Just a brief comment on an Economist article abouth the death of yearbooks that found its way onto Hacker News.

It astonishes me how mainstream media inevitably take such a polar view of the analog-to-digital cultural transition. The thesis of the article is predictable - traditional yearbooks are expensive, but ‘permanent’ and nostalgic; whereas digital substitutes are cheap and accessible, but transient.

The nuanced position is ignored. Why couldn’t you utilize both digital and traditional mediums?

Here’s an idea…

Publish the yearbook as a pdf and email it to student, as well as storing it on your institution’s website for easy access by alumni who forget to back up. Then, provide the pdf to a friendly POD publisher so that alumni who want a hard copy can purchase one themselves - not just on graduation, but whenever they so desire. You could allay privacy concerns by using a password system.

Why not take it one step further - make the ‘yearbook’ a dynamic digital product, leveraging existing assets such as facebook, flickr, students’ blogs etc - like a friendfeed for a year-group of non-nerds. Alumni could access it whenever they’re feeling reminiscent, and would interact both with memories and current friend events. Periodically (say for reunions) you could have this render into a pdf that could again be distributed through a POD publisher.

Maybe this is too hard for a few students at an educational institution to do. If that’s the case, it could make for an interesting startup project for a young hacker.

One of my favourite VC blogs is Laserlike by Mike Speiser, the original concept of which was to provide free ideas to entrepreneurs. One of Mike’s early ideas on auctioning off movie tickets caught my attention, enough that I decided to research the idea further.

Firstly I think it’s hard to apply this idea to movie tickets, since doing so would conflict with the common pricing policy of selling tickets at cost and profiting from advertising and candy bar sales. However, it seemed like a great idea for tickets to one-off sporting and entertainment events.

In theory, auctioning-off such tickets would be optimal - by charging all customers the price that they’re willing to pay (or more precisely the price that the next highest bidder is willing to pay) you would maximise revenue, achieving something approaching perfect price discrimination. The two major conditions for price discrimination are poetically met:

1. Since you would be the sole vendor of tickets for unique events, you would have a clear monopoly, with the only seepage occuring through scalpers; and,
2. Since your consumers are actually fans (of varying degrees of rabidness) there is a significant difference in price elasticity between customers - quite simply, some fans are willing to pay much more than others are, for the same thing.

So why then did I decide it wouldn’t work? Because of the public backlash in Melbourne when Ticketmaster Australia decided to auction off just a small fraction of tickets to a concert by The Police. The tactic created enmity towards both Ticketmaster and the band, only partially mitigated by a policy of donating some of the proceeds to charity. As far as I can tell, Ticketmaster no longer conducts ticket auctions in Australia, and auctions only a small number of tickets for charity purposes in the US.

So here is the fatal flaw: The fans that are willing to pay the most for your tickets (i.e. those with a price elasticity approaching zero) are also going to feel the most betrayed. They’re also the most likely to vocalise their outrage. So by alienating your best customers, you’d in effect be cashing in some of your goodwill, ultimately diminishing the value and longevity of your product.

While price discrimination might work if you’re selling grande coffees or “deluxe edition” cars, there needs to be a significant paradigm shift before it can be applied to selling identical tickets. Otherwise, the very customers who drive your sales will be the first to foresake you.