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Title:
Information Rules - a strategic guide to the network economy
Review:
If you think you can apply traditional economics to the new
information economy, then you are ... right. That is the message from the
economist authors of this informative and readable book from Shapiro and Varian.
The book uses a range of products from the network economy
to outline strategies for pricing information goods. These range from the
obvious (introductory pricing, competitive upgrades, basic versus deluxe)
through to more complex strategies such as versioning (producing different
versions of a product for different groups of customers - and charging different
prices accordingly).
The book is full of examples, ranging from HDTV and
railroads through to the computing industry. For me, some of the most
interesting examples come from the content side, and this includes
Encyclopaedia Britannica's move to supplement its hard copy business with
digital delivery.
In fact, there is a lot of overlap in the book between the
very different markets of software, hardware and content, and this can make it
difficult sometimes to apply the rules to the area in which you are interested
(probably "content" if you bought the book after the hype). Also, I'm
not convinced that there really is a direct comparison between these very
different industries. For instance, there is much talk about network economies
and lock-in (with companies using closed standards) which I believe isn't
directly applicable to the information content industry as I would define it.
However, all of the examples are suitably analysed and each
chapter ends with a summary of the rules learned. This is a good way to make
you think about the interesting issues raised.
The book is clearly written, and easy to read with little
jargon. Much of this material you will probably have read something about
elsewhere (first mover advantage, network effects and externalities, economies
of scale, etc.) but it is nice to have it clearly summarised in one place.
This is not, however, a "How to make money by selling
information on the Internet" book for Net entrepreneurs. Also, it may not
contain much new material for those who already work in the industries covered.
However, even though it may tell you some things you already know, it is well
worth a read for bringing it all together and getting you thinking about the
important issues raised.
Free Pint Reviewer:
William Hann is Managing Editor of
Free Pint and Managing Director of the
Internet consultancy Willco Limited.
Readers Comments:
"I have read this book and gave a review at
http://www.analyticalQ.com/books/information.htm. It is an excellent reference." Anne Ku
The average customer rating at Amazon for this
book is 4 out of 5, from 20 reviews.
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- What did you think?
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