Artificial Scarcity and Media Industry

Introduction

Artificial scarcity refers to the different ways media companies deliberately limit access to their goods and services.

Media products are incredibly challenging and expensive to create. The average cost to develop a major studio film is over $65 million with another $35 million for marketing. The larger publishers in the gaming industry are willing to spend the same amount to deliver the top titles.

However, media products are cheap and easy to reproduce. Audiences were able to copy music from one cassette to another, but now any mix tape can be uploaded and shared to the world in seconds. The same interconnectivity is true for films, games and many other media forms.

If companies in the cultural industries want to remain profitable, they need to control the distribution and circulation of their products. Nicolas Garnham (1990) identified several strategies companies used to create scarcity, including copyright, box-office mechanisms, obsolescence, media hardware, and patterns of ownership.

Copyright

Garnham argued media companies relied on copyright laws to turn culture into a commodity that could be bought and sold. These laws enable the companies to maintain ownership of their original content and give them exclusive rights to determine the distribution and consumption of their products

Publishers in the videogame industry, for example, own the rights to various elements in the production, such as the code, storyline, characters, artwork and animation, level design and cinematic cutscenes. You are not allowed to use any of these parts without their permission.

Nintendo is notorious for their pursuit of textual poachers who want to steal the semiotic raw materials from their favourite games to create their own content. Any reviews or walkthroughs of the latest Mario adventure uploaded to YouTube will be compared to the database of audio and video files submitted by the company. If the Content ID system finds a match, Nintendo may block the video from being viewed by other users.

Pirating

Garnham noted piracy was an issue because of “the development of a market in cheap reproduction technology”. Anyone with two video cassette recorders could press play on one device and record on the other to copy a film or television series for their friends. You could even photocopy the box art to make the finish look professional.

Digital media players made it even easier to rip a DVD on your computer. Then torrent sites, such as the Pirate Bay and LimeWire, enabled users to search a massive index of films and music to illegally download content. Many of these filesharing platforms are blocked by internet browsers, but plenty of people are still sailing the seven seas and finding ways of streaming media, especially live sport, for free.

Although companies try to limit access to the means of reproduction through copyright laws, Garnham warned the over-pricing of media products could “encourage the development of pirating alternatives”. Many consumers are criticising the rising costs of streaming services. There is also controversy with the licencing rather than legal ownership of videogame downloads. This tension between producers and consumers is one of artificial scarcity.

Fair Use

We can use copyrighted material without permission on this website because of the legal concept of fair use. This “loophole” allows the limited use of images, videos and ideas for educational purposes, analysis and reviews, or even satire. We have our own copyright policy to help you determine how our content can be used.

Remember, fair use is a defence, not a right. You can still be challenged or taken to court so be careful what you post online.

Box-Office Mechanisms

Film companies use copyright laws to manufacture artificial scarcity by determining where their products can be screened or streamed. The big studios have always staggered the release of their productions to control access to consumption and maximise profit. Known as the release window system, the traditional summer blockbuster opened in cinemas and ran for 90 days before it became available to rent in store and, more recently, online. There were no technical reasons for this delay. It simply enabled the studios to accumulate more revenue from lucrative ticket sales without the competition from the home viewing options.

The theatrical window has now shortened to 30 days for many films because streaming platforms have changed the way we access content.

Disney’s Moana 2 (2024) is a straightforward case study. The film opened during Thanksgiving week in America when families were more likely to go to the cinema and, in terms of box office receipts, quickly matched the entire domestic run of the first film. The animated adventure was released in UK cinemas on Friday, 29^th November to take advantage of the weekend and build excitement among the target audience.

The film was still going strong in cinemas when it became available to download on Amazon Prime for a hefty $29.99 just two months after the start of its run. It reached Disney+ subscribers in the middle of March 2025 and physical copies were available to buy a week later.

This sequence of distribution follows the tiered monetisation model with each stage timed to maximise profits from different audience segments.

Studios can evoke tremendous excitement by releasing their film simultaneously around the world, especially if there is a global fandom. This strategy helps with marketing costs and reduces the risk of the film being pirated and circulated illegally. For Avengers: Endgame (2019), the “day-and-date” opening in cinemas also ensured the internet was not flooded with major spoilers and fans could enjoy the dramatic conclusion to the Marvel Cinematic Universe.

Netflix and other streaming services maximised audience engagement by releasing entire seasons of programmes in one day. This model of distribution was an attractive alternative to the traditional television package and guaranteed great publicity for the new services. Subscribers enjoyed the mode of consumption because binging episodes offered a tremendous feeling of instant gratification.

Now they have achieved market dominance, the streaming giants are returning to artificial scarcity by dropping episodes each week to generate a buzz around their prestige programmes.

Built-in Obsolescence

Garnham believed “the great achievement” of newspapers was their use of “rapidly decaying information” which meant readers were always forced to buy the next edition to find out what was happening in the world. Our access to information has been transformed by digital technologies, but social media has perfected the process of obsolescence and “constant reconsumption” by encouraging users to doomscroll through thousands of posts to satisfy their need for surveillance.

Instagram and Facebook also create artificial scarcity through the “manipulation of time” with their stories feature. These images and videos play on our fear of missing out because they disappear after 24 hours. It is a clever way to drive user engagement.

Repertoire

Garnham argued scarcity only worked if media companies offered a “cultural repertoire” of products to “establish a stable market”. In other words, audiences need a constant supply of content. All the streaming services recognised this issue and were quick to fill their libraries with original films and programmes.

In terms of business models, Netflix and Disney+ rely on subscriptions to establish more predictable revenue streams compared to single-copy sales and advertising. They also have the data to meet the preferences of their audiences.

Targeting subscribers is type of “constant reconsumption”. The streaming services have their original content and “recently added” sections to keep you paying that monthly fee. The use of the “leaving soon” label also creates a sense of urgency because you will need to finish binge-watching your favourite show before it leaves the service.

Provision of Cultural Hardware

Another strategy to control the market and maximise audiences is to “concentrate the accumulation process on the provision of cultural hardware”. Instead of limiting access to individual texts, media companies control the technology consumers use to engage with various forms of content.

The videogame industry is a good example of this artificial scarcity. You need to buy a Nintendo Switch to play a game developed by Nintendo and a PlayStation exclusive has to be played on Sony’s machine. Once a consumer chooses a particular console, they are likely to stick with that system, buy more titles and downloadable content, subscribe to their passes and online memberships, and buy accessories.

The manufacturers know they can make money through this customer loyalty, so they often sell the hardware as loss leaders to build a large user base.

Concentration of Power

Garnham referred to the “almost daily announcement of takeovers, mergers and strategic alliances in a process of increasing international consolidation in the publishing, audiovisual and telecommunications industries”. This description of the media industry still rings true over thirty years later.

Media companies operate with the same “modes of production and organisation of industrial corporations” so mergers and acquisitions are inevitable as producers try to maximise efficiency, audience share, and profit.  

Vertical Integration

David Hesmondhalgh (2019) believed vertical integration was the “primary” mechanism for artificial scarcity. By owning more than one stage of production, distribution and retail channels, media companies can control the release of their products.

The Walt Disney Company is an obvious example. The entertainment conglomerate owns the studios that produce films: Walt Disney Motion Pictures, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, Lucasfilm, and 20^th Century Studios. They can stream their huge repertoire of films on their own platform, Disney+, or distribute physical copies through the Walt Disney Studios Home Entertainment company. If you want to listen to the soundtrack and original songs, Disney also owns the Disney Music Group and its subsidiaries.

Garnham noted “the development of such centres of cultural powers also, of course, raises barriers to entry”. How can independent publishers compete with the financial power of the conglomerates?

Downstream

In media studies, downstream integration refers to a company moving closer to the audience side of the process. Newspapers may have owned the content and printing presses, but they relied on physical newsstands and shops to sell copies. Now they can reach readers directly through their own websites and apps. Similarly, Nintendo and PlayStation offer digital downloads without the need for retailers.

Upstream

An early example of upstream integration is Warner Bros. who owned some projection equipment to display films in the early 1900s. They invested their profits in several films to make sure they had content for audiences to watch and were then able to build their own studios in Hollywood. More recently, Netflix simply transmitted films and programmes before investing in original content.

The Commodification of Audiences

Garnham argued “power in the cultural sector clusters around distribution”. We have considered some of the ways media companies limit access to a product on purpose even though they could easily distribute more copies.

However, many media companies ignore the artificial scarcity strategies and try to maximise audience share by making their content available for free. For example, Metro is the most circulated newspaper in the UK, and it costs nothing to buy. You may have picked up a copy on your way into the London Underground or getting on a tram in Manchester.

Although you need a television licence, you can watch ITV and over 100 other channels for free. You can access billions of videos on YouTube for free. Or listen to a huge repertoire of music on Spotify for free.

Millions of players around the world battle every day on Fortnite or log into the Roblox virtual universe for free. Casual gamers pay nothing for Candy Crush and Sims FreePlay.

Download Instagram or TikTok and you can communicate with the world for free.

Garnham suggested opening access to media products was the “most successful solution” to controlling distribution. Importantly, the “cultural software merely acts as a free lunch” because the media companies are involved in the “creating, packaging and sale… of audiences to advertisers”.

You are the commodity, and your attention is being sold to the highest bidder. In fact, you are being commodified right now.

Artificial Scarcity and Advertising

It is also worth noting artificial scarcity is a marketing strategy that forces consumers into a buying decision by deliberately limiting the availability of the goods or services to play on our fear of missing out.

Think about the sense of urgency you feel when you are searching for a cheap flight, and you see the phrase “two seats left at this price”. Do you immediately select the option and click continue because you want to take advantage of the deal before it is too late?

The next time you are shopping online, look for the “only four left in stock” warnings above the “Add to Cart” button and remember the concept of artificial scarcity.

Final Thoughts

Nicolas Garnham emphasised the importance of exploring the commercial contexts influencing the production and distribution of media texts. Since “the costs of reproduction are marginal” compared to “the costs of production”, media companies need to control consumer behaviour and the way we engage with the content. They can make it more difficult for audiences to access products through artificial scarcity or they can offer the product for free to monetise the audience.

Either way, the media has become less about creativity and more about market control.