Summary. Eduardo Porter explores the logic and emotion behind themes of price, value, and worth, in his book The Price of Everything: Solving the Mystery of Why We Pay What We Do. [BUY NOW]
Book Promotion. Perhaps equally intriguing is the creative marketing campaign behind promoting the book. Porter is working with the Leigh Bureau as his agent for public speaking engagements. He has chosen Penguin as his publishing agent. The think-tank creativity agents at SpongeChicago.com have assisted in the promotion of the book by creating a very catching video (below). In their Laboratory for New Thinking, Sponge helps brands find, fulfill, and express their unique identities.
Commentary. This is a commentary by Gregory Johnson about the theme of Porter’s book.
I first learned about The Price of Everything through the impressively crisp and musically rich video created to promote it (see below). I’ve long been fascinated with how our society arrives at determining the price of something. So, inspired by the premise of this book, here are some thoughts about the price of everything.
Everything is Free. The song Everything is Free by Gillian Welch [iTunes] is a folk-style song telling the story of how increasingly things are free that once cost something. Many companies are moving the free line and giving more of their services away for free. This is particularly popular with online providers offering email, photo sharing, video hosting, ebooks, music, email distribution, etc. Rather than giving away the tip of the iceberg and selling everything else, companies are giving away their services to 90% of their customers and the 10% who pay for premium services help fund the entire operation. This is creating a society where many people can have for free the services that meet their basic needs.
Cost and Worth. Gigaom.com offers a very well presented visual report on the cost of an iPhone. The cost of something is essentially the sum of its parts, but the worth of something is often greater. The true value of something is found in how much money and time it can save the one who possesses it. Or, how much money it can create for the possessor. A lawyer can charge $500 per hour because they are saving their client millions of dollars. Sometimes, something is worth a lot not because it saves or makes either time or money, but simply because of how it makes us feel. There are sometimes research and development costs that far exceed the eventual cost to build one mass produced unit. So, all of these factors go into determining the value of something.
Market Value. Another way we arrive at the value of something is by allowing consumers to vote with their purchase decisions on what price is too high. Once the price gets too high, consumer demand diminishes. Of course, for necessary products and services such as food, heat, shelter, and healthcare, consumers will pay whatever it takes. This introduces the possibility for price gouging.
Video. Below is the video produced by SpongeChicago.com for the promotion of The Price of Everything.