to maintain daily relevancy, now takes anywhere from 5–10 pieces & presence on multiple platforms. We’re talking about generating anywhere from 15–30 pieces of content taking into account various social media platforms. Then we can account for the different forms of media that need to be distributed — copy, email, image, video, UGC etc…
But, does this hamster wheel ever end? Has anyone stopped to question this?
Assuming this trend continues, what does the trajectory look like in the future? Will it take 20 pieces of content spread across different platforms to maintain the same level of relevancy?
Well if we take a look at a currency facing a purchasing power crisis — a product that previously cost let’s say $10, due to the supply expansion, that same product could double or triple in price — obviously taking into consideration the rate at which the money supply is continuing to expand.
I believe it’s worth noting that we can look at digital media in a similar manner…
In that we can look at the rate at which digital media supply expands on a daily basis — which is increasing at a rate far more significant than, say for example, the money supply — against the rate at which attention can be meaningfully captured for a given piece of content. Then we could assume the following,
That as time moves forward & the volume of digital media produced not only expands at the same rate, but at an increased rate of daily production, it will cost more in daily content volume in order to capture the same amount of attention.
Attention Economy & its Impact
The facts are that we live in an extreme attention economy, where attention and capturing attention is the reward incentive for organizations. Who can get what they have to offer in front of the most eyeballs, and have those eyeballs convert to engagement. We’ve moved from 30 second TV commercial ads, to 7 second video shorts, but really what matters is the first 2 seconds, and beyond that, is video thumbnails that need to hook the audience even before getting to any of the actual media. Advertisers & marketers have had to adapt to this by playing into the content game if they want to keep up in the marketplace. Everything is meant to grab attention.
Implications for Creators & Industries
One of the largest implications I see for this, is that real valuable, high quality media projects which took a large sum of time & capital to create, are being drowned out by the sheer volume of other media which is also being generated. Because of this, taking cost & profit margins of production as being a significant factor — the volume required to maintain relevance against the wave of content produced daily, will demand greater output volume at cheaper costs. Hence the rise of Generative AI content. Yet, that still — in my belief, does not provide a viable long term solution to preserve the value of digital content, as Generative AI will only exacerbate the proliferation of digital media supply in circulation on the internet. Being that we can now, even more so than years prior — produce higher volumes of content at a cheaper price, the same problem will persist. In that each piece of digital media produced, devalues every other piece of media content — in relation to capturing online attention.
Addressing The Issue
The Central Banking of Social Media
One major issue with the over supply of digital content, is that unlike the fiat monetary system, there is no centralizing force to hike interest rates when the supply of digital media becomes over extended. It would be like the equivalent of the FED setting interest rates to 0% and then losing the ability to implement rate hikes to slow monetary/credit expansion. Don’t take this statement as my profession for central bank advocacy — I hold quite opposite views on that subject, but that’s another conversation. The main point being, that I don’t see this as a talking point quite yet and perhaps won’t be relevant for a while. However, I do believe that it will become a problem in the future.
I think people & organizations will have to question if they are prepared to take on the challenge of outputting massive amounts of digital media volume in order to maintain and grow their positions of digital presence… or is there a better way?
Call to Action
Fixed Supply Social Media Platforms — I believe that in the future, we’ll see the rise of Fixed Supply Social Media Platforms. We saw something like this with the concept of the App BeReal — where users were asked to post once a day at a random time, & only once the app notified them to post. I think that social media platforms will reach a moment where they decide to limit the amount of volume being posted to their platforms & I would be curious to see how this would affect how we come to see digital content. If for example Instagram, Twitter, or Tik Tok limited posts to 1 post a day, instead of infinite posts — the value of that 1 post and the extent of which it would demand that capturing audience attention be curated more intentionally, would by default increase dramatically. I think this would force creators and organizations to curate their content more carefully and place more value into the content of what is being generated for the day.
In conclusion, this is only a theoretical hypothesis based around general sentiments and trends. Posing a question to you as the reader. Something to think about. Until next time. Adieu…