Is the Scarcity Model Outdated?

In the old days (pre-television), newspapers and magazines ran on the scarcity model. You would buy a newspaper because you couldn't get the information any other way. Entertainment was based on the scarcity model when movies were invented. You went to the theater for your entertainment, and they had a monopoly on film stars creating your entertainment pleasure.

The heyday of print cartoons began in the 1930's and now they are slowly dying as the traditional newspapers drop off the face of the earth. In those days, the cartoons actually sold the newspapers, because people followed the adventures of Buck Rogers, or Terry and the Pirates.

Along came television, and it started the revolution to change the scarcity model to that of the advertising model. After a few years, television programming was made as a vehicle for advertising. Large corporations sponsored game shows, soap operas and variety shows as a vehicle to sell their product. The content of the shows was given away for free, but you had to take the advertisement that came with it.

With the development of the internet, the model of scarcity was further obviated. The content was free, and the revenue model was based on advertising surrounding the content. This is still not the case for movies and songs -- the ultimate products in the content scarcity model. This leads me to wonder two things:

1) Is the scarcity model a better generator of money than the advertising model?

2) Which model makes more money?

If you ask Google, their entire model is based on advertising with free content. And they make billions. But is that the way to go for the small company? Somehow, I do not think so.

The whole question requires further research. Comments are invited.

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