Post Corona: From Crisis to Opportunity

by Scott Galloway

There are two fundamental business models. One, a company can sell stuff for more than the cost of making it. Apple takes about $400 worth of circuits and glass, imbues it with the promise of status and sex appeal through brilliant advertising, and charges me $1,200 for an iPhone. Two, a company can give stuff away—or sell it below cost—and charge other companies for access to its product: the consumer’s behavioral data. NBC hires Jerry Seinfeld to write a TV show, films dozens of episodes on a studio lot in LA made to look like a sanitized version of Manhattan, then beams it out for free to anyone with a subscription to watch. But every eight minutes, NBC interrupts the witty banter with several minutes of ads, for which it charges the advertisers, who are its actual customers. The product, of course, is you. Some businesses combine both. The NFL gets about a third of its revenue from the first model: selling tickets to fans at the games and selling clothes and other items with NFL logos on it. And it gets about two-thirds of its revenue from selling access to those fans to advertisers, from 5-million-dollar Super Bowl ads to the corporate logos plastered over every available square foot in the stadium. As we move into a tech-based economy, however, that second business model becomes both more lucrative and more troubling.