Digital Assets And The Securitisation Of Human Effort
In the last few weeks, there have been a few different articles and videos which cover Digital Assets in less task-specific terms and discuss the topic in a wider business context. Some are better than others. The first of these: The three steps to becoming a ‘hypergrowth’ company in the digital asset era, is one where the title and sub-header might be more interesting than the article copy:
“The world’s biggest hypergrowth companies no longer need to own a huge inventory – digital assets are now equally if not more valuable than physical assets” [Read More]
The thesis of the author’s argument is contained in the first paragraph:
“We live in a world where the quickest growing transportation company owns no cars (Uber), the hottest accommodation provider owns no accommodation (Air BnB) and the world’s leading Internet television network creates very little of its own content (Netflix).” [Read More]
One point not made in the item referred to above is that while the on-line firms in question have avoided that pesky product problem; real, live, flesh and blood human beings are still required to drive the cars, make the beds and breakfasts, shoot the footage, write the stories and appear in the aforementioned productions also. Although the article fails to acknowledge it, this is the significant fact about the digital asset era (and one which I will return to later).
The other item was a video called 5 Vital DAM Tips that John Price from OpenText posted on the DAM News LinkedIn Group (in addition to a few other places, I believe). The video can be viewed on the digitalmediaworkstream.com site and also YouTube. I particularly want to discuss item #3 “Think Of Digital Assets As The Currency Of The Modern World” (17:05) by David Lipsey (who many readers will be familiar with). The essence of this tip is that the digital material created by people in organisations and associated metadata has a measurable financial value. This is a point made we have many times before on DAM News and understanding of it is essential to developing an effective DAM strategy.
Self-evidently, the value which transforms raw binary data into digital assets is generated by human beings. I don’t think this is a point lost on the participants in the video (hence why they discuss retaining as much of the metadata generated as possible even if it has no currently known benefit). I am less sure the author of the earlier article has the same level of comprehension, but what is interesting is that they are both reaching similar conclusions about digital assets having intrinsic value, even if an understanding of exactly why may not be universally held.
From a fiscal perspective, referring to these entities as ‘digital assets’ is something of a misnomer in terms of the true source of value. The digital element is just a token which represents human effort. Last year, the topic of legacy metadata preservation was discussed and a point made in that article was that not preserving this data is writing down the value of your digital assets. The organisation is effectively crystallising a loss equivalent to the time incurred by employees to generate the metadata to begin with. More people now understand this concept, so the task is becoming more demanding (and expensive) to reflect the increased value of the assets concerned.
While the operators of firms like Uber, Air BnB, Netflix etc want to advance their brand as the key value proposition, in reality, it isn’t. Without the human endeavour to back it up, they would be no more than websites and logos. A counter-argument they might make would be that the opportunity to convert time into value only exists because they provided the exchange to enable the transaction to occur as well as the brand ‘promise’ that they have spent time and money to develop with their customers. That is not an unreasonable suggestion, but their element can be replaced or eroded, for example, web properties like MySpace have collapsed in value because many of the users who created and maintained their digital assets (i.e. the profiles) have slowly moved elsewhere to other more favourable alternatives. The exchange might diminish in significance, but the need for people to participate in order for them to remain of use, never does. While the tech sector grapples with Artificial Intelligence (a problem that won’t get solved as quickly as it collectively thinks, in my opinion) you still require human beings to generate the value that creates digital assets, even if the time (i.e. cost) required to do it can gradually be made more efficient.
In the last few months, a number of DAM commentators have discussed the human resources aspect of this sector. I have written articles on DAM News and elsewhere highlighting that most of the action in DAM (as measured by the overall level of activity) is usually in the cataloguing task, rather than the software, which has a comparable role to the online businesses I mentioned before. One possible reason why the level of innovation in DAM solutions has now slowed (and some would argue has now ceased entirely) is because DAM software developers have run out of useful ideas which might assist with the most labour-intensive element of the exercise. This would also explain why many have recently begun to look to other adjacent markets to try to expand the scope of what they offer and maintain levels of customer acquisition. In simple terms (and not ones you are likely to hear many of them using in public) they can’t do much more to help you with this DAM task now. I don’t think the vendors have yet fully exhausted all the opportunities available to enhance their products yet (by any measure) but the pay-off might not be as appealing to them as it once was – and they are all commercial operations with revenue and cost pressures, like any other.
If you are a DAM user, this should yield two key conclusions: firstly, treat with the appropriate bucket of salt any suggestion that the technology alone will be sufficient to solve this task, as should be apparent, the opportunity in that area is levelling off currently and entering an indefinite holding-pattern state. Until someone can come up with a significant productivity-enhancing innovation which everyone else in the market can copy, the technology side will continue to grind itself down. The second far bigger concern is the human element of the exercise: how will you start enhancing the value of your digital assets so that they earn enough to not only pay their rent but allow you to profit from them also? In other words, who will do the work and how can their task be made as efficient as possible without compromising the value obtained?Share this Article: