The Misconceptions Of 'Free' Abound; Why Do Brains Stop At The Zero?
from the free-is-not-a-business-model dept
Jim Harper points us to a blog post by a guy named Richard Muscat, supposedly debunking the problems of "free" as it comes to business models. Frankly his post is pretty weak. It rehashes a bunch of arguments that have been debunked plenty of times before, but since we keep seeing these arguments made, I figured I'd use Muscat's piece to explore why it is that those who don't understand the concept of free are condemned to make such bad arguments against it.The key problem, it seems, is that people who dislike the concept of free have this weird issue where they stop thinking once the big zero enters the equation. In the past, I've pointed out that it seems like some brains have a divide by zero error problem, where, once they see free as a part of the business model, they stop paying attention to the rest of the business model and just focus on the free part. But here's the thing, no one is claiming that "free" is the business model. People who discuss the value of free have always been talking about how you use it as a part of the business model. So arguing that "free" is not a business model is a strawman. No one is claiming that free, by itself, is a business model because that makes no sense. But Muscat takes things even further, by claiming that it's so bad that it's "harmful":
My contention is that “Free” as described and used in many contemporary web-based businesses is a non-business model that is not only broken, but actively harmful to entrepreneurship. Free rarely works, and all the times that it doesn’t, it undermines entrepreneurial creativity, destroys market value, delivers an inferior user experience and pumps hot air into financial bubbles.Don't hold back.
Free does not push you to create something evocative that users and customers are willing to commit to in the long term.Because no one has committed to Google long-term. And before that no one committed to radio. Or broadcast TV. Huh? Having a product that is "free to the consumer" does not mean people won't commit to it at all. In fact, if you put together a smart business model, it could be the exact opposite. All of the examples here involve cases where companies use free to bring in people and then sell that attention to advertisers. In those cases, they very much have the incentive to create something that makes people commit, or they don't have the attention to sell. It's only if you stop at the zero and don't follow through that you could possibly claim that business models that use free don't get customers to commit.
Free absconds on the entrepreneur-customer commitment: by asking for nothing you also promise nothing. Both parties can walk away because there is no relationship. On the other hand by asking for money (or some other form of commitment), however large or small an amount, you create a self-imposed drive to produce creative and valuable products because not doing so would mean letting somebody down.
As the title suggests, the book argues that software pricing shouldn’t be decided randomly. There are three big reasons for not doing this: first, you might be missing out on revenue; second, your product price says something about the quality and intended audience of your product; third, your price also sets an expectation of how much effort has gone into production and how much value a customer should expect.Not sure what that has to do with anything. I don't think anyone is suggesting that people randomly choose free as a price either. In fact, we've been quite careful to explain that the whole point of understanding the economics of free is so that you can understand when it's appropriate to use free and when it's not. That many startups don't understand when it's appropriate to use free is not a condemnation of free as a price. It's a condemnation of people not understanding the larger economics and how to put together a good business model.
Choosing Free as your product price runs the risk of attracting entirely the wrong audience for your product or service.Sure. But that's only an issue if you fail to plan out the rest of your business model. The implicit assumption that Muscat makes here, which is incorrect, is that the whole point of free is to attract an audience which might buy.
Although you may get tens of thousands of users, it is probable that those users are unlikely to ever consider paying you because by definition you have attracted people who are looking for free stuff. Reversing this decision later can be extremely painful: you will piss off your existing user base, potentially generating very negative publicity and you might need to start from scratch in terms of looking for the right audience.Right, but that's not a criticism of "free," that's a criticism of a bad business model built around the idea that free is just a trick to get people to upgrade. If that's your business model, then he's right that it could be a bad business model (though some companies, such as Evernote, have found that it works for them). But that's not a problem with "free." That's a problem with the rest of the business model.
At some point or another you will realise that you do need to create a revenue stream. If you end up in the situation I just described above, i.e. encumbered with an audience of people unwilling to pay for what you’re providing, you will be faced with a dilemma: start over and risk the bad press or try to squeeze some pennies out of a reluctant user base.Again we see the divide by zero issue, in which he implicitly assumes that free is implemented in place of a complete business model. That's not the fault of "free." That's the fault of a bad business model.
The latter is a slippery slidey slope that leads towards intrusive in-app advertising, pop-ups, link-baiting, shady affiliate marketing, email spam and a total lack of focus on user experience.Indeed. Those would be bad decisions built on a bad business model. I'm not sure what that has to do with "free" however.
The idea that things can be free is behind a lot of financial bubbles. In the late nineties we thought that we could get distribution and infrastructure for free and we got the dot com bubble. A couple of years ago we thought we could get loans and bank credit for free and we got the property bubble. In both cases we left something very important out of the equation: delivery costs in the former and ability to repay mortgages in the latter.That's an interesting and totally incorrect bit of historical revisionism. First, the dot-com bubble was a result of investors (and many dot-coms, themselves) having no real understanding of web-based business models. Early dot-com successes (some real, some imaginary) created a rush of investors eager to throw money at any company offering something on the web -- without ever looking at whether they even had a business model. And I've never seen a loan or credit -- or internet infrastructure, for that matter -- that was "free." Were there some companies that went to extremes during both bubbles? Yes. But there was no direct connection to "free."
If you’re putting together a business plan or a slide deck that claims there will be an initial period of “short-term loss” while you establish a user base which you will then monetise, just remember that that is exactly what most of the pre-2000 dot com business plans were like.And, um, it was also the basic business plan of all sorts of successful businesses going back through history. It was clearly the plan of Google, Amazon, Facebook and Twitter, for example. So what? If you have a smart business model behind it, it can work. If you don't, it will fail. Claiming that it is inherently flawed is wrong. Also, it's the very basis of pretty much the entire venture capital industry. The whole reason why startups need venture capital is to fund that initial period in which there are short-term losses. It's called investing in growth. Intel had to build fabs. Apple had to build computers. Those involved "short-term losses" to build the product. That's how these things generally work.
Almost never. Somebody always pays. If healthcare is free, your taxes pay for it. If the flight is free, the extras aren’t. If the search is free, the advertiser is paying.Um. That's the whole point of using free as a part of a business model. Of course someone pays. That's what we're describing here. It seems totally ridiculous to go on for paragraph after paragraph discussing how free is awful because no one pays... and then, at the very end, to throw in a "but someone pays!" Why didn't he consider those points earlier in the article?
The only time when Free can really work for you is if you set your sights on having a specific outcome: acquisition.Yeah, just like Google. And Facebook. And Twitter. Good grief.
Look, if you understand the economics behind digital goods, you can quickly learn that there are places where free makes sense. It makes sense when, if you don't go free, your competitors will and you'll lose all of your business. But no one has ever suggested that free, by itself, is a business model and if your debunking of "free" is based on that, it just means you've stopped your analysis too soon. Free is an important part of many, many, many business models these days and that's been true for many years as well. Free isn't bad. It can be used badly, but to condemn it, based on that alone, suggests someone hasn't thought things through.
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Filed Under: business models, economics, free
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It looks more like they started with the conclusion and then tried to find as many reasons for it as they could. Of course when you do that some of your arguments are likely to end up contradictory!
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A bit simple, but to the point
Free is a viable part of a business model when the following conditions are met.
- You know what's being offered for free.
- You know why you can offer it for free.
- You know how to use the free product to encourage revenue from other products/services.
Using Free as the whole of the model, aka "give away and pray", is difficult to implement and may indicate a lack of understanding or shortsightedness on the part of the owner.
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This version of "free" only applies for those selling advertising!
-- So silly that I left it without comment.
Your views only apply to "high level" and mass markets; they're not workable for a /whole/ economy. You flatter a variety of grifters who were most likely born rich and get richer off robbing working people of the products of labor.
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Re: This version of "free" only applies for those selling advertising!
"Free Coupons"
"Free coupon matching"
Giving away things that have a definite (and high) cost to manufacture/distribute is stupid--are you? A manufacturer gives free sales quotes all the science-damned time; how far do you think they'd get if they charged for sales quotes?
Seriously, you get a D- on your trolling. Try harder next time.
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Software companies have been doing it for aeons. Even Microsoft, the greedy software giant we all know and love/hate.
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The problems all businesses have?
Replace FREE with "New Business", it can be entertaining
"(New Business) rarely works, and all the times that it doesn’t, it undermines entrepreneurial creativity, destroys market value, delivers an inferior user experience and pumps hot air into financial bubbles."
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Sell out
And who the hell wants to acquire a business that has a zero-revenues, all-expenses business model? (Rupert Murdoch can't buy them all...)
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Re: This version of "free" only applies for those selling advertising!
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No? Well, then perhaps he re-evaluate what the definition of "free" is. My time's worth more than his... at the moment.
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So I guess Linux dosen't count?
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Re: This version of "free" only applies for those selling advertising!
Where have you been, man?
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Re: So I guess Linux dosen't count?
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Oh now I get it!
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Why bother arguing this point?
If you simply want to have some fun with an idiot, tell him/her to live a year without anything free and report back to you. No ad-supported radio, TV, or other media, no free web sites, etc. If they want to "make an argument" against free, they'll have to do it without using Google, Yahoo, or whatever MS is calling their search engine right now.
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Re: Re: This version of "free" only applies for those selling advertising!
There is no free product.
Too many of the people who support free as a business model are those who fail to see the full cycle. They are dealing with their little piece of the universe, and don't understand that in the big picture, they are trading dollars for pennies. It's a short sighted business idea, judged to be a success by ignoring the larger implications and instead only focusing on short term results.
Free isn't a short term loss, free is the ultimate tool that can change the public's perception of the market price (and to some extent value) of a product. If something can be obtained for nothing at all times (think of a pack of matches) it also can negatively effect how people value the product, because they can always get more for nothing.
Free is the ultimate lazy marketing idea, it's the easiest, it's the one that eliminates almost all of the reasons for someone to say "no", but it is also rarely the most successful way to market. Yes, there will be examples where it works, but for the most part, it isn't the best way to do anything.
The free revolution is thankfully grinding to a finish, as almost all of them rely on give it away and pray methods (give them music, pray they buy a t-shirt) which have proven to be not all the successful for most. Yes, there are rare examples of success, but even a broken watch tells the correct time twice a day. It doesn't make it right.
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Re: So I guess Linux dosen't count?
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Re: Why bother arguing this point?
Me: none of those are free, and everyone knows it. They don't give away the product and hope you buy a t-shirt or a concert ticket from them, they sell advertising space. Trust me, their advertising isn't free.
The programming isn't free either, you pay for it with your attention to the ads, even if you claim to skip them. You still go product placements, you are still paying.
So your argument is empty, because all of your examples aren't free, only not appearing to have direct cost. That is entirely different.
Put another way, if 100% of online users blocked advertising, most of these sites would disappear because they are not free.
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Free for one =/= free for all
Namely, that pirates think it is THEIR "right" to obtain something for "free" regardless of the cost or effort that went into actually creating the "stuff" that the pirates obtain for free.
Look, if ONE content creator wants to give stuff away for free as a means to introduce him or herself to a market, that's great, and it's solely their decision to do so.
But when a pirate decides to obtain the content of OTHERS for free, just because someone else made theirs available for free, that's where I draw the line.
The pirate has no inherent right to decide on his or her own that "free" is the distribution model that should apply to whoever created the content the pirate has chosen to obtain.
Only the content creator can make that decision, not the pirate. And that's the problem I have with "free".
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Re: Re: Why bother arguing this point?
OF COURSE they make up that money from other sources. That's literally the entire premise of this post. "Free" does not mean "makes no money anywhere" - that's exactly the fallacy that the post is combatting.
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Re: Re: Re: This version of "free" only applies for those selling advertising!
You obviously have no understanding of business. You ever heard of a "loss leader"? Lose money on one thing to gain money on another.
My company _has_ gone through this. We have two products: the first can be automated so the customer enters info and gets a rough answer, the second requires an engineer to review and sign off on. My company was thinking about charging for both, which is crazy. One has a marginal cost of zero (even though the fixed cost of creating the website was a few weeks of work), and the second has a real marginal cost. Why not make the first free, which will act as free advertising for the second?
It literally took me days to talk my management out of charging for the first. I kept telling them, if you charge for it, it won't be free (to us) anymore. Free stuff doesn't have to work right and doesn't need technical support. Once people have to pay, it better work perfectly everytime. If it doesn't, I don't care how cheap it is, they are leaving with a bad taste. Free avoids all that.
Free, as a part of a business model, is going nowhere.
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Re: Re: Why bother arguing this point?
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it's not for everyone
The "second" and "third" look the same to me (and the "first" is always true), but here goes.
First comes the ideal free market of rational agents, wherein better goods cost more. Lower the price and more people will buy.
Then comes the market of lazy ignorant people who use price as a guide to quality (like me when I'm buying wine). More people will buy if you raise the price.
Then comes the market of knowledgeable buyers who are not fooled by the marketing tricks of the second market (like me when I'm buying tea). This pretty much takes you back to the first market, but with a lot more room for idiomatic appeal to niche markets.
If you are set squarely in the second market, and can't see anything else, then the argument above makes sense-- if you give something away, people will think it's worthless. But by that same argument there's no need for me to worry about competitors who do that; they don't cut into my business, they don't "distort the market", people will walk past their "FREE STUFF" to stand in line at my boutique.
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Re: Re: Why bother arguing this point?
If a business decides to "give away the product and hope you buy a t-shirt or a concert ticket from them," then "the product(s)" are t-shirts and concert tickets rather than whatever you seem to *think* their product is. In the case of ad-supported radio, TV, or other media, "the product" is not the freely available media--it's the media consumers' attention spans (i.e., "you are the product they're selling"). They're not "giving away their product," they're creating the product by building an audience.
If you ever find yourself thinking "but company X isn't *really* giving away their product because they're making money in another way," then you have finally realized what company X's *actual product* is as well as what makes "free as part of a business model" work. That means you now agree with the rest of us whether you like it or not, so stop and think about this paragraph very carefully. If company Y is giving their product away and NOT making money in another way, then, by definition, that doesn't even qualify as a business model:
http://dictionary.reference.com/browse/business%20model
If that needs discussion for you to understand, then you'll need to find someone else to waste their time making the point. I'm walking away.
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Re: Re: Re: This version of "free" only applies for those selling advertising!
They wouldn't be. But who was talking about "give it away and pray"? Richard Muscat may have been, but Mike wasn't.
I'll give a few examples of using free as part of the business model. Sam's Club, Sheetz, WalMart, Microsoft, Google, VMware, Red Hat Linux. My company understands the value of free as part of the model.
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Re: Free for one =/= free for all
Piracy is a symptom of artificially high prices and anti-consumer practices (that existed long before digital "piracy"). The middle men (who are not themselves actually content creators) should not have a say in what the consumer pays for the product. The market should. Consumer demand is a significant factor in the market. If the middle men ignore this and disrupt the market with their greed and collusion, don't be surprised if the consumer ignores the market altogether as well.
But beyond that, I doubt pirates are taking stuff for free simply because some content creators give away their stuff for free. Pirates pirate because the price is too high or the product is otherwise unobtainable or because the pirate values the product at a price point of no greater than zero (or a price point at which the consumer's valuation of the product decreases if it gets any higher).
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Re: Re: Why bother arguing this point?
This just goes to show that you have stopped thinking. Giving away your music in the hopes that someone will buy a t-shirt or a concert ticket or some other merchandise, is nothing more than advertising. Did you think that all those ads were created and displayed for free? It's the same exact thing. They create something (that costs money, often bucket loads more than it costs to create a song) and give it away hoping that someone will buy the product.
And this is no different than writing a song and giving it away hoping that someone will pay in other ways. Forsooth, it's probably more effective, as the content (which is advertising and vice versa) is much more engaging.
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Re: Free for one =/= free for all
While I think most pirates are not really potential customers in the first place, some may be. In reality their piracy has just opened the door for you to find them something else to sell to them that can't easily be copied; things like service, personal availabilty and connection, physical collectables, any variety of things that will always be scarce.
In the end, Free can be great pirate insulation.
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he should read
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Re: Free for one =/= free for all
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Re: Re: This version of "free" only applies for those selling advertising!
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Re: Re: This version of "free" only applies for those selling advertising!
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Two Words: Angry Birds
So they give something away free, which lets people experience the product and generate sales.
Not only that, I was at an amusement park recently and saw big stuffed versions for sale and as prizes for the various skill games.
They made a game with cute characters, gave a limited version away that was still enjoyable enough for people to want more and were willing to pay for more. Then they license other products based on their characters. Characters that became hugely popular because of the freely available lite version of the game.
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Re: Re: Re: This version of "free" only applies for those selling advertising!
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This is subheaded "free-is-not-a-business-model"
Intel, and Apple DO NOT GIVE AWAY THEIR PRODUCTS! -- I DARE anyone to say that they do.
'But no one has ever suggested that free, by itself, is a business model and if your debunking of "free" is based on that, it just means you've stopped your analysis too soon.'
OH, YES, /YOU/ HAVE, MIKE! Take the link. You previously referred me to Wal-Mart's free samples (not even theirs, manufacturer's), which are utterly insignificant beside Wal-Mart's tens or hundreds of MILLIONS revenue every day. That's more than dodging my point; it's deliberately deceitful, doubly so after your quote from this piece.
Continue to follow this guru and his notions of "free" if that's all you can manage, but it just ain't the way business works, and the real sharks know this is baloney.
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Re: This is subheaded "free-is-not-a-business-model"
Then what the fuck is your point? You never do make that clear.
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Re:
Our disagreement comes from whose perspective it is free.
If Walmart gives me free coupons, it is free from my POV.
If Google gives me free email, it is free from my POV.
If the radio station gives me free music listening, it is free from my POV.
Of course, somebody pays for it. But I don't.
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Re: Re: So I guess Linux dosen't count?
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Re: Re: This is subheaded "free-is-not-a-business-model"
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Muscat is confused
Free is the hook that snags the fish or the snare that grabs the prey. It catches the customer, brings them in, and puts them in a situation where they are more inclined to patronize the product/service side of your business. You can give them something they want for free and then sell them something that adds value to that thing they got for free. Or perhaps League of Legends has it wrong?
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Re: So I guess Linux dosen't count?
There are over 100 MILLION Android phones -- which runs on Linux. HP's WebOS, again Linux. TiVo. Cable company DVR's. Home and office WiFi routers. TVs and other products. Ebook readers (Kindle, Nook). GPS navigators (Tom Tom, Garmin). Just about anything with an embedded web server (eg, printers that offer browser based setup).
Free Linux is everywhere.
Lots of companies have built business on it, and spend money and manpower to contribute resources to it.
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Re: Re: Re: Why bother arguing this point?
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Free Shipping gets my business some times
Free Trials work for me too (Try then Buy FTW)
The ONLY Free stuff I do not like is
Free Advice
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Re: Muscat is confused
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Re: Re: Re: Why bother arguing this point?
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Price as a measure of quality?
"There are three big reasons for not doing this: first, ... second, your product price says something about the quality and intended audience of your product"
Stop. Just stop right there. Anyone who has ever paid $549 for Microsoft Office, then tried OpenOffice knows good and well this is sugar-coated BS on a stick. Price is NEVER a mark of quality. In some specific markets - which does NOT include software - cost can be used as a measure of quality. However, Price isn't Cost. Cost is a measure of the resources the company puts into a product, which should sometimes be an accurate measure of what they get out of it. Price is a measure of what the average idiot is willing to pay for it. Price is a measure of greed, and the stupidity of the consumer. Price can even be seen as an indicator of how well the overall global Economy is doing at any given point in time. However, price is never, NEVER an indicator of quality. To confuse price with cost is a grave mistake.
This is important because Mr. Muscat doesn't seem to understand the difference. If he did, he'd know that software development has an incredibly low resource cost when compared to virtually every other industry. Basically, power and an internet connection. This is how Google was still serving over 12,000 hits per minute before they finally moved it out of Larry Page's garage. The primary cost of software development (including web software) is time. Virtually every language can be developed for FOR FREE. You could spend $2,000 on Visual Studio, but you could also use Eclipse for free. However, no matter how hard you work, how much code you can pump out, and how skilled you are, you gotta sleep eventually. To that end, the real cost of software development, barring something on a massive scale like Google, is time, electricity, and an internet connection. That's all.
When your startup cost is under $1,000/month, you can go work at McDonald's for $7/hour and code it in your free time. The concept that you must charge your users $19.95/month before you ever get off the ground is kinda crazy.
Also, I love the way that Mr. Muscat is giving away his work - writings, which cost him no money, no raw materials, only his time - for free, supported by ads. Yes, I realize this is to help sell books but...oh wait, that's right, he's giving away some of the product for free in an effort to sell the rest of the product for money. Like a free trial, or a premium version upgrade to software, or something like that. Well done Mr. Muscat. You just proved the very point you're trying to disprove...
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Re: Re: Why bother arguing this point?
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Re: Re: Re: This version of "free" only applies for those selling advertising!
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which side of Free?
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Re: Re: Re: So I guess Linux dosen't count?
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Re: This is subheaded "free-is-not-a-business-model"
Almost nothing you state above is true. Care to try again?
Intel, and Apple DO NOT GIVE AWAY THEIR PRODUCTS! -- I DARE anyone to say that they do.
I dunno. I use iTunes. I never paid for it.
But, really, what does that have to do with anything? The whole point is learning when to use free and when not to. When selling physical products, it usually doesn't make as much sense to use free. There are some cases where it can work, but in general, we're focused on digital objects.
OH, YES, /YOU/ HAVE, MIKE! Take the link. You previously referred me to Wal-Mart's free samples (not even theirs, manufacturer's), which are utterly insignificant beside Wal-Mart's tens or hundreds of MILLIONS revenue every day. That's more than dodging my point; it's deliberately deceitful, doubly so after your quote from this piece.
You claimed WalMart didn't use free. I showed how they did. You were wrong. I didn't dodge anything. Nor have I ever implied that Walmart did or should use free as a key part of their business strategy.
Why pretend I did?
The only one being deceitful here is you.
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Re: Re: Re: Re: So I guess Linux dosen't count?
You still pay a monthly fee if you want to play the full game. You just don't have to pay for the first 20 levels.
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Re: Re: This is subheaded "free-is-not-a-business-model"
You DO NOT take the dare, only dodge:
"I dunno. I use iTunes. I never paid for it."
And, NO, specifically, in the linked piece, I say:
"But... FREE only works if products are duplicable at trivial cost.
out_of_the_blue, Jul 27th, 2010 @ 1:01pm
Wal-Mart doesn't use this notion. Neither does the MTA."
You then pointed me to a web page offering free samples not from Wal-Mart, but manufacturers. As I point out above, that's no answer for the tens of millions in revenue they get every day. "FREE" is NOT their "business model". It won't work for them. You just deny and dodge, fine.
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Re: Re: Re: Re: Why bother arguing this point?
Meh, that's just laziness on their part. In all cases, the lost profit from paid content is offset by the ever-decreasing costs of delivering content. Digital content is virtually free, and these industries are coming from CDs/DVDs/books/newspapers - all of which are extremely expensive to produce and distribute. Add to that the fact that technology now allows for much more effective advertising. In time, as analytics and targeting technologies develop, advertising will no longer be seen as an automatic nuisance, but as a convenient way to find products and services you actually want and need.
Content creators are in a better position than they have ever been. It's just the middlemen, who have invested in physical media, who are in trouble (but not if they are smart enough to separate their useful skills from their obsolete ones).
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Re: Re: Re: This is subheaded "free-is-not-a-business-model"
Accurately answering the question is not a dodge.
You then pointed me to a web page offering free samples not from Wal-Mart, but manufacturers. As I point out above, that's no answer for the tens of millions in revenue they get every day. "FREE" is NOT their "business model". It won't work for them. You just deny and dodge, fine.
Um. You are making my point. No one said that free is the business model. You seem to be arguing -- falsely -- that someone said it was the business model.
What we said was that they, like everyone else, uses free where it's appropriate as a part of a business model.
You're wrong. It's okay to admit it.
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Re: Re: Re: Re: Re: Why bother arguing this point?
It's alot more than that. It's the lack of efficiency in how they do things. In the case of newspapers its the huge debt load, a huge amount of monthly payments for the facilities they utilize and call home. In the case of Hollywood its 100 million dollars for a movie, the sheer size of the staff per movie, the cost of the actors, the huge cost for props, sets, and CGI. The TV and Movie studios are going to run up against the next craigslist in the next few years. Pads with free Video editting software, 1080p cameras, free special effects software, virtual sets, and groupware. Which means better videos of peoples stupid pet tricks on youtube and perhaps the occasional great movie.
You are right in thinking that the middle men are boned, and the content creators are in a great place at this point. I do not see any way to save the record labels, newspapers, or tv-movie studios.
The distribution piece is already in place. For Theater based movies the projectors have already gone digital. Meaning there is no cost to produce and transport reels of cellulose. For music and TV shows the same has occured.
Forcasting out, the promotion piece will be figured out in the next 2-5 years, at which time the record labels and studios will have no real value for any director or musician.
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Re: Re: Re: Why bother arguing this point?
So why would anyone go through all of the trouble to pirate? Well, people really do enjoy content, and will either pay with money or time. Copyright owners, however, mistakenly focus only on the price, often leaving the time/convenience part of of the equation. Then, they either price the item far above the market value, or don't even sell at all! It's hard to claim that you lost to piracy when you're not even in the market. If people in that country can afford a good enough internet connection to download it, then there's a market for it. Considering that even Russia has faster cheaper connections than the US, there's not much of an excuse.
Further, copyright holders think that just having it on the market, regardless of form or restriction, is enough, but that, of course, hasn't been true for a long time now. I don't know how many times I've heard someone ask "why can't I do this? I PAID for the damn thing!", when the only answer was "the copyright holder doesn't what you to." The problem is that if you don't get it to them, that time or money will go to someone else. Again, if you're not selling to the market, then you really can't claim that you're losing to piracy.
The best way to compete against piracy is to find a profitable balance between the price, time/convenience, and quality that provides a better proposition for the user. Considering that piracy is mostly competing on price, and sometimes quality, it's not all that hard to make a better deal. People, however, place different values on convenience or quality, so there is NO silver bullet. Convenience is fairly easy to achieve on the web, downloads or streams can be had with just a search and a few clicks. Services such as Amazon, Apple, Netflix, and Hulu are are obvious examples. (In fact, the only ones that stand in the way of even more successful services are the old gatekeepers, who want most of the profits while offloading all the storage distribution cost.) Throw in compelling balance of quality and cost, and you largely can beat piracy.
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Re: Re: Re: Re: This is subheaded "free-is-not-a-business-model"
There ain't no such thing as a free lunch, but you /say/ that there is to lure the rubes in for wall to wall product placement. Details are of course a problem: that's where your advice is needed.
You're starting a Newspeak dictionary, right? Because above, you definitely mention venture capital for start-ups and mingle it with your "free". So, venture capital equals "free" too. I'll make note of these, but since I find the words on your "About" page nearly meaningless (how do you analyze with a "framework"?), and certainly not strictly followed of late, I'm just going to be a stickler and continue to use the dictionary definition of "free". Therefore, even getting advertisers to pay the costs isn't "free", it's just the way advertising is done.
If your big innovation of "free" is merely loss leaders and other advertising, do you think that new? Here's what I see as your formula: Get or make a low-cost widget that everyone wants, then find someone who'll pay you for advertising somewhere associated with it; or minor version, get someone to directly buy a real product somehow associated with some widget that you can give away at low or zero cost; that being the National Public Radio "model" using a guilt trip. The big obstacle is to get noticed, then you can snowball. That's what I've said several times now, and it's all that you say though more baldly stated. -- Your low-cost widget here is to do a bit of rewrite on stories found online, and you have 13 parasites on the page to pay the costs. Got it. Infinite products that you don't create can be used to bring actual income. -- I think "grifting" is apt: you don't even pretend to create or increase, just figure out ways to scrape some of the fixed pie your way.
So all the college was just to learn how to conceal and put a new face on the same old methods that started with patent medicine shows and radio. Whee. The brave new world of online grifting.
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Re: Re: Re: Re: This is subheaded "free-is-not-a-business-model"
Accurately answering the question is not a dodge."
I'm going to be petty and quibble with this new dodge, though in more words: First, wasn't a question: you mischaracterize. Second, "I dunno" means you don't know, so you're kind of stuck now to maintain that you /do/ know. -- Third, NOT TAKING the dare means you agree that Intel and Apple do not give their products away. I DOUBLE-DOG DARE YOU to say that they do.
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Re: Re: Re: Re: Re: Re: Why bother arguing this point?
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Okay, think I gave you a fair shot, went and READ:
And to save you time, Mike, it's total raw sewage: your fixed costs are magically already successfully laid out, you consider only marginal costs. But since others might want to actually LOOK at what this person writes:
>>> 'To explain this, it helps to go back to your basic economics class and recognize that, in a competitive market, the price of a good is always going to get pushed towards its marginal cost.'
Er, "a competitive market" is an abstraction that you can't instance in the real world, where "the price of a good" is /always/ pushed to whatever fools can be coaxed or coerced into paying.
>>> 'That actually makes a lot of sense. As competition continues, it puts pressure on profits, but producers aren't willing (or can't for very long) keep selling goods at a direct loss. Sunk (or fixed) costs don't matter, because they've already been paid...'
By magic, presumably. This is just sheer fantasy, the way villains in movies are already well established with an efficient organization. In Real Life, many businesses fail to meet payments on the "sunk costs", and truly SINK.
>>> '-- so everything gets pushed to marginal cost. That's pretty well accepted by most folks -- but it's still misinterpreted by many.'
No, it's a sitution "accepted" only by those who inherited, say, dad's $500M publishing empire!
>>> 'They tend to look at it and say that if price equals marginal cost, then no one would ever produce anything. That's a misconception that is at the heart of this whole debate.'
Er, since this is a pivotal assertion, I'll have to ask who ever said that. Myself and folks I know are well up on selling at a higher price than was paid, PLUS overhead.
>>> 'The problem is that they don't add in the element of time, and the idea that what drives innovation is the constant efforts by the producers in the space to add fleeting competitive advantages (what some economists have annoyingly called "monopolistic competition," a name that I think is misleading). In other words, companies look to add some value to the goods that makes their goods better than the competition in some way -- and that unique value helps them command a profit. But, the nature of the competitive market is that it's always shifting, so that everyone needs to keep on innovating, or any innovation will be matched (and usually surpassed) by competitors. That's good for everyone. It keeps a market dynamic and growing and helps out everyone.'
WELL, GOSH, Pollyanna! -- The world where I live, products are constantly /cheapened/ and workers pressured to accept less pay, factories moved to around the world if feasible. -- And apparently you've never heard of slavery, the "company store", mercantilism, the struggle for labor unions, the Pinkerton agency murdering strikers, sweatshops -- for you, Capitalism emerged pristine and pure from the void, and has only perfected itself since. -- GOOD GOD. Do you expect ME to believe that YOU even believe what you write there?
>>> 'So, let's go back to the "can't compete with free" statement. Anyone who says that is effectively saying that they can't figure out a way to add value that will make someone buy something above marginal cost -- but it's no different if the good is free or at a cost.'
AHAH. You aren't talking about manufacturing /here/, but retailing. FIRST, show me where I can find people who cover my "sunk costs", or since I'm not that into manufacturing, just where I can /get/ these free widgets from manufacturers who've already recovered their own "sunk costs". -- BUT THEN you casually glide into /manufacturing/ these magical zero-cost widgets:
>>> 'Let's take a simple example. Say I own a factory that cost me $100 million to build (fixed cost) and it produces cars that each cost $20,000 to build (marginal cost). If the market is perfectly competitive, then eventually I'm going to be forced to sell those cars at $20,000 -- leaving no profit.'
NO, SOONER than "eventually", you're $100 million SHORT! And at /that/ point you try to sell your products /at cost/! This may be why you're so optimistic: you state fixed costs and then /forget/ them! I can only suppose that you'll backtrack and say there was profit BEFORE the market reached this theoretical "perfectly competitive". -- YOU CANNOT MAKE THIS NOTION WORK WITHOUT ASSUMING PRIOR SUCCESS. -- In which case, why are you changing such good practices? "Market forces" suddenly bearing down on you? But didn't affect you before?
>>> 'Now, let's look at a different situation. Let's say that I want to make a movie. It costs me $100 million to make the movie (fixed cost) and copies of that movie each cost me $0 (marginal cost -- assuming digital distribution and that bandwidth and computing power are also fixed costs). Now, again, if the market is competitive and I'm forced to price at marginal cost, ...'
This is never the case. Prices are always above costs (or to try and recover costs) or the business fails.
>>> '... then the scenario is identical to the automobile factory. My net outlay is $100 million.'
WAIT A SECOND. WHERE THE HELL DID YOU GET THAT $100M? No interest or other capital costs? It's a crucial point and inquiring minds want to know.
>>> 'My profit is zero. Every new item I make brings back in cash exactly what it costs to make the copy -- so the net result is the same. It's no different that the good is priced at $0 or $20,000 -- so long as the market is competitive.'
EXACTLY. YOUR PROFIT IS ZERO. You've proven that "free" can't work.
How the hell did this bafflegab ever pass the laugh test?
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So, In Summary ...
Side B: “Giving away free stuff can mean you sell more for-pay stuff.”
Side A: “In that case, ‘free’ isn’t really free.”
Side B: “So what is it, then?”
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Re: Re: Re: Re: Why bother arguing this point?
Is it any surprise that people are turning to the illegal sources, or just turning away altogether?
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Re: Re: Re: Re: Re: This is subheaded "free-is-not-a-business-model"
I would give some examples here, but given your extremely well built reality distortion field, I don't think it will do any good. Simply read back through the comments and look at all the others.
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Re: Re: Re: Re: Re: This is subheaded "free-is-not-a-business-model"
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Re: Okay, think I gave you a fair shot, went and READ:
The "perfect market" scenario is where everything will head in a competitive environment. The entire point of the article is to show that business have been staying above the $0 profit margin because there are many factors which stop competitors from continuously undercutting prices until they hit rock bottom.
Apparently you think you've made a point, but all you've done is failed basic reading comprehension, and made it clear that you would fail a basic economics course.
Thankfully, nothing you ever write ever seems to pass the laugh test.
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Re: Re: This version of "free" only applies for those selling advertising!
A freebie giveaway of a sample of chewing gum isn't the same at all. Now, if Wrigley gave away their gum all the time for free, endlessly, with the hope of selling Wrigley t-shirts, well, it would be a good example. But what they are doing is occassionally giving away a small amount of their product to encourage people to try and buy more of the same product. They don't keep givingt it away for free.
Free as in free sample isn't new, it's as old as marketing itself. It's not unique to the online experience, nor is it the type of free that has been pushed on this site for years.
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Re: Re: Re: Re: Re: This is subheaded "free-is-not-a-business-model"
If that's what you got out of my writings, you really should recalibrate your reading comprehension sensors.
You're starting a Newspeak dictionary, right? Because above, you definitely mention venture capital for start-ups and mingle it with your "free". So, venture capital equals "free" too.
Dude. What?
If your big innovation of "free" is merely loss leaders and other advertising, do you think that new?
Nope. Never said anything in what I discuss is new. What I have said is that the digitization of many things has very much increased where such things can be applied.
Here's what I see as your formula: Get or make a low-cost widget that everyone wants, then find someone who'll pay you for advertising somewhere associated with it; or minor version, get someone to directly buy a real product somehow associated with some widget that you can give away at low or zero cost
Nope, not at all. Seriously, why make up shit?
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Re: Re: Re: This version of "free" only applies for those selling advertising!
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Re: Okay, think I gave you a fair shot, went and READ:
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Re: Okay, think I gave you a fair shot, went and READ:
Your inability to comprehend simple topics is impressive.
How the hell did this bafflegab ever pass the laugh test?
Try learning economics. Then let's discuss again. Until then...
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Re: Re: Okay, think I gave you a fair shot, went and READ:
Just tell me, from your movie example, WHERE THE $100M CAME FROM, and how marginal cost in then zero. Without explaining that, you're just lying about the rest.
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Re: This version of "free" only applies for those selling advertising!
Quote:
Source: http://www.japanesecellphones.com/news_update.html
See there the cellphone will be free LoL
WTF!
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Re: This version of "free" only applies for those selling advertising!
Source: http://www.japanesecellphones.com/news_update.html
WTF the competition is so fierce that companies pay customers to use them.
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Re: Re: Why bother arguing this point?
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Re: This is subheaded "free-is-not-a-business-model"
I hope you have lubricant this will hurt a bit.
Quote:
Source: http://www.japanesecellphones.com/news_update.html
I think Apple doesn't give free phones to Americans because to the Japanese they are giving it, and apparently for years now LoL
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Mike's example is of making a movie for $100M.
>>> How do people offer free phones then?
ARF! On services sold later. But MIke nowhere mentions any re-payment of start-up capital. Indeed, above, he mentions that without any /hint/ that it might have to be included in marginal costs; it's just "losses":
"The whole reason why startups need venture capital is to fund that initial period in which there are short-term losses. It's called investing in growth. Intel had to build fabs. Apple had to build computers. Those involved "short-term losses" to build the product. That's how these things generally work."
That's where MIke's ZERO marginal cost comes from. But in the real world, investors don't just forget what they've lent.
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Re: Mike's example is of making a movie for $100M.
Theaters, merchandise?
If you give free movies to people and increases sales and attendance is that not a good thing?
Wolverine was the most pirated movie of the year and made money accordingly.
And it was not just Wolverine every other movie that gets at the top of the pirates radar makes loads of money for some strange reason why?
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Re: Mike's example is of making a movie for $100M.
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Re: Mike's example is of making a movie for $100M.
It also doesn't address the control of the creation of the good to start with. Nobody will intentionally make an infinite number of anything if they expect to make money at it. Basic economics says that you look for a sweet spot between supply and demand and attempt to keep your production in line with demand, so that you can obtain a good return for your products. Flooding your own market would be incredibly silly.
It also doesn't address who is in control of the creation. Yes, the digital universe allows for illegal replication of certain goods, and that does create a market issue. But that issue only exists as long as you are willing to tolerate widespread illegal activities. It isn't the producer companies who are playing the infinite market card, it's the pirates and such that are driving this destructive trend.
Infinite distribution always fails because, like almost any system, when you push it to it's absolute limits, something breaks. In this case, it breaks the full business model of sunk costs, ongoing expenses, and retained value of the original product or design. An infinite number of copies makes the original product effectively worthless, because while people may value you it in some intrinsic way, they aren't going to pay anything for it because they already have an infinite number of them available to them.
The example is movies: They make X money in the theaters, Y money in the PPV / cable market, and Z in the netflix, retail, and other markets. They also make the long tail money, being used as filler for Spike TV on a Saturday night 10 years later, and so on. But if you start to eliminate markets because people already all have a copy of the movie, you eliminate income sources. The infinite doesn't just hurt one segment, it pretty much blows them all away.
Yes, people may pay some money for the theater experience, in the same manner that some people may feel paying $200 for a steak dinner is a good way to spend their money. But that is a very narrow market, and one unlikely to be large enough to pay for what everyone else is getting for free.
The other assumption is that there is always something else you can sell: Give away the movie, sell popcorn and t-shirts is the logic. Use your infinite product to leverage other businesses. This one also fails, because it implies high enough margins on these other goods to make up for what is lost. But we all know that this goes against the basic supply and demand situation, where people will not pay higher prices just because they got something for free. It is also likely that competition comes into the market place and undersells your high margin recovery product, leaving you in the dust.
The problem of infinite distribution and free is that, in terms of thesis or undergrad study, it appears to be workable. But the real world says otherwise, there is no magic creation of wealth, there are no massive new markets opening up, and there certainly isn't any more money kicking around the movie or music industries than there was even a few years ago as a result. In fact, without 3D, the movie industry would absolutely be on it's ass, with ticket sales down significantly. Only the increase because of 3D manages to hide the slide for now.
You are right too, investors look at the overall package, not some narrow part of the process. They put 100M in, they want at least 120M out. Giving the product away because you have the potential for infinite distribution just doesn't seem to lead to them getting their money back, does it?
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@ankle-biter: Investors are nowhere repaid in Mike's example.
Without investors being repaid, it's not even "capitalism", just hucksterism. Mel Brooks made his mark with the same (criminal) premise as Mike uses: "The Producers".
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Re: Re: Mike's example is of making a movie for $100M.
Which is silly, we all know that there are other revenue streams and you actually didn't answer why is that in a matter of fact people already have free access to those movies and apparently the most pirate are also the ones that make more money, so your assumptions are probably not based on factual observation of the market but suppositions, am I right or what?
:)
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@Nicedoggy: You're filling in the blanks that Mike left.
Show me where Mike has investors repaid.
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Re: Re: Re: This version of "free" only applies for those selling advertising!
Actually no, but your view of it is the ultimate lazy analysis, and the easiest. You view free-as-marketing as "shit, I'll give out free shit and see if anyone comes back for the more expensive shit!" And that's not it at all. "Free" as marketing actually requires way more work for it to work well, and is one of the more difficult models...and most effective. As just one example, giving away GOOD, FREE products or services can build loyalty in a way that selling even well-made or well-done stuff ever could. Once you give you money over, and you're given what you bought, THEN the parties walk away--the relationship is closed at that point, absent some hook that keeps them coming back. Of course, the better purveyors will have more returners than the lesser ones, but the transaction is still a closed universe.
On the other hand, a free transaction leaves open-ended whether the recipient of the free stuff wants to continue a relationship with the offeror--the recipient is left in a position of feeling something like "owing" to the offeror, and that feeling isn't one that then goes away if he or she returns for a single purchase--there's still an imbalance in the relationship, since the recipient (and now purchaser) has still retained a free benefit from the offeror. So that recipient is now more likely to either return for another purchase (assuming good goods/services) or do something beneficial for the offeror, like post a good review online or refer a friend. See that, how it creates a more lasting bond than the simple quid-pro-quo of a straight-up sale?
Like most things, then, it's worth the work--but you have to do the work. Like, for example, how much better my analysis is than yours--mine was harder to come to and explain, but worth it. Yours kind of sucked.
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Re: Re: Re: Mike's example is of making a movie for $100M.
One has to wonder what type of money they would be making without piracy. I am suspecting much more, not less.
You said: " your assumptions are probably not based on factual observation of the market but suppositions, am I right or what?"
Me: because the economy and market place cannot be stopped, pulled apart, and inspected, we all have to work at a certain from from suppositions. We have to observe what is going on, and draw conclusions.
My opinion is that you (and many others here) make the mistake of confusing the cause and the effect. Piracy isn't making movies popular, movies are pirated because they are popular. You don't see huge amounts of file trading in Nina Paley's epic failures, but you do see plenty of people wanting the latest transformers movie.
If a product is desirable, the people will work whatever paths are good for them to get it. Piracy provides a zero cost option that more and more people are taking. Piracy doesn't suddenly create people wanting to go see the same movie in the theater just because they saw it at home.
The popularity of the movie isn't caused by piracy, the piracy is caused by the popularity of the movie. If you can't get that simple concept straight, it's pretty each to get confused. The tail does not wag the dog.
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Re: Mike's example is of making a movie for $100M.
*sigh*
Look, this is why it's important for you to at least learn some basic economics so you don't look like a fool.
(1) I am not ignoring the fixed costs. I am pointing out that they do not matter in *pricing*. That's factual. You cannot debate that unless you want to be wrong.
(2) I am merely talking about pricing decisions.
(3) Obviously you have to look at the fixed costs in determining whether or not it's worth the investment and if you can recoup it.
(4) Nowhere do I say that you price *EVERYTHING* at marginal cost. You only price the things at marginal cost if there's a competitive market -- and with digital goods where there are infinite perfect copies, then you do have that situation.
(5) The whole point of what I'm talking about is that you focus on the areas where there IS NOT an infinite supply/perfect competition, and you price those *ABOVE* marginal cost, so you can make money.
(6) And from that you figure out how to cover your fixed costs. But it's not in the *pricing*. That's made in the initial go/no-go analysis.
ARF! On services sold later. But MIke nowhere mentions any re-payment of start-up capital
Because repayment of startup capital is meaningless in *pricing* decisions. I do cover it, but it's a separate question from pricing.
Here, let me give you a simple example that you will ignore or misunderstand: If I took $100 million from a VC and my competitor took nothing, and we each have identical products, and I tell you you have to pay $10 for mine because I need to pay back my VC, and my competitor offers his for $1. Which are you going to buy? You're going to buy his.
The fixed costs DO NOT MATTER in pricing decisions.
They matter in the overall business model, and of course the goal is to cover the fixed costs, but you have to do that by pricing the goods you *CAN* charge more than marginal cost for, rather than pretending that you can jack up the price on something the competition will kill you on.
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Re: Re: Re: Re: Re: Re: Re: Why bother arguing this point?
I was wrong before when I said they only have the promotion piece left to them. They also have their back catalogs. As time marches forward those will become less relevent.
Where we differ is you giving the labels a chance. If you have ever met any label execs, they are pompass, think $100,000 USD owed to arists is a rounding error, pay lip service to the artists that make them money, and think people owe them a living.
The labels and studios have set up rules, laws, and contracts that make them incapable of changing course. Bring you kids favorite US bought DVD on vaction and try and play it in europe, you end up with a screaming child and really pissed off. Pay for a music streaming service in europe and come to the states ... oops it doesn't work. These contractual fiefdoms they have set up will also play a huge role in their downfall. It causes in fighting and inflexibility.
The mentality mixed with rules and laws trap they have built for themselves, make them incapable of changing anything. I am normally an up beat person that sees the upside and potential in situations. But in this case I have to differ with you on this one point, they really do not stand a chance.
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"The fixed costs DO NOT MATTER in pricing decisions."
You picked a movie example. They're not necessarily a commodity the competition can kill you on.
In this very piece, you casually lump in start-ups, saying they'll take "short-term losses". It's just plain no good to brush that aside in /your/ example and say it doesn't matter.
"1) I am not ignoring the fixed costs. I am pointing out that they do not matter in *pricing*. That's factual. You cannot debate that unless you want to be wrong."
I don't accept your assertions. In the movie example from the other piece, you plainly ignore the fixed costs. And to say that fixed costs don't matter in pricing, then just a bit later say they do for /other/ items, that's just double-talk and double think. -- WHAT YOU MEAN is that you take a widget from nowhere and keep it in isolation, proclaim that it has zero cost, is completely without connection to the business, and /that/ proves "free" works as a business model.
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Re: "The fixed costs DO NOT MATTER in pricing decisions."
Dude. Seriously. Stop posting until you learn something.
I did NOT say that fixed costs matter in pricing. They don't. They matter solely in the investment decision.
Again this is fundamental BASIC economics.
WHAT YOU MEAN is that you take a widget from nowhere and keep it in isolation, proclaim that it has zero cost, is completely without connection to the business, and /that/ proves "free" works as a business model
No. I don't mean that at all, and I've never said that, because I've never said that "free" is a business model at all.
Seriously dude. Stop digging yourself a deeper hole. You look foolish.
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Your assertions only stand up when not questioned.
Since this is /so/ simple, why not answer it directly? -- Where /is/ the prior profit in your movie example by which marginal costs are reduced to zero? All you do is say that "sunk costs" don't matter. Try telling that to the various kinds of sharks who loan money. A business has to meet those fixed costs all the time, not just when they feel like it.
And again, you're trying to distinguish this from loss leaders and other advertising, but it ain't visibly, only by bafflegab assertions.
I'm also waiting to see the promised explanation of how those "sunk costs" can nearly always be recovered. At least point me to it.
You can't just brush off the crucial stages of /start-up/ with a mere mention: "Also, it's the very basis of pretty much the entire venture capital industry. The whole reason why startups need venture capital is to fund that initial period in which there are short-term losses. It's called investing in growth. Intel had to build fabs. Apple had to build computers. Those involved "short-term losses" to build the product." -- You brush that aside when /inconvenient/ so that your example works. And you won't even say that Intel and Apple do not give away their products. When you won't concede the obvious, there's a reason.
But my main question on /start-ups/, even your movie example, is why is change needed if they've recovered fixed costs? Seems to me they should do more of same.
Now, prices aren't at all influenced by "fixed costs", eh? Even kids running a lemonade stand grasp that if you don't get more for the drinks than you paid for the ingredients, it's a loser, and they price accordingly. Sure, they get Mom and Pop to PAY for ingredients -- as your site may be paid for -- but it's obvious. They may have a bad location, make bad lemonade, get rained out, or get greedy and run the price up beyond what anyone will pay, but that's the lesson in economics. But in NO likely case do even kids act as you suggest and just disappear those costs as "sunk". In the business world, people who do ignore costs used to wind up in jail, but now they just go to the gov't for a bailout from taxpayers. Perhaps that's the types you're familiar with.
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Re: Re: Free for one =/= free for all
Trying again: once an author (or other creator) decides that free is part of their business model, people like Masnick jump on that and say "see there -- it works for him. Now if EVERYONE would only see the light, THEN piracy would no longer be an issue" blah blah
Masnick isn't the only one; there are many others who take that position. My response is: it's a logical non-sequiter that just because one person does it then everyone should do it.
I hope I made my point better.
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Re: Re: Re: Free for one =/= free for all
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Re: Your assertions only stand up when not questioned.
Not phony at all. You're coming off as completely clueless. I would guess that you would prefer to look clueful.
It's a common tactic of confidence men, along with dimunition and assertions of authority.
And making statements like that is a tactic of assholes.
Since this is /so/ simple, why not answer it directly?
I did answer you directly. And you misrepresented what I said every time.
Where /is/ the prior profit in your movie example by which marginal costs are reduced to zero?
The profits are in selling the *scarcities* over which there is not competition. As I stated (contrary to your assertion). You SELL the scarcity at a higher price and that's where the profits are.
All you do is say that "sunk costs" don't matter. Try telling that to the various kinds of sharks who loan money. A business has to meet those fixed costs all the time, not just when they feel like it.
You really come off as incredibly dense when you make statements like that. I explained, CLEARLY, that fixed costs (not the same as sunk costs) do matter for overall investment, but DO NOT MATTER IN PRICING.
For loansharks, money lent out is a marginal cost. So not sure your point, other than to prove your own cluelessness.
And yes, of course a business has to cover their fixed costs. That's WHAT I SAID. It's just that that doesn't play into PRICING, but it plays into strategy and the investment decision.
And again, you're trying to distinguish this from loss leaders and other advertising, but it ain't visibly, only by bafflegab assertions.
WTF is "bagglegab"? Made up words make you sound so smart.
I'm not trying to distinguish anything from loss leaders and advertising. In some cases (though not all) those are both perfectly good examples of the economics I'm talking about.
I'm also waiting to see the promised explanation of how those "sunk costs" can nearly always be recovered. At least point me to it.
Fixed, not sunk, costs are recovered by figuring out what scarcities were made more valuable and then selling those scarcities.
You can't just brush off the crucial stages of /start-up/ with a mere mention: "Also, it's the very basis of pretty much the entire venture capital industry. The whole reason why startups need venture capital is to fund that initial period in which there are short-term losses. It's called investing in growth. Intel had to build fabs. Apple had to build computers. Those involved "short-term losses" to build the product." -- You brush that aside when /inconvenient/ so that your example works. And you won't even say that Intel and Apple do not give away their products. When you won't concede the obvious, there's a reason.
Once again, you are conflating multiple things. I've never brushed anything aside. Of course, startup investment is important. But what does that have to do with anything? How much someone invested in you does not matter in pricing. I described that above, which you totally ignored. Why? I can't fathom.
And I *DID* say that Apple and Intel don't give away *all* of their products. But they do give away some. And that's the point I've made from the beginning. I've never suggested that anyone give away all of their products. Why do you pretend I have?
But my main question on /start-ups/, even your movie example, is why is change needed if they've recovered fixed costs? Seems to me they should do more of same
Because the *market* is changing such that there's more competition. You can't do more of the same when the market has shifted.
Now, prices aren't at all influenced by "fixed costs", eh? Even kids running a lemonade stand grasp that if you don't get more for the drinks than you paid for the ingredients, it's a loser, and they price accordingly
Um. DUDE. Price of ingredients is the MARGINAL cost. Not the fixed cost.
Seriously. Learn at least a the very basic's of economics.
But in NO likely case do even kids act as you suggest and just disappear those costs as "sunk".
Sunk costs are not the same as fixed costs. Seriously. Learn the basics.
Perhaps that's the types you're familiar with
Being a total asshole is not helping you look less like a complete idiot here.
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Re: Re: Re: Re: Mike's example is of making a movie for $100M.
And the end result is the same, record sales with or without piracy, that is strange isn't, it suggests piracy has no bearing on sales.
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I suspect you could be wrong, there is a finite pool of money out there and since even before this crazy talk about piracy people nowhere made the kind of money made today in the movie business I highly doubt that they would be doing any better.
Even though you are wrong, because we all know that promotion is key to good sales and even studies have shown that the exposure piracy brings have an positive effect on sales.
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So why you ignore facts?
Piracy has no apparent effect on sales of movies apparently since according to the industry they are having record earnings year after year. Even studies conducted by government agencies around the world have noticed that piracy can actually improve sales.
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We also see record profits accordingly to popularity in pirate sites, how can you say something is bad if you can't show any losses?
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You be wrong you can almost predict how a movie is going to do in the box office by the traffic generate on pirate sites and buzz in social networks, so I have to disagree, what drives people to buy things is their positive experience with something, if that was not true people wouldn't buy anything after going to the theater would they?
I mean they already saw the movie why expend money "buying" the DVD? why do people go multiple times to the theater?
Also there is the powerful force of culture how many people got to see a movie so they can understand comments made about it by others?
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Re: Your assertions only stand up when not questioned.
Would they try to sell lemonade in the same place? that is just dumb.
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"Sunk (or fixed) costs don't matter,"
HERE, you simply deny that those are synonymous, where that's clear THERE from context, the "or" makes them interchangeable, and in any case, as I return to that movie example: you say the fixed cost was $100M, and the marginal cost is zero, but you nowhere include -- I'll narrow it down here to /that/ example -- the wider context that completely invalidates the example. That ain't a minor oversight. As I've said, "sunk (or fixed) costs" could be 100 billion, and you say it doesn't matter.
As for the lemonade stand, "FIXED" is correct as it's near always a one-time deal. That was in my mind, but I concede on your quibble, hope you're happy at progress.
And I see you're now just trying to get me riled with vulgarisms, when the question is why you keep responding.
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TANSTAAFL
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Re: "Sunk (or fixed) costs don't matter,"
I will admit that it was inelegant wording. Sunk costs don't matter for certain things. Fixed costs don't matter for certain things. My mistake was implying they were the same. Sometimes they are, but they are often not -- such as in your example with the lemonade. Sunk costs there are not fixed costs.
As I've said, "sunk (or fixed) costs" could be 100 billion, and you say it doesn't matter.
They don't matter for pricing.
And I see you're now just trying to get me riled with vulgarisms, when the question is why you keep responding.
I keep responding because it's sometimes fun to respond to the totally clueless to keep me sharp. But enough of that. Good luck in life. You need the help.
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Re: Re: Re: Re: Re: Mike's example is of making a movie for $100M.
That's an appealing but pernicious linkage. Look, from the "content industry" view, they don't want /anyone/ viewing or hearing without paying up. My objection to that notion is the prices they want to gouge and the degree of arbitrary control they want to exert, plus that they pervert "law enforcement" to funnel money into their pockets, besides that making entertainment TOO cheap simply ruins morality through wasting of time. -- Now, that somewhat aside, if "sales" were the total of viewings, without any of what they or you wrongly term "piracy", it'd almost certainly increase their profits. Since, as Mike holds like any good "capitalist", the sole /goal/ is to increase profit margin, that surely can only increase profits, and so the industry necessarily and logically pursues their "outdated" model. -- The more I read here, the more I'm driven by logic to reverse my notions and adopt the industry view! -- Up to a point: I wish to see much more of the revenue actually going to performers, and not so much of it, and not merely to a few at the top, either.
At this point, I can only renew prior advice that one simply produce one's own entertainment (with as little copying as possible) and avoid all these vexing questions.
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Re: Re: "Sunk (or fixed) costs don't matter,"
I see you clearly since actually reading that and discovering your simplistic false premise.
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"Sunk (or fixed) costs don't matter ... for pricing."
Anyway. From right above, I just can't abide:
'As I've said, "sunk (or fixed) costs" could be 100 billion, and you say it doesn't matter.
They don't matter for pricing.'
That ain't a common notion or common practice, and to say the least, I don't accept it as true. So bold and bald an assertion is remarkable from one who hedges so often. But the opposite has been admitted above -- I think it has, this has become scrambled and I ain't going back -- in any case here it is flatly stated as (I hope) parting shot.
Now, I'm reasonably certain that nearly all businesses price their products or services /always/ with regard to their "sunk (or fixed) costs", even when those are LONG paid off because to get back into biz, it'd be a cost and they have a present value and maintenance and so on; prices are, in sum, vaguely gauged depending how many products they have and profit margin and other obvious variables. -- So that's what I believe to be absolute fact, and I'm sticking to it after what I view as total lack of explanation that yours is more than arbitrary definition that fits your example and various other notions. Since seems to be an absolute difference on a matter of fact and a crucial point, we may go round again.
And as soon as some other corollary of your flawed premises strikes me, or the mood does, I'll post more, and certainly likely just to get in the last post here.
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Re: "Sunk (or fixed) costs don't matter ... for pricing."
The truth is what’s true whether you “accept it as true” or not. Go take some lessons in basic economics, and then you can come back and try to open your mouth without looking like a fool.
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EAT CROW FOR BREAKFAST, MIKE.
So I'm enjoying a LAUGH this morning while you're still eating crow. YES, YOU ARE! You'd look yet more foolish responding now, may even dimly grasp that you should have just stopped much earlier, and can only vaguely hope that I'm seen as petty (which I'm happy to help by ranting here!). -- But I'M just labeled by a common phrase that I can change at will, have no "rep" to lose as you weirdly seem to think important. You just don't truly grasp that "teh internets" favors the petty in all ways, that's why the attempts to control it. -- The urge to dominate is irresistible to every petty autocrat with a web-site, which I'll point out is sub-text here!
And in conclusion: HA!
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Re: Re: "Sunk (or fixed) costs don't matter ... for pricing."
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Re: TANSTAAFL
"FREE" IS JUST A LIE used by commercial interests. They need to be held to strict definition: FREE means take all you want without any hidden TRICKS to actually get PAID for the giveaway. All they have to do is NOT LIE (including no fine print).
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Laid out as a cogent whole.
1) Mike keeps insisting that "sunk (or fixed) costs" don't matter for pricing decisions. I believe that they /do/, and that it's self-evidently so in practice.
2) Specifically for his examples, to just ignore those as if already paid and widgets come into being out of the void, to ignore that merely for the organization to exist involves substantial costs and efforts, that just plainly has no relation to the real world.
3) To simplify a "formula" (as I regard Mike's movie example to be /intended/) so that it actually has /NO/ input values is to just be WRONG; can't draw ANY conclusion from it. I've pointed out that his "sunk (or fixed) costs" do not at all figure into calculations, and he /agrees/ with that quite insistently! The trick he's using is to put out a specific figure to make it /appear/ as though there /is/ some linkage and a fixed formula! It's essential for his notions and that's why he defends the point so hotly.
4) You people will just have to trust that I've GOT the point that marginal costs approach zero for /SOME/ kinds of products. -- That's one reason why I despise Microsoft and its obscene profits. Despise most corporations. -- But it's not generally true, and yet Mike casually lumps Intel and Apple /right here above/ into his case, though I see his text in larger context TOO. -- It's the /juxtaposition/ itself that I find irrelevant if not deceitful. Those are mostly hardware sellers -- don't bother to point out associated software, that's just /trying/ to obscure my point: "infinite" goods doesn't apply to physical items. I hope that's nailed down. Therefore, as I've said several times, "free" is narrowly targeted to digital streaming and online services.
5) Now, the corruption of the word "free" has to be looked at. Several point out, approvingly, that it's used to lure in and hook on the /real/ products. I regard /that/ as a problem. It's a LIE AND A LURE. I object to it on philosophical and moral grounds.
6) Nearly all of advertising is merely tricks, the whole field to be despised. I think that self-evident too.
7) I object more to mis-use of "free" when it's commercial interests LYING to me out of greed. Corporations have no right to lie, though the legalistic claim that they do. I'm not a corporatist. Those are sheerly legal fictions that have gotten out of control and become a hazard to the people. Much of what's discussed here is exactly about corporations grabbing power.
8) In line with above, there's doublethink where those selling to you or limiting what you can grab off the internet are evil, while Google and others (which perhaps you're "invested" in or allied with or simply deceived by), though having the same goal of maximizing profits, are good and pure. Argument is constrained to only /how/ to maximize corporate profits! I regard that as a fundamental problem. Corporations must be good for /we the people/, that's their /sole/ justification. -- Philosophical point, just outlining my views.
9) Of course Mike doesn't like my picking at his example, claims I'm misrepresenting what he says. No, I rephrase and cast it as starkly as I can, but hold that it's accurate.
So here's the summary:
A) Mike's example in the "can't compete" piece is irrelevant at best.
B) "Free" is used more for lie and lure than literally "free".
C) So far as visible, Mike's schtick is mere narrowly targeted advertising.
D) Mike's version of "free" doesn't apply to physcial goods, THOUGH he ALSO seems to write AS IF does; he's the one conflating those.
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Occurs to me, you people don't even believe in free speech!
Even Mike. Instead of letting me just write what I wish and being confident in his own writing as adequate statement, he too has only various ways of saying "SHUT THE HELL UP".
Yot, you people pretend to be for freedom, but when it comes down to anyone expressing beliefs that oppose yours, you can't bear it being out there but reach for the nearest stick. -- That too, is one of the points I'm making here. It's a quite educational site.
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Re: Re: Re: Re: Re: Re: Re: Re: Why bother arguing this point?
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Re: "Sunk (or fixed) costs don't matter ... for pricing."
Your best bet is to treat those references not as a threat, but as an opportunity to improve yourself.
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Moon rocks cost nothing.
"Marginal cost" is an /abstraction/. It's only useful for /relative/ comparisons, not absolute, when /all else is equal/ within a /narrow/ context. To strip costs of any product from the connected organization is fantasy, a theoretical construct that /never/ occurs in real life.
The usage of "marginal cost" is: to find the "true" cost of an item, ignore all costs not /exclusively/ due to that one item. So "marginal costs" simply defines away all "sunk (or fixed) costs", and always approaches zero regardless how much it costs to get /into/ production so that you can produce even one item! It's a USELESS measure for the /whole/ business that needs to set prices simply to stay in business.
And see how nicely circular the definition is? It's called a tautology: "a statement true by its logical form alone", and is an elementary logic flaw (or more frequently, a scurrilous trick). Tautologies are quite popular in ivory towers: we're here in this ivory tower, therefore we're immune to logic.
Now you should see the flaws in Mike's insistence that '"sunk (or fixed) costs" have no effect on pricing'. It's logically TRUE, yet WRONG because of the FLAWED PREMISE that the /abstraction/ of "marginal costs" can be taken as an /absolute/.
Though simple and obvious once explained, tautologies can catch you out by the fact that they're /true/! My first real brush with this breaktakingly brazen trick was in arguing with an Engineer whether a certain factor y could be ignored; he stated that if x/(x+y) was one to a good approximation, then it proved that y could be ignored! We were arguing whether it /was/ a good approximation, and he simply defined away even the /possibility/ of arguing! That's chutzpah. When used by anyone claiming years of trained technical and math expertise, it's simply a TRICK, can't even be excused as a mistake.
By the way, I bet everyone, if were any, totally dropped off at the simple equation; too difficult for people nowadays, and that's why these simple tricks work. A tautology and the chutzpah to repeat it ever more insistently are about all that's needed to overwhelm the weak ignorant minds of today.
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Re: Re: "Sunk (or fixed) costs don't matter ... for pricing."
See my "Moon rocks cost nothing".
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Re: Re: Re: "Sunk (or fixed) costs don't matter ... for pricing."
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Re: EAT CROW FOR BREAKFAST, MIKE.
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Don't worry that I'm wasting my time, Mike.
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Re: Don't worry that I'm wasting my time, Mike.
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Re: Re: This is subheaded "free-is-not-a-business-model"
On the other hand, Apple is giving away iTunes for free.
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"Marginal costs" are a learned notion, not natural.
And Mike can't make his case for a /whole/ business based on "free", so he plays it both ways: "free" means a giveaway when he pitches it to readers here as customers, but of course customers PAY the business in some other way for the "giveaway" item. SHEER TRICK, as is all of advertising.
Which prefaces my NEW point here: ADVERTISING IS A TAX-DEDUCTIBLE EXPENSE. Never forget that dodging taxes is at the heart of corporatism. Accounting is a DULLEST but vital field, and "good" accountants are quite tricky: just look at the Enron collapse. Anything that can be put into the "advertising" category becomes less expensive when deducted -- not the product so much, costs are deductible too, but associated with a "giveaway" can be other items such that former profits are moved to the "loss" column. You get a multiplier effect with anything in "advertising", not only brings customers, but it's a black hole that can fund various projects, not least schmoozing with your pals at the topless bar while you discuss "business". So tax advantages are likely part of Mike's secrets -- if he has any.
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Re: Re: Don't worry that I'm wasting my time, Mike.
You should actually be ashamed to make such a trivial comment without the least bit of on topic argument but I bet you think you really zinged me.
Of course, Mike encourages such ankle-biting.
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Re: Re: Re: Don't worry that I'm wasting my time, Mike.
Actually, it was a nice way of saying "What the fuck are you rambling on about now, because you make very little sense to me."
You should actually be ashamed to make such a trivial comment without the least bit of on topic argument but I bet you think you really zinged me.
Nope. Not a bit ashamed. I really do think you maybe need to get out more often and socialize with real life people now and then, though. As, for being off-topic, yes it was, but then again I can't really tell what topic you are on in the first place, so...
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Re: Re: Re: Re: Don't worry that I'm wasting my time, Mike.
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Yes, Mike, you're only advising how to better advertise.
"All of the examples here involve cases where companies use free to bring in people and then sell that attention to advertisers."
If you'd stop there, at mere advertising, you'd be okay.
If you'd admit that "free" IS a trick, you'd be okay.
But you don't stop, you go on to a general case that "free" can be part of a "business model" -- a term I'm getting sick of: it just means sell some stuff for more than you paid plus overhead, and "model" is particularly annoying because A MODEL IS NOT REALITY. Further, you mention but don't detail manufacturing: you know how to make widgets is all, and of course those are fictional.
Above you mention Intel and Apple as general examples (I know you'll say you're responding there), but the juxtaposition of hardware companies is exactly the conflation that simply isn't true. Intel and Apple don't give away their hardware hoping to then sell services: it's been tried often and found simply not feasible.
So first requirement is a cheap giveaway item. Movies are excellent for your case, and you use them. Yet in
http://www.techdirt.com/articles/20110702/00271714940/theater-owners-still-oblivious-to-fact-tha t-they-can-compete-with-home-viewing.shtml
you complain about theaters: "The food prices are ridiculous." But if your notions worked, they'd show the movies for free and make all their money on concessions! -- I suppose you'll say they're just not doing it right, but I think the obvious conclusion is that if no one is doing it, there's good reason.
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Re: Re: Re: Re: Re: Don't worry that I'm wasting my time, Mike.
Heh. I didn't "confirm" anything. I didn't take your "bait" because I think your bug-fucking-crazy and I don't want to debate with you. Have a nice life.
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Re: Re: Re: Re: Re: Re: Don't worry that I'm wasting my time, Mike.
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Going on with "free" meaning sneak support by advertising:
I don't think that notion is going to hold up on "teh internets": there are ways around it (here, Noscript and a hosts file keep the site's ads off my screen, and also stops the hidden monitoring by Google and others through use of javascript). -- Computers allow advertising companies to be more SNEAKY than ever. But as knowledge spreads and resentment against all forms of online monitoring increases, the advertising supported notion can fall apart almost overnight through downloading Noscript and a simple hosts file. That seems likely to me, so "free" will fail to work.
* Parasites is a useful witty term (not mine but adopted) for secondary sites, particularly those using javascript, to do mysterious metrics or annoying in-your-face advertising functions.
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Re: Re: Re: Re: Re: Re: Re: Don't worry that I'm wasting my time, Mike.
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Re: Going on with "free" meaning sneak support by advertising:
Funny, since Mike appears to say exactly the opposite of what you claim: http://www.techdirt.com/articles/20100306/1649198451.shtml
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Re: Re: Re: Re: Re: Re: Re: Re: Don't worry that I'm wasting my time, Mike.
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Re: Going on with "free" meaning sneak support by advertising:
By the way, I rarely respond to ACs whether agree or not, and especially I'm not taking an "assigned reading" link to spend my time when one could summarize it if relevant. If one can't at least pick a handle to establish a history, then it's likely only one of Mike's sock puppets, as for instance the one last year who took stabs using the phrase "keep digging that hole", as Mike used above in this thread.
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False premises = fantasy.
Furthermore if the "sunk (or fixed) costs" have been paid off, it proves that Mike's notions aren't necessary! Just keep doing the same!
So how does Mike suggest that we get to "perfectly competetive"? -- He doesn't say, that's a mere detail. -- But what he DOES in practice is to throw in with Google, who pay him, and I'm sure that like all libertarians, Mike doesn't worry about Google getting a monopoly, because it'd be a "natural" monopoly since Google is obviously the best because it's got a monopoly.
If Mike does worry about monopolies, I can say definitely that it's rare, hasn't been evidenced in any of the several hundred of his re-writes that I've read. Though he frequently mentions corporate abuses of customers and illegal manipulation of politicians, it's merely put out as "news": he doesn't seem able to connect abuses with corporatism itself, in my view because he's an ivory tower idealist.
And no, I'm not even getting off topic, just connecting up Mike's fantasy of postulating a "perfectly competitive" market in which to place his example with his other visible statements about corporations -- and lack of statements as to what he'd do about bad actors in a market. That's why his movie example of corporation and products each in isolation is so important: not at all realistic.
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"I dunno. I use iTunes. I never paid for it."
Why does Mike quote my dare, then write he "dunno"? -- Because he wants to appear as though he's addressed the point, but of course ANY actual answer exposes him as either a fool or wrecks his whole "free" premise.
So he waffles and says he get Itunes for free. In sum, I find not answering except with "dunno" and then an irrelevant dodge is outright lying.
I'd like readers to just ask yourselves WHY he didn't answer the dare in the obvious way: by "admitting" that Intel and Apple do not give away their products. WHO THE HELL WOULD SAY "DUNNO"!?
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"use free to bring in people and then sell that attention to advertisers"
I pick that sentence out of the squishy mess of his first three or four paragraphs as seems Mike's real point is selling advertising.
First, he's made his own strawman argument: 'But here's the thing, no one is claiming that "free" is the business model.'
I don't think one can reconcile those two statements. Google does appear to offer "free" services as its business model. That Google is paid behind the scenes by advertisers is simply hiding facts, as radio and television came to do, because people don't want to be regarded as economic units, mere "eyeballs" who reflexively buy products after exposure to a name brand. And at other times, Mike at least advises to feature the illusion of "free", as in musicians giving away MP3s and instead selling T-shirts: a notion that I doubt is generally applicable.
The first requirement is a giveaway product that is nearly free. The second and inextricably linked requirement is that all financing and capital equipment have been paid for (somehow, an objection in itself: Mike dismisses those as "sunk (or fixed) costs"), so that the current product can be considered in isolation with only "marginal costs".
So that's why I bear down the fact that Intel and Apple don't use even the appearance of giving away their main product: "free" doesn't work for hardware -- unless there's some "service" attached to it by contract, as for phones.
If the field were restricted to advertising or near zero cost products, as a movie that's had a run in theaters, I'd have less objection to Mike's use of "free".
But then we get back to that Mike wishes his notions to be (thought) generally applicable, and so he won't even admit that Intel and Apple don't use "free" beyond a few engineering samples and review products to friendly press who are supposed to consider them as PAY to write glowing advertising. That's the seamy underside to advertising: Mike is a Pollyanna libertarian who doesn't seem able to even conceive of bad actors or underhanded shennanigans: instead he postulates "perfectly competetive" and as if existing corporations won't use every bit of possible leverage that doesn't actually land them in jail to edge out competitors and especially upstarts. So I object that his views don't take payola into account, either. And where he's tacitly advocating "dog eat dog capitalism" while the gov't stands idly by instead of making the playing field fair, he's just plain ignoring the examples of history: only the few on top want that kind of "market".
So, to sum up: Mike's examples are only for the field of advertising, relying on tricking the consumer with an illusion of free. Mike does, however, try to imply that Intel and Apple /could/ use "free" in a significant way.
And by the way, from a recent piece, Mike is NOT AT ALL against those selling advertising: http://www.techdirt.com/articless/20110712/03450915054/copyright-as-censorship-newport-television-ab using-dmca-to-try-to-silence-criticism.shtm 'I don't think the panics about "media consolidation" are really that reasonable in this day and age. ... As far as I'm concerned, if dinosaur media organizations want to merge, let them.' So as a practical matter, Mike is FOR /current powers/ in the field to grow even larger and totally control all advertising outlets in a given area.
And THEN Mike prattles about "perfectly competetive"! His TOTAL views just don't add up, people.
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On the lighter side:
My point is that Mike, who claims to have a college degree, uses only a few cliched vulgarisms, and his method of argument soon gets down to simply ad hominem attacks. You're free to say I'm no better: that's another cliched ad hom which in no degree raises Mike from the mire. Mike /pretends/ that he's an erudite /authority/, but doesn't grasp how responding in kind reveals him to not be. So, "it's okay when Mike does it" isn't adequate. That he /does/ use mere ad hom rather than loftily ignoring is foolishness at best, and I'm happy that he's so clearly illuminated here.
Examples from this thread. First and foremost is the tricky dodge of #52:
ootb: Intel, and Apple DO NOT GIVE AWAY THEIR PRODUCTS! -- I DARE anyone to say that they do.
mike: I dunno. I use iTunes. I never paid for it.
Follow that point through to #60 because Mike's 2nd major gaffe was to "double down" and try to claim it answered:
ootb: You DO NOT take the dare, only dodge ...
mike: Accurately answering the question is not a dodge.
3rd gaffe is in #69, the old quote-and-deny as if answered, then dismiss. My specific point here is that he introduces vulgarism in response to reason:
ootb: Here's what I see as your formula: Get or make a low-cost widget that everyone wants, then find someone who'll pay you for advertising somewhere associated with it; or minor version, get someone to directly buy a real product somehow associated with some widget that you can give away at low or zero cost
mike: Nope, not at all. Seriously, why make up shit?
4th gaffe is at #72, to try dismissing from "authority", then to leave, but he'll resume...
ootb: How the hell did this bafflegab ever pass the laugh test?
mike: Try learning economics. Then let's discuss again. Until then...
5th gaffe starts in #87, leads to his major flop here:
mike: *sigh*
Look, this is why it's important for you to at least learn some basic economics so you don't look like a fool.
And #90, another attempt at asserting authority (stick with me, building to the funny):
mike: Seriously dude. Stop digging yoourself a deeper hole. You look foolish.
#94 has another doubling down that he's NOT lying when obviously IS:
ootb: Thanks for showing your /phony/ concern for my rep.
mike: Not phony at all. You're coming off as completely clueless. I would guess that you would prefer to look clueful.
From same, a minor funny to note that Mike can't even copy and paste:
ootb: And again, you're trying to disttinguish this from loss leaders and other advertising, but it ain't visibly, only by bafflegab assertions.
mike: WTF is "bagglegab"? Made up words make you sound so smart.
And here the promised frat boy vulgarism from Mike, his ONLY real weapon in a war of words and wit, dispelling his pretense of suave urban sophisticate:
ootb: It's a common tactic of confidence men, along with dimunition and assertions of authority.
mike: And making statements like that is a tactic of assholes.
AND SO HERE WE ARE TO THE MAJOR GAFFE!
ootb: But in NO likely case do even kids act as you suggest and just disappear those costs as "sunk".
Mike: Sunk costs are not the same as fixed costs. Seriously. Learn the basics.
LEADING TO:
#99: Re: "Sunk (or fixed) costs don't matter," icon Mike Masnick (profile), Jul 1st, 2011 @ 5:41pm
ootb: THAT is copied from YOUR article "can't compete with free".
mike: I will admit that it was inelegant wording. Sunk costs don't matter for certain things. Fixed costs don't matter for certain things. My mistake was implying they were the same. Sometimes they are, but they are often not -- such as in your example with the lemonade. Sunk costs there are not fixed costs.
Mike scolded and insulted me to learn terms, then HAD TO EAT CROW and slither out dismissing HIS gaffe as "inelegant"! HA! Still laughing, Mike, it's a CLASSIC of asserting authority only to be caught by own words!
But Mike isn't yet done, can't resist another attempt at the last word:
#114: Re: EAT CROW FOR BREAKFAST, MIKE. icon Mike Masnick (profile), Jul 4th, 2011 @ 11:01pm
Keep digging, kiddo. This is hilarious.
Now, here's a question that requires an answer: Is Mike lying? It can't be mere sarcasm at this point in contentious debate, and if he has a habit of writing opposite of what's meant, then he's a /frequent/ liar. -- BUT if he's not lying, then I've his encouragement to continue!
Words have fixed meanings, Mike, and so does personal record. Your vulgarisms are now on permanent display, showing you missed most of academia.
So Mike's last gaffe here was to make for himself a bad alternative (which I think /is/ the true case): he's either doubly lying about NOT lying or you can't take anything that he writes literally. Sure, those who support him can /say/ that he's merely mocking, but in fact it's as bald as I state. Casual lies are quite revealing of character, at the very least means that lying is too deeply ingrained to even consider how it /appears/ to unbiased judgment.
Your lying is a big part of what I wished to elicit from you, Mike!
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Re: On the lighter side:
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A real world movie example.
"Now, let's look at a different situation. Let's say that I want to make a movie. It costs me $100 million to make the movie (fixed cost) and copies of that movie each cost me $0 (marginal cost -- assuming digital distribution and that bandwidth and computing power are also fixed costs). Now, again, if the market is competitive and I'm forced to price at marginal cost, then the scenario is identical to the automobile factory."
There are three major flawed premises:
1) Ignoring fixed costs.
2) Assuming distribution is also "fixed" and zero.
3) A "competitive" market that forces to price at marginal cost.
Those put conditions into fantasy, and he then "buttresses" it with his automobile factory example, implying both are then true! Yes, one fantasy proves the other. -- Just too fundamental of logic errors to NOT laugh at.
Here's a real world example I ran across last night: The movie "Gigli", which annoyingly has a name that doesn't follow usual rules of pronunciation. It "stars" Ben Affleck and Jennifer Lopez. It's said to have cost $53 million to make, and to have gotten $6 million at the box office. It's so feeble and stupid a production that it ruined what little there was left to careers of both, besides that the director apparently hasn't made another film since.
Now, how does Mike's nice neat example apply when this movie returned only a tiny fraction of its "sunk (or fixed) costs"? -- About the same, actually, because Mike would just IGNORE costs and go on to "prove" whatever he wishes. -- But how is he going to promote this turkey to get anything from it even with the mythical marginal costs of zero? -- Don't know. I'm not up on Mike's fantasy world: his economics are no more applicable to this world than those in "The Hobbit" fantasy world.
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Re: Re: On the lighter side:
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Re: Re: Re: On the lighter side:
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Re: Re: Re: Re: On the lighter side: @"Dark Helmet"
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Show me the money, Mike.
"[Masnick]: Having a product that is "free to the consumer" does not mean people won't commit to it at all. In fact, if you put together a smart business model, it could be the exact opposite. All of the examples here involve cases where companies use free to bring in people and then sell that attention to advertisers."
...[much elided]...
"[Muscat]: Almost never. Somebody alwaays pays. If healthcare is free, your taxes pay for it. If the flight is free, the extras aren't. If the search is free, the advertiser is paying.
Um. That's the whole point of using free as a part of a business model. Of course someone pays. That's what we're describing here. and then, at the very end, to throw in a "but someone pays!" Why didn't he consider those points earlier in the article?
[Muscat]: The only time when Free can really work for you is if you set your sights on having a specific outcome: acquisition.
Yeah, just like Google. And Facebook. And Twitter. Good grief."
The key points are that "companies use free to bring in people and then sell that attention to advertisers", "just like Google. And Facebook. And Twitter."
As I've already pointed out, Mike is simply saying that the ACTUAL version of "free" is a TRICK to get eyeballs for advertising. He speaks only to those looking for existing products by which to leverage tapping income streams, or in my term: GRIFTERS.
Mike's argument technique here is to aggressively feature the advertising tie in -- since it can't be denied. But the ones he notes are the ONLY kind of "businesses" for which "free" can actually work. Google, Facebook, and Twitter have in common a lure that attracts large numbers of people in more or receptive mood: they get inundated with advertising visibly, and behind the scenes are tracked and collated by computers to create a personality profile to target them better. (Google's real business is tracking people.) That's the logical extension of the consumer society.
(Relevant for the future: consumers should be upset over computerized monitoring, and WILL BE when its pervasive extent is generally known, and since by easy technical means they CAN avoid most advertising, the bottom may well drop out of the advertising biz, so that's another reason why I don't believe that "free" will work.)
Note that Mike is ONLY concerned with this consumer society; when it comes to the practices of manufacturers and how they might use "free", he "dunno", as I elicited above.
So Mike's version of "free" is useful only to advertisers able to target mass audiences. I'll consider that "FREE" MEANS SOLELY A LURE FOR ADVERTISING ESTABLISHED, as Mike affirms (yet tacitly denies because won't explicitly say that Intel and Apple don't give away their products), and go back yet again to his movie example from the "can't compete" piece:
Let's say we do have a movie in hand for which marginal costs are effectively zero because ignoring "sunk (or fixed) costs", ignoring distribution costs and overhead of merely existing too. -- NOW, HOW EXACTLY CAN "FREE" WORK FOR THE MOVIE BIZ? Making a movie available online does not bring in a single cent. That's been one of my objections to that (falsely premised and incomplete) example all along, and it's nowhere explained where ANY income flows. Mike only suggests vaguely to find a "business model" where income IS connected up.
But the movie biz is stubbornly set on the notion of direct connection between viewing and income, and as I've said, that old fashioned notion recovered the "sunk (or fixed) costs", so why should they change? -- Mike needs to show a "business model" in which a movie is given away free, and yet income flows in. It's a MAJOR POINT, and remember, the example is Mike's, so entirely up to him to make it practical. He's tried to patch that glaring flaw by saying the market has changed to "perfectly competitive", which doesn't explain anything and isn't true for movies, they're not interchangeable widgets.
Paraphrasing Mike: It seems totally ridiculous to go on for paragraph after paragraph discussing how free is GREAT, but not show in his example how anyone PAYS.
Summary: "free" only works when advertising is sneaked in, and the technical means to do that are what has changed. Mike's movie example has NO INCOME method even in outline, so it's EMPTY OF MEANING.
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Re: Show me the money, Mike.
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Re: Re: Show me the money, Mike.
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A contrast in motives.
But my point here is that philanthropy is not, as Mike seems to assume, a motive for /industries/. So "free" is never going to move them: let's just set idealism aside. It seems Mike is speaking to two audiences: idealistic "upstarts" who have few resources and are hoping for some fairly literally magic to catapult them into riches; the other audience SEEMS to be those intent on cornering advertising on the web, let's just say Google. Now, as above, Google is simply tricking and tracking its /apparent/ customers: its real customers are of course advertisers.
So in unflattering terms: Mike targets idealistic simps and corporate globalists. There's no contradiction because the latter group would certainly use the former as cover while having zero intent of philanthropy.
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Re: A contrast in motives.
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Re: Re: A contrast in motives.
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Today: Mike's polemic style.
Mike's first paragraph is typical, laden with pejoratives and diminutives:
"Jim Harper points us to a blog post by a guy named Richard Muscat, supposedly debunking the problems of "free" as it comes to business models. Frankly his post is pretty weak. It rehashes a bunch of arguments that have been debunked plenty of times before, but since we keep seeing these arguments made, I figured I'd use Muscat's piece to explore why it is that those who don't understand the concept of free are condemned to make such bad arguments against it."
Taking out the little bit of substance leaves MOST:
"... a guy named ... supposedly debunking ... Frankly his post is pretty weak. It rehashes a bunch of arguments that have been debunked plenty of times before, but since we keep seeing these arguments made, I figured I'd use Muscat's piece to explore why it is that those who don't understand the concept of free are condemned to make such bad arguments against it."
Mike makes no pretense at objectivity. Nor does he allow readers (preaching to the choir here, of course) any chance of reaching their own conclusion.
Also note that if Muscat didn't write, then Mike wouldn't have anything to put here. Mike is variously a critic and a consumer, styling himself as highly cultured and therefore a measured authority. But his fondness for "remixes" and "mashups" is due to inability to create anything of his own: he's a second-hander. -- And that face grates on him, so in attempt to relieve it, he's developed a whole mythology to justify cultural and material grifting. (As do The Rich, styling themselves as the movers and shakers of society, when mostly parasites upon it.)
With MY premises in mind, Mike's writing from second paragraph on is at best condescending, dripping with contempt. He's not even entertaining or original at that, just ineffective, like an ankle-biter dog. So you fail as a polemicist, Mike. Anyone who doesn't start with your views won't be convinced.
Tomorrow's topic (to keep "Dark Helmet" trolling this thread): where ARE the "free" products?
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Re: Today: Mike's polemic style.
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Re: Re: Today: Mike's polemic style.
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So, Mike, where ARE the "free" products?
2nd, I consider to have demolished application of this to real hardware -- unless of course there's a service contract with it, obviously, and that's only another ancient technique. But in no other cicumstances does any manufacturer give away more than a few samples. (Again, Mike won't explicitly state that obvious fact and that's the /interesting/ point.)
So that essentially leaves the digital realm of software and entertainment.
I'll sum up the obvious concessions I need to make by emphasizing the /obvious/ that Google, Facebook, and Twitter are all selling advertising (as do some with it embedded in specific programs), as did Netzero and Juno.
So that's WHERE "free" products ARE: only on the net. [There's no need to elaborate on the coming wonders of "cloud" computing, because it's the same, only with drawback of voluntarily exposing ALL of one's information to the host (plus gov't), besides the risk of relying on that host for crucial services. Since there's no /need/ for a "cloud" when everyone has a supercomputer on their desk, drawbacks prohibit its use for anyone with common sense.]
Problem with all "free services" on the net is that can only be supported indirectly by advertising, yet exposure to advertising has to be explicitly accepted AND at least considered neutrally, otherwise won't be anyone buying. Anyone who merely endures the ads in order to get the free product isn't in the desired state of mind.
So that leads to trying to be unobtrusive (or SNEAKY): first in hiding the "deal" that users look at advertisements, second in keeping the ads from being too annoying. When the "deal" becomes too noticeable, it loses effect as above.
And when the company's true purpose is yet more hidden -- as for Google, Facebook, and Twitter -- of not only advertising but tracking and selling browsing habits to anyone with cash, including gov't, then that "deal" is almost certain to fall apart. I see that coming relatively soon. For instance, the NoScript add-on to Firefox (after removing Google from its whitelist) plus a "hosts" file simply cuts out most of Google's ability to track across the web and plant ads, so its "business model" could collapse overnight. Relying on the stupidity of targets has historically been a workable strategy, but this /is/ a new age on the net: information spreads rapidly, means to fight back are available, and so it's not difficult to undermine Google entirely.
But, perhaps I'm overlooking something, Mike: this time, though, instead of a few samples, give me a regular source of FREE hardware products, meaning as much as I want, no hidden charges, including no shipping.
[And now, the site's prime "Insider" troll, "Dark Helmet" will probably do his feeble one line...]
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Re: So, Mike, where ARE the "free" products?
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So, Mike, where ARE the "free" products? Part 2.
To be clear, I think it's the /advertising supported/ model itself that won't allow "free" to work for much longer. Remember that indirect income from advertising is KEY to Mike's notions. My conclusion is that he's actually still living in the 20th century, thinking audiences are captive and will put up with the "deal" that made "free" television and radio programs possible.
BUT: 1) Advertising has gotten noticeably more annoying in the last decade or two; it's now a frequent topic in itself. Everyone knows the term "product placement", so when a brand name is shown prominently (more often, awkwardly) in a movie, it's probably a turn-OFF, especially if the movie stinks.
2) Advertising is now /avoidable/ through at least the following ways:
a) Remote TV controls that allow easy channel-hopping.
b) Multiple sources of entertainment reduce numbers of viewers at any one spot.
c) Various recording devices that enable skipping over commercials.
d) DVD ripping software that delete trailers and other advertising. The little bit of time it takes to start ripping rather than direct play is well rewarded by time saved. -- Torrents are I think ALWAYS free of such.
e) Torrents of current TV shows from which commercials have been edited out.
f) The Firefox Noscript extension that turns off Javascript selectively. -- Note that Google PAYS to sneak itself onto Noscript's initial white list!
g) A "hosts" file that simply and entirely prevents your computer from accessing listed domains: when those are ad servers, no ad images are seen.
Focusing on Google because it's obnoxious, omnipresent, and most of its major purposes are invisible: Google greatly depends on NOT being seen as advertising (less true in current social network phase). The few paid ads visible on its search page are a tiny fraction of its income, yet a large part of perception. I think it significant that Google IS hiding its income sources (you can say it's incidental, doesn't affect conclusion): ADVERTISING IS HATED BY CONSUMERS.
Advertising in the modern world is simply exhortations to buy silly luxuries that you don't need, a horrible materialism. Sheer consumerism has been the major focus of advertising since at least the 1950's. At present a "recession" or worse is coinciding with growing cognizance that gadgets don't satisfy, and growing perception that corporations are in cahoots with gov't driving us madly toward a high-tech police state (Google's tracking is a key part). The sum seems likely to result in anti-corporate backlash.
---------- And (yet again: I don't mind repeating), specifically to Mike, Google, and his views on advertising: Google PAYS him to have ads here. Since Mike wrote the below impeaching a certain anti-Google hack because PAID, I say that his own enthusiasm for Google is directly due to money received:
"Cleland, as we've discussed in the past, is known throughout DC policy circles as the official attack dog of every anti-Google company out there. He's literally paid to make up attacks on Google, no matter how ridiculous."
http://www.techdirt.com/articles/20100913/12231510990.shtml?threaded=true
By the way, a bit more from me there: http://www.techdirt.com/articles/20100913/12231510990.shtml#c187
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Re: Re: Tim Geigner exposes self.
http://www.techdirt.com/articles/20100927/22032911187/our-own-dark-helmet-shares-lessons-from-cr owdfunding-experiment.shtml
"It's Tim Geigner, whose name may not be that familiar to you, but his alter ego Dark Helmet has been one of, if not the most prolific commenters on Techdirt, where he tends to play the role of comment enforcer, keeping people (including me at times) in line, when he feels anyone has spoken without thinking."
And yet Techdirt's "comment enforcer", Tim Geigner, aka "Dark Helmet", wrote in #46 above: "There are white people, then there are ...". -- That can only be taken as racist. I suppose he was reaching for the worst epithet of the few that he has. Reflects badly on the site. Scratch an "Insider" here, and out pops a vicious little weenie.
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Re: Re: Re: Tim Geigner exposes self.
Dear lord you're dense. That's a quote from Barack Obama, moron. Haven't you noticed that I've been trolling you w/Presidential quotes these past couple of rounds?
Read my lips. No new taxes....
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Re: Re: Re: Re: Tim Geigner exposes self.
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Re: Re: Re: Re: Re: Tim Geigner exposes self.
You accused me of being racist. That was horribly, horribly wrong. Care to apologize?
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Trolling necessitates REPEAT of previous post.
And unlike Tim Geigner flinging pejoratives at random, all of the above tags are substantiated merely by skimming his Techdirt profile comment history. -- One might THINK that Tim Geigner wouldn't wish for his real name to be directly and often associated with "Dark Helmet" the vulgar puerile racist trolling this site with trivia, as easily found by a Google "vanity" search, but perhaps he believes any publicity is good publicity.
I'm somewhat keen on the subject of trolling (actually, on how to ensure civil discourse isn't interred on the "inter-net", ha), and particularly in those who troll their own site; that occuring on Arse Technica (sic) is what led me here to Techdirt. I've written here extensively on the topic and give proposed rules (most easily computerized) to try and prevent trivial trolling such as Tim Geigner's vulgar one-liners in: http://techdirt.com/articles/20110412/1526158979.shtml
Mike hasn't taken my advice, and no wonder! He regards Tim Geigner the self-confessed troll as "comment enforcer"! Also, as I complain of above, Mike Masnick himself trolls his own site with vulgarisms and overbearing assertions of "authority" to attempt to suppress dissent.
Anyway, a decent respect for the opinion of mankind -- in the absence of the web-site owner making any effort to prevent Tim Geigner trolling with random insults and nonsense in attempt to suppress my on-topic substance -- makes this preface of defense necessary, but now back to the topic:
Laid out as a cogent whole.
From out_of_the_blue, Jul 2nd, 2011 @ 7:23am
I'll try to unscramble my case. Mike and others have done their best to obscure, in large part by repeating what I object to as if I just don't get it, and various other attempts to dodge answers and divert me from my theme. I put in a few bits of ornament that I shouldn't have, but characterizing is I think accurate; more importantly, I didn't have my case all at once, and that was BECAUSE I gave Mike a fair shot to convince me; so halfway along I READ his "can't compete" piece and THEN found a major LACK in its example premise -- so, starting with that:
1) Mike keeps insisting that "sunk (or fixed) costs" don't matter for pricing decisions. I believe that they /do/, and that it's self-evidently so in practice.
2) Specifically for his examples, to just ignore those as if already paid and widgets come into being out of the void, to ignore that merely for the organization to exist involves substantial costs and efforts, that just plainly has no relation to the real world.
3) To simplify a "formula" (as I regard Mike's movie example to be /intended/) so that it actually has /NO/ input values is to just be WRONG; can't draw ANY conclusion from it. I've pointed out that his "sunk (or fixed) costs" do not at all figure into calculations, and he /agrees/ with that quite insistently! The trick he's using is to put out a specific figure to make it /appear/ as though there /is/ some linkage and a fixed formula! It's essential for his notions and that's why he defends the point so hotly.
4) You people will just have to trust that I've GOT the point that marginal costs approach zero for /SOME/ kinds of products. -- That's one reason why I despise Microsoft and its obscene profits. Despise most corporations. -- But it's not generally true, and yet Mike casually lumps Intel and Apple /right here above/ into his case, though I see his text in larger context TOO. -- It's the /juxtaposition/ itself that I find irrelevant if not deceitful. Those are mostly hardware sellers -- don't bother to point out associated software, that's just /trying/ to obscure my point: "infinite" goods doesn't apply to physical items. I hope that's nailed down. Therefore, as I've said several times, "free" is narrowly targeted to digital streaming and online services.
5) Now, the corruption of the word "free" has to be looked at. Several point out, approvingly, that it's used to lure in and hook on the /real/ products. I regard /that/ as a problem. It's a LIE AND A LURE. I object to it on philosophical and moral grounds.
6) Nearly all of advertising is merely tricks, the whole field to be despised. I think that self-evident too.
7) I object more to mis-use of "free" when it's commercial interests LYING to me out of greed. Corporations have no right to lie, though the legalistic claim that they do. I'm not a corporatist. Those are sheerly legal fictions that have gotten out of control and become a hazard to the people. Much of what's discussed here is exactly about corporations grabbing power.
8) In line with above, there's doublethink where those selling to you or limiting what you can grab off the internet are evil, while Google and others (which perhaps you're "invested" in or allied with or simply deceived by), though having the same goal of maximizing profits, are good and pure. Argument is constrained to only /how/ to maximize corporate profits! I regard that as a fundamental problem. Corporations must be good for /we the people/, that's their /sole/ justification. -- Philosophical point, just outlining my views.
9) Of course Mike doesn't like my picking at his example, claims I'm misrepresenting what he says. No, I rephrase and cast it as starkly as I can, but hold that it's accurate.
So here's the summary:
A) Mike's example in the "can't compete" piece is irrelevant at best. B) "Free" is used more for lie and lure than literally "free". C) So far as visible, Mike's schtick is mere narrowly targeted advertising. D) Mike's version of "free" doesn't apply to physical goods, THOUGH he ALSO seems to write AS IF does; he's the one conflating those.
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Re: Trolling necessitates REPEAT of previous post.
Ok, seriously? This is dangerously close to libel. I'm a self-confessed RACIST!!??? Do you even realize what you're doing in trotting out such pejoratives? I may not like you, ootb, and I may have been having a bit of fun w/you on this old thread, but your response is to call ME out for flinging insults and then falsely state that I'm a SELF CONFESSED RACIST!!?? And sexual deviant?
I'm going to ask you nicely to stop this. I'll not "troll" you anymore, as you've requested, but you MUST not lie about me any further, at least about such touchy and important subjects as racism. Frankly, that's just a low blow accusation. Please do not repeat it....
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Re: Re: Trolling necessitates REPEAT of previous post.
I make no bargains, sonny, and I certainly don't wish you to stop trolling the site. You prove my points for me, besides lower the value of the site with your vulgarity. I noticed after my long absence that nearly all women and better writers have gone. Vulgarity drives people away, even today.
By the way, I've also found this in your permanent record (and I'm only back to April or so -- it's a gold mine for a lawyer):
"And you won't find all that much in the way of folks really crying about being called names around here, because no one really cares."
You're simply not consistent -- at least not externally.
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REPEAT OF On the lighter side:
-----------------
For today's exercise in use of this "free" web-site, I'll highlight Mike's revealing gaffes and frat boy vulgarisms.
My point is that Mike, who claims to have a college degree, uses only a few cliched vulgarisms, and his method of argument soon gets down to simply ad hominem attacks. You're free to say I'm no better: that's another cliched ad hom which in no degree raises Mike from the mire. Mike /pretends/ that he's an erudite /authority/, but doesn't grasp how responding in kind reveals him to not be. So, "it's okay when Mike does it" isn't adequate. That he /does/ use mere ad hom rather than loftily ignoring is foolishness at best, and I'm happy that he's so clearly illuminated here.
Examples from this thread. First and foremost is the tricky dodge of #52:
ootb: Intel, and Apple DO NOT GIVE AWAY THEIR PRODUCTS! -- I DARE anyone to say that they do.
mike: I dunno. I use iTunes. I never paid for it.
Follow that point through to #60 because Mike's 2nd major gaffe was to "double down" and try to claim it answered:
ootb: You DO NOT take the dare, only dodge ...
mike: Accurately answering the question is not a dodge.
3rd gaffe is in #69, the old quote-and-deny as if answered, then dismiss. My specific point here is that he introduces vulgarism in response to reason:
ootb: Here's what I see as your formula: Get or make a low-cost widget that everyone wants, then find someone who'll pay you for advertising somewhere associated with it; or minor version, get someone to directly buy a real product somehow associated with some widget that you can give away at low or zero cost
mike: Nope, not at all. Seriously, why make up shit?
4th gaffe is at #72, to try dismissing from "authority", then to leave, but he'll resume...
ootb: How the hell did this bafflegab ever pass the laugh test?
mike: Try learning economics. Then let's discuss again. Until then...
5th gaffe starts in #87, leads to his major flop here:
mike: *sigh*
Look, this is why it's important for you to at least learn some basic economics so you don't look like a fool.
And #90, another attempt at asserting authority (stick with me, building to the funny):
mike: Seriously dude. Stop digging yoourself a deeper hole. You look foolish.
#94 has another doubling down that he's NOT lying when obviously IS:
ootb: Thanks for showing your /phony/ concern for my rep.
mike: Not phony at all. You're coming off as completely clueless. I would guess that you would prefer to look clueful.
From same, a minor funny to note that Mike can't even copy and paste:
ootb: And again, you're trying to disttinguish this from loss leaders and other advertising, but it ain't visibly, only by bafflegab assertions.
mike: WTF is "bagglegab"? Made up words make you sound so smart.
And here the promised frat boy vulgarism from Mike, his ONLY real weapon in a war of words and wit, dispelling his pretense of suave urban sophisticate:
ootb: It's a common tactic of confidence men, along with dimunition and assertions of authority.
mike: And making statements like that is a tactic of assholes.
AND SO HERE WE ARE TO THE MAJOR GAFFE!
ootb: But in NO likely case do even kids act as you suggest and just disappear those costs as "sunk".
Mike: Sunk costs are not the same as fixed costs. Seriously. Learn the basics.
LEADING TO:
#99: Re: "Sunk (or fixed) costs don't matter," icon Mike Masnick (profile), Jul 1st, 2011 @ 5:41pm
ootb: THAT is copied from YOUR article "can't compete with free".
mike: I will admit that it was inelegant wording. Sunk costs don't matter for certain things. Fixed costs don't matter for certain things. My mistake was implying they were the same. Sometimes they are, but they are often not -- such as in your example with the lemonade. Sunk costs there are not fixed costs.
Mike scolded and insulted me to learn terms, then HAD TO EAT CROW and slither out dismissing HIS gaffe as "inelegant"! HA! Still laughing, Mike, it's a CLASSIC of asserting authority only to be caught by own words!
But Mike isn't yet done, can't resist another attempt at the last word:
#114: Re: EAT CROW FOR BREAKFAST, MIKE. icon Mike Masnick (profile), Jul 4th, 2011 @ 11:01pm
Keep digging, kiddo. This is hilarious.
Now, here's a question that requires an answer: Is Mike lying? It can't be mere sarcasm at this point in contentious debate, and if he has a habit of writing opposite of what's meant, then he's a /frequent/ liar. -- BUT if he's not lying, then I've his encouragement to continue!
Words have fixed meanings, Mike, and so does personal record. Your vulgarisms are now on permanent display, showing you missed most of academia.
So Mike's last gaffe here was to make for himself a bad alternative (which I think /is/ the true case): he's either doubly lying about NOT lying or you can't take anything that he writes literally. Sure, those who support him can /say/ that he's merely mocking, but in fact it's as bald as I state. Casual lies are quite revealing of character, at the very least means that lying is too deeply ingrained to even consider how it /appears/ to unbiased judgment.
Your lying is a big part of what I wished to elicit from you, Mike!
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Re: REPEAT OF On the lighter side:
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out_of_the_blue just hates it when due process is enforced.
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He's still doing it, fifteen months after the last comment!
You literally cannot make up this level of stupid shit.
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Re: Re: Re: This version of "free" only applies for those sellin
You don’t get to decide what TD means by “free” in a business model. Free samples are absolutely a viable example of “free” in a business model. And why does it have to be “new” or “unique to the online experience” to count? But still, I’ll bite.
Adobe offers their PDF reader software for free, but to create new PDFs from scratch or edit existing ones, you have to pay for additional software.
As mentioned in the article, Evernote, among many other apps, offers a free version that you have to pay to upgrade.
A number of musicians will give away free music in order to entice fans to pay for concert tickets or merch, which makes way more money for them than music sales ever did.
For years, every year, I used to get a free electric razor from some company in the hopes I would buy replacement blades for it at a markup.
I often get free credit cards in the mail, and they would eventually profit from the interest that gets charged when I use it. (Note: the plastic credit card itself was free.)
A lot of video games have free demo versions available (and trust me, a lot of work has to be diverted for that, and many demos are very different from the full game, and not just in scale).
Some games, like Doki Doki Literature Club, are available for free without any ads at all but offer special DLC for fans who want to support the developers.
Some companies offer their games, other software, or music for whatever price you want to pay, which includes free.
Need I get into Patreon?
I could go on, but the point is that a lot of business models involve “free” being used to entice new consumers that may pay for something else outside of free samples and advertising.
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WTF, Blue. I’m amazed at how much nonsense you stuck onto one article, how often you felt the need to repeat yourself for no apparent reason, how many extremely long comments you posted here, how much you refuse to understand what people are telling you, and how you simply cannot let this one joke go 8 years later. And why did you feel the need to summarize the entire exchange you literally just had with Mike in this very comment section after everyone else had left? People would have already read the whole thing before ever reaching your summation of events.
Not only that, but why did you think people will sympathize with you after reading this? Why do you keep asking people to come back and read all this? What do you expect to happen?
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Re:
There was even a phase when blue omitted his daily shitty pun username input, just so he could reply to any user who mentioned the word "blue", and claim it was a distant insult to the pseudonym he abandoned. Naturally, he did so from the perspective as a "concerned poster", speaking up in defense of a loathed user like a white knight.
He even went so far as to claim that the color blue used in First Word/Last Word segments was intended as a dig at him. And clearly not because Techdirt's logo and motif use the damn color. You can't make this shit up.
As for why he thinks all this callback will make people empathize with him... well, it's the kind of logic that works for the RIAA, so what could possibly go wrong?
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Re: Re: Today: Mike's polemic style.
For context (for people coming here nearly a decade later) this is an Obama quote.
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And ten years later, you’re still taking it.
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