j1m0ne’s blog

When I first started this blog about 6 months ago I admittedly had no clue what I wanted to write about - the anime blogging world was already filled to the brim and I couldn’t really think of what I could do to differentiate mine from any of the other kazillion ones out there. I didn’t want to blog about specific anime episodes cos that’s wat 90% of other people do, I didn’t like the idea of keeping a ‘news’ blog either - too much pressure on trying to keep up with the latest stuff (I’m a my-pace kinda person). In a quandary, I just decided to give it a go anyway & make up crap as I went along. Which is why I decided on the URL ‘atemonai’ (あてもない - random, aimless) which I pinched from a Kaguyahime song title (It’s supposed to be あてもないけど, but I cut out the kedo cos it was getting too long).

The following post is split into two parts to prevent brain freeze and contains a fair amount of economic jargon. So if you’re not comfortable with that STOP READING RIGHT NOW! If you have a short attention span STOP READING RIGHT NOW!

Still here? OK, I’ll try to explain all the terms used as simply as I can, but tbh you don’t have to be a rocket scientist to understand economics. Hang on, rocket scientists don’t understand economics. That’s why they’re rocket scientists and not economists FFS!!!

I’m not going to go into minor things like average and marginal costs/revenues, cos frankly it bores the fook out of me. So just treat the following diagram as a nice little picture to break the monotony of all the text.

Essential Reading: http://en.wikipedia.org/wiki/Market_structure

Diagram borrowed from wiki - monopolistically competitive firms in the long run.

I see the anime blogosphere as a monopolistically competitive market; except that market players (bloggers) don’t actually set prices for, or make much, if any monetary profit from the goods (blog posts) they produce and sell to consumers. A monopolistically competitive market has the following characteristics:

1. Many producers (bloggers) and consumers (readers)
- What it says on the label.

2. Firms are profit maximizers, but in the long run abnormal profit equals zero.
- Let’s just say for example, that profit=traffic/hits/readers. As a blogger you’d certainly want as many people reading your blog as possible. Potential bloggers see that there is a huge market for blogging and they enter the market in an attempt to grab a slice of the profit (or to get a bigger e-penis). As more and more bloggers enter the market, saturation occurs and the extra ‘profit’ (i.e. excess blog readers above the average) is then spread out between all the blogs, and nobody ‘earns’ more than their competitors do - in the long run. This is probably true to a certain extent I guess, what with more and more blogs popping up all the time, some readers may find some blogs more suited to their taste and switch over, decreasing the ‘profit’ for a once market-leader. That is not to say that all blogs ‘perform’ the same - why do popular blogs like Random Curiosity or Memento get so many readers? Because of the work Omni and Garten put into them of course. You reap what you sow - put in the effort by writing good quality posts that people demand, get the product to those consumers in a timely fashion and you’ll receive the rewards (most of the time).

Note: Is there ever a situation where too much profit becomes a bad thing? Yeah, it’ll get you investigated by the Competition Commission (in the UK anyway) for fear of foul play and consumer exploitation ^^; In a not-so-similar vein, too much traffic can overload your servers and perhaps even end up costing you money :/

3. Firms produce and sell differentiated goods that are highly substitutable
- Bloggers compete for traffic by trying to make what is essentially the same product (heterogeneous goods) different from their competitors’ by…. making it a different colour etc. Branding is important! Just think of the market for clothes or shoes. Similarly, bloggers can build up an brand and image that consumers can easily recognise. Personally, the three ‘names’ that stick in my mind the most are Momotato Daioh, JASCII and MOON PHASE

The only difference between blogs and any other monopolistically competitve market is that you can consume a large amount of anime blogs (you can’t exactly buy each and every type of cheese in the deli for example) for free, almost, without many consequences. The only price you pay is your time (and internet & electricity bill). [I'll refrain from talking about opportunity costs, or this post will never end]

4. There are (almost) no barriers to entry and exit
- Anyone can start a blog, and is also free to stop without incurring significant costs or facing legal consequences. Nobody’s gonna harass you once you decide to stop blogging. Hopefully not anyway….

5. Firms are price makers (to a certain extent)
- All firms wield some sort of market power , and could theoretically charge whatever price they wished for their good. Obviously this would be detrimental to a firm’s revenue and profits - a demand curve is downwards sloping → higher prices equals lower demand for the product. Can you imagine someone charging ppl to read their blog? It happens though. Only if you’re famous and can charge unwitting fans to read boring posts about what you ate for lunch (some seiyuu do it - join my fanclub and you can read my blog!).

-Alternatively, you could think of the price of a blog post as the time it takes to read it (can’t put a definite value on that though). So writing a 10,000 page essay on the art of being a lolicon ain’t gonna get you more readers… probably. Maybe that’s why I don’t get a lot of visitors ^^;;;;

Advantages of a monopolistically competitive market:
- Firms have incentives to innovate to outdo their competitors and this is an advantage for the consumers who get a higher quality product and more choice as a result. A purely monopolistic firm wouldn’t bother and you’d be stuck with whatever shit they chose to dish up. So it is with blogs, you have to make yourself stand out or nobody will bother.

Disadvantages of a monopolistically competitive market:
-Excess capacity
Because firms want to maximise profits, output isn’t produced at a point that minimizes average costs i.e. bloggers don’t write blog posts taking into account the sweat, tears and internet bills that go into each one and minimising the effort needed. OK, this point is rather ridiculous a in theory a firm has excess capacity if it can reduce its average costs just by increasing output. But seriously, does anyone ever think Oh God, I’m not making enough use of the money I pay for that broadband connection each month - let’s knock up a couple more meaningless blog posts to make up for it?

-Deadweight loss
Small, but still present. (thinks of whether to waste 20 pages illustrating what the term means). Simply put, it’s a market deficiency caused by ineffiecient allocation of resources; in the diagram above the red bits represent the deadweight loss of a market. In other words, the utility to consumers of consuming additional units of the output exceeds the cost of producing said output i.e. the value a blog reader get from reading additional posts on a blog is more than what it costs the blogger to write those extra posts (Ideally, both variables should be equal). God, it makes no sense in this context. It doesn’t even sound right in my head. Forget it.

Anime blogging cannot be a/an/-:
Oligopoly - because there are many, many blogs and there are no barriers to entry/exit.
Perfectly competitive - because blogs are not all the same (unlike arguably, potatoes), and there is product differentiation. I’d say anime blogs are very close to being perfectly competitive, but not quite.
Monopoly - for duh obvious reasons.

Thus ends the brief economics lesson. Obviously I don’t really think of anime blogging as being particularly vicious or cut-throat to the point of one being driven out of the market penniless; if you find that you’re not really getting any profit or joy from blogging then the only possible cost incurred is… emotional distress at being a blogging failure? This model I’ve laid out isn’t perfect, there are plenty of flaws in fact - i.e. the growth of potential consumer market and the fact that blogs don’t really fight for market share as such, but ‘happily’ co-exist in a community. Feel free to find more holes in my theories ^^;; Economists don’t appear to make up a huge part of the otaku crowd, at least not in my uni’s Anime Society anyway…

I never imagined I’d drag up stuff neatly tucked away in a dark corner of my brain for the last few years (this is all A-level stuff). I hope I didn’t get the fundamentals wrong, if I did - someone shoot me. I’ve been doing mainly asset pricing and econometric models that for the last 2 years of my degree that have more emphasis on statistics than economic theory so there’s loads of stuff I’m rusty on - I did get 96 for my Market Systems A-level module though ^^;

OK, so this whole post is really just a bit of fun and a piss-take for me, an economics nerd. Also to remind myself in 5 years time what an oligopoly is, cos a lot of ppl I know forget everything within a year of graduating ^^; Economic theory is very wishy-washy, features a lot of dumb diagrams that rely on What if? and What happens next? situations and are near impossible to apply in real life >_> But hey,

Apologies for boring the hell out of everyone, I hardly ever write posts that require exercising the ‘useful’ part of my brain. Let’s move on…..

Posted on June 13th, 2007 under anime, misc • RSS 2.0 feed • Leave a response, or trackback