A free market economy

ECONOMICS could soon be facing its greatest shakeup since Adam Smith put pen to paper. Previous notions of supply and demand are being eroded as consumers shift their interests to an increasingly digital, and open source world.
Obviously this is just hyperbole to garner a reaction and we are not about to see the collapse of our entire economic system. What is likely though is that we are approaching a new phase in economic theory as consumers cease to meet a price equilibrium with suppliers.
This shift in consumer’s preferences has started to have a profound impact on the way in which companies think about business. For media outlets digital has created a far more diverse and expanded market than could ever have been considered for a solely print organisation. With this expansion of customer base comes an increase in competition.
People no longer view news as something to be mulled and reflected over. Whereas once today’s news was, at worst, tomorrow’s fish wrapper, it is now forgotten by next minute. Free news sites and the the explosion of citizen journalists on social media has overwhelmed the old guard. Each media group has looked to itself, and its readership, and modified their business models. Paywalls, direct marketing, dynamic and tailored advertising based on reading preferences, each has its own idea of what will work and time is yet to confirm which will be right.
Meanwhile the larger publishing industry faces competition from the rise of ebooks, and individuals ability to publish their own so quickly and easily. The internet is monetising people’s hobbies like never before and in so doing places an increased burden on pre-existing business models.
So what is the problem? Industries shift and change all the time. Technological advances have always been viewed with caution as naysayers warn of dire consequences for people’s jobs. In previous models though as technology created a shift in people’s spending and consumption habits it also created an expansion in the sale of substitutable goods.
Where the digital revolution differs from the industrial is in people’s perception that certain goods should be free. The rise of free downloads, news services, torrents and ebooks is likely to create an unsustainable pressure on the production of these goods.
In some cases the gaps in the market will be filled by people willing to supply their time for free. The issue therefore becomes one of quality in certain markets. For current economic thought it is the quantity of goods supplied which effects supply and demand. As more people flood the digital market, handing out services either free of charge,  or as is growing on a peer  to peer level removing the need for companies and by extension employees, it will become the quality of the goods supplied which will make the difference.
The traditional economic model may need to shift therefore but it is most certainly not broken. As people realise that they cannot obtain the standard they want from free and non-regulated goods and services they will start to move back towards paid for products. The digital revolution is upon us but it is a revolution and as such will  come back around. Adam Smith may be reassured that his invisible hand is still at work leading to what could be rising standards in the future and an improvement in socially desirable options later down the line.