The value of Digital Asset and the Price of Luxury and Uniqueness

Dear Friends,

An apology for the long absence as I have been busy but then again if Minister Yeo has time to contribute in this blog, it truly reflects badly on my time management skills. :-)

Last Friday I had lunch with Minister Yeo at UE Square nearby's Bak Kut Teh store and the issue of valuation cropped up. We lamented the high price of property and Minister commented that luxury items have been on a rise globally. He felt that it was due to backward demand - the trend setters and truly reach start buying expensive condos, unqiue time pieces (for plebians like me, we call them watches :-), sports cars and other luxurious items. I added by saying that in modern times, human realise two things:

1. Digital assets are cheap because anything that can be digitied can be replicated at a low cost. Hence movies, books, software and anything that can be burnt in your CD-ROM drive will be near worthless in years to come. Remember how expensive a DVD movie was. These days, you could get a new minted movie DVD (original) at S$14-$18 dollars. It was not like this in the past. Look at software, even the "must-have" ones like Microsoft Operating systems and Office. You could technically get the OEM softwares or the students' editions without much verification from the sellers. Sure, it is bordering on the grey areas but with the onslaught of free operating systems like Linux and Star Office, you can practically start a computer with full application without paying a cent. That's why Microsoft is moving into web-based services, buying up facebook, trying out MP3 players like Zune and selling you Halo 3 on your Xbox 360. Your first day copy of Harry Potter is expensive (S$30?) because you just MUST KNOW how He Must Not Be Named's ass is kicked by the bespectacled hero. However, if you can wait a few weeks, copies of it is everywhere at discount bookstores. Information wants to be free as Steward Brand said. Actually, digital assets want to be cheap, as Harold Fock says.

2. Even physical objects are cheaper. Anything that can be duplicated in China and India, whom I wrote many years ago, as countries possessing 3-D photocopy machines, will be cheap. An amazing gizmo like iPhone is selling at S$600-800 (parallel import, again grey area) but even if you buy it from the US Apple Store, it wont break the bank because the parts are made in China. Your iPod is made in China. Coach bags are made in China. All your cool computer mouse, cute cute accessories and almost every darn thing is made in China. I always fantasized this story playing out in front of us someday. In Singapore, companies like to host annual dinner and dance celebration events. In such company events, we like the DJ to play table games in which they ask the table participants to collect 10 unique items. One cent coin, a tie, a paper clip, a ring, one curly white hair (dont ask why) and you see the servants.. I mean staff scrambling to collect the items to win a small table price.(While the senior management and their diamond-decked wives watch bemusedly and if they participate, they are known as "sporting"). I alway feel that it is the ultimate insult to workers because not only do managers torture their staff during workdays, they make them act like happy fools even on their days of fun! And I disgress... Imagine this one day - the DJ or MC will ask "Collect me 10 non-China/non-India/non-Vietnam made items and win a fabulous prize and the audience would start laughing because it cant be done! It is happening.

Think about it. It used to be a big deal if you drive a Continental car (BMWs, AUDIs and Mercs). These days, it is really no big deal. If you are willing to be saddled with huge debts, you can walk out with the car keys at S$1000 or less. So we move to Porsches and Ferraris. But these days, a Porsche Boxster does not even turn heads. (Ok, Mr Borat's infamous pussy magnet wont work here..) You need a Ferrari. Now project 10 years in the future.. what if China start building sports cars and make them look exactly like the Ferraris and Boxsters (but perform poorly), what price is a sports car? Do you think the Chinese manufacturers will stop at making cheap cars, USB drives and leather bags?

You play golf. I used to see the wannabe used to swing their stupid umbrellas in the street or at Shenton Way's car parks and bus stations. Not anymore. His 5 year old kid is already attending Tiger Woods' classes at the country clubs. The Ah Bengs are bragging about their post golfing activitie in Thailand (again, don't ask). It is so yesterday. I remembered the horrid interview I had in MAS with this head of department in 2001. He was talking about hobbies and of course did his usual "In Golf, you challenge yourself.. and you can spot a person's character by watching how he plays". He said it with near Zen spirituality. I told him it is a game and every sport is a challenge to yourself. And most golfers play so badly - you cant read between his golf strokes and spare me all that Sun Tzu's mumbo jumbo in the golf courses. I did not get into his department obviously and hey, Mr Yesterday, golf is a game. Period. (For the record, most of my MAS ex-bosses and mentors are great intelligent people but you cant avoid slipping a few oxymorons in, sometimes.)

You just bought the latest flashiest Nokia cellphone that costs your entire monthly salary (with a lock-in period with the Telcos). Your pals will take a look at it over lunch and explain to you with a bored tone that CNET Asia just announced a newer version will be sold next month. Your cool factor diminishes immediately because items that can be mass-manufactured is, just that, cheap. (For those who really need to be cool this Christmas, apart from bragging your en-bloc sale and your 12-months bonus, try showing off your iPhone. It is an elegant piece of gizmo and not everyone has it. For now.)

You carry LV bags. I met the copyright lawyer based in China and his job is to hunt for fake LV bags manufacturers. He said that some of the fakes are so good that even the experts fail to spot them sometimes or would take a long, long time to spot them. And you cant do spectral analysis or carbon dating on leather bags, could you?

We live in a cheapening world where there is too much money chasing too few non-digitiseable, non-duplicable goods.

Only things that cant be duplicated is worth something in the future. I was at Ode to Arts (Westin) yesterday and the retailor explained that business has been great. Singaporeans are collecting art - paintings and sculptures. For many well to do Singaporeans, they HAVE RUN OUT OF THINGS TO BUY AND IMPRESS THEIR FRIENDS.

A good friend who works in the luxury watch industry has a S$1 million sales target a MONTH!

What does that leave normal folks like you and me?

Here is one way. Create your own non-duplicable piece. Be a good cook. Learn to do arts and craft. Be creative. Film a movie ( a bunch of civil servants just did a mock video clip about themselves and that clip is now a proof of innovation and creativity. In months to come, I bet all the bosses will have a sudden interest in movie making and rap songs.) Write a song. Sing like Connie Talbots (see youtube.com) I have started taking lessons in Nanyang Academy of Fine Arts on oil paining. Here is a bit of self promotion:

The above is my first oil painting (under proper supervision) and it is so bad you cant duplicate it :-) It will be unqiue. Well, not really true. In China and Vietnam, there are copyist artists who mass paint paintings like a conveyor belt. You paint the people. I paint the sky. You use blue and I use green. But since I am not famous, hence, it is the ONLY piece in the world. And to me, it is priceless.

Harold Fock

Comments

[MQube]

nice piece :)

[Sze Wee]

never fail to amuse me :)

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