February 6, 2013

It’s a Virtual Currency! It’s an Old-Fashioned Marketing Campaign! It’s Both!

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Amazon announced today that it will soon launch Amazon Coins, a new “virtual currency” that customers can use to buy stuff on their Kindles. They’re planning to give away tens of millions of dollars worth of Amazon Coins. Matt Yglesias comments:

Each Amazon coin is worth one cent and can be redeemed by Kindle store vendors. In macroeconomic terms, you can think of this as a program of aggressive monetary expansion to stimulate the Kindle Fire economy. By delivering a helicopter drop of Amazon Coins to Kindle owners, Amazon is hoping to boost consumption of Kindle Fire content. Not for the sake of increasing consumption as such, but because higher expected demand for Kindle Fire content should stimulate investment by third-party firms in the development of Kindle content. In that sense, the monetary stimulus isn’t merely a short-term expedient to make Kindle owners happy. It’s part of a longer-term strategy to strengthen the overall Kindle platform (and increase its differentiation from generic Android) by exploiting the positive feedback dynamic between market size, app quality and quantity, and desirability of joining the market.

Matt writes an economics blog, so he talks about this in economic terms, something that Amazon is encouraging by calling their coins “virtual currency.” My background is in marketing, so I say bravo to Amazon for a clever marketing stunt. Amazon Coins are no more a virtual currency than frequent flyer miles or the coupons that you clip out of the Sunday paper, but it sure sounds cool to call it that! After all, virtual currencies are considered sort of a hot topic these days.

Alternatively, of course, you could say that both frequent flyer miles and newspaper coupons are virtual currencies too and always have been. It’s just that nobody’s been smart enough to call them that. And I suppose that’s true. Either way, Amazon isn’t really doing anything new here. They’re just pouring a bunch of marketing dollars into a launch promotion for one of their new products. If it works, every new marketing campaign that involves building up points or credits or loyalty bucks or whatnot will suddenly become the latest virtual currency. I expect the primary result of this will be a bubble in doctoral dissertations on closed economies on the internet.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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