"reasonable expectation" is the reason they spent the time to start with. There is no entitlement, the market can give them a big thubms down and they make nothing. But they wouldn't intentionally go to market with a failing product, thus they have a reasonable expectation to make their money back at least.
Mike, let me add this: average costs don't figure into pricing, that is true, but it figures heavily into the question of if you are even in the market. If market price is a quarter, and your average cost is $1, you have to be a fool to be in that business.
Re: Re: Re: so what thre saying is the people they look at aren't smart yet
Econ 101 discusses this thing called Average Cost. You take all your up front costs, and all your variable costs (marginal costs x units produced) and put that all together, and divide by the units produced. That give you an average cost per unit. If your marginal costs are low, increasing the number of units will obviously lower the average cost.
Taken to the techdirt extreme, if you produce a near infinite number of copies of something for nothing, the average cost will approach (but never reach) zero, unless your fixed up front costs were zero.
Now, when you know what your market demand is (1000 copies), and you have your up front costs ($5000), and your marginal costs are 2 cents (for bandwidth), your cost per unit is $1.02. Now, if the market only supports pennies per copy, you either need to heck of a lot more sales, or it isn't worth doing the business to start with.
Y'see, if you look only at the marginal cost (2 cents) it is pretty easy to think that 10 cents is a good price... 5 times the money, wouldn't we all like it in our stock portfolio. But once you start looking at average total cost per unit, you realize that you can't do business at 10 cents and make a living. If that is all the market supports, you cannot come to market.
Taken now to the techdirt extreme, if you give away for free a near infinite number of copies, the average cost drops almost (but never completely) to zero. More importantly, no matter how you slice it, you are still out $5000.
If the bottom line doesn't work, you can't afford to be in that business.
Re: Re: Re: Re: Re: Re: more drivel from the f-ing idiot TAM
All I can say RD is that you missed it entirely, as you always do, and your rants are frigging hilarious. I can just picture you jumping up and down and throwing things, spitting on your screen as you type.
That is pretty much how a representative democracy works. You elect someone, you don't like the job they do, 4 years (or whatever) later, you vote them out and replace them with someone else (who probably won't do the job either).
You can kick up a fuss now, but unless it really gets national attention and people care, it is unlikely to change what will happen.
Ahh Mike, that is the difference between a classroom and real life.
How do you suggest that Ms Sobule recoup the costs of producing her album? She was luck in this case to essentially get donations, but what if she had borrowed the $75,000 from the bank? Would you want her to sell her music for pennies, even though she would never have a hope of recouping her costs?
Oh, wait, I forgot. You want her to sell miniputt games so she can finance her records, so that she can give them away for free.
Right, got it.
Real life explains why Itunes songs are more than a dollar instead of just a few pennies. The cost of making the music, of recording it, of turning it into a product, the artist time to write it, arrange it... it is amazing all those non-marginal costs that have to be recouped somewhere along the line. It's the marginal error, thinking that pricing is only based on marginal costs. Without the ability to recoup all those up front costs at some point, there is no product.
Can you explain otherwise? Very seriously, without mentioning t-shirts or other "scarcities", how would you do this in a normal business? I would love to hear your answer.
For the rest of your post, well, all I can say is that what you pretend to know about me is wrong.
Your talk of "freeloaders" shows how you miss the point. You may call them "freeloaders", but a more appropriate term is "fans". If you connect with fans (CwF), they will gladly give you their money.
That is what you are missing. Most of them don't give anything. Remember the the Radiohead thing? Average was about 5 pounds paid, but more than half paid nothing. Half of the people were just freeloaders.
Calling them fans is like calling mugging "wealth redistribution". It's a glass half full view of people who took something for nothing, and have no intention of paying for anything else either.
When the people who are paying start to understand that most people got it for nothing, they will stop paying..
Due to this awesome fact of $0 marginal cost, you can use it to sell something (that people want) that has a non-zero marginal cost, and the music adds value to that.
Alas, marginal cost isn't the only part of the per unit cost for music. Jill Sobule's $75,000 record would need to sell 7500 copies at $10 each to break even. The marginal cost may be zero, but the actual cost per until (for 7500) is $10. You are making the marginal mistake.
Re: Re: Re: Re: more drivel from the f-ing idiot TAM
When you stop understanding my posts, and stop trying to put words into my mouth, I will stop claiming that you misunderstand.
As long as you continue to be an arrogant moron, I will have to keep correcting you.
NOTHING IN YOUR STATEMENT SAID SHIT ABOUT THEATERS
Exactly. You added to my words and made it sound like I said something that I did not. Your words, not mine. See? When you do that, you put words in my mouth, get them wrong, and make yourself look like an asshole while doing it.
RD, you really are like a broken record. Once again, I am not in the music or movie industry. Let it go already. Get that stupid idea out of your head.
Fair use is something that more of less has to be asserted. It is incredibly hard to call fair use when someone is standing there giving a performance that includes singing (even for a short period of time). Maybe it is fair use, maybe it isn't. Why would Viacom want to fight it? Why would the producer of the show risk wasting a night worth of recording because part of the show can't be used?
I can really tell that you have never run a business or been in upper management (except maybe a McShiftManager), because you can't seem to think past your nose.
What you're calling stupid is a person finding value in someone else's work. Coming from you, I find that a tad hypocritical.
That's the point - they value the work, but they aren't paying for work, they are paying for some other thing that has supposed value (miniputt game, t-shirt, whatever) and not paying a penny for the actual work.
The value is in the music (as is the cost) but nobody is suppose to sell music anymore. They have to sell what most people don't value or don't want (stuff) in order to give the thing of true value to 10 out 10 fans (music) away for free.
You end up with 9 freeloaders and one guy paying for the rest of them to ride the bus.
person 10? he has no idea of the real value, and if he takes a moment to think, he will realize he is supporting 9 freeloaders. Then the value in his mind of the "scarce" thing goes down. At this point, there are enough 10th people to make this work, but like any shell game, sooner or later the marks get tired of being marks.
Nope, I understand perfectly. The value is artificial, it is beyond the true value of the product, and they are paying a higher retail price than the true value of the goods. Effectively, they are playing supply / demand games to create a market price that is above the true value, pumped up only by mostly artificial scarcity. They could always print more t-shirts or allow 5 more fans to get back stage passes, whatever their scarce good may be. The scarcity is effectively artificial, shrinking supply in the face of constant demand pushing up the price. The value is a slippery concept, but another freaking t-shirt isn't specifically valuable in and of itself.
Your one out of ten fans in your example obviously values the music more than the other nine.
nope, the other 9 love the music, they are just smart enough not to pay for it. They have already figured out that the value of the music is higher than what they are paying as the market price, which is zero.
Re: so what thre saying is the people they look at aren't smart yet
It's because 25 cents isn't a 500% markup.
If it cost even $5000 to record the song, and they sell 1000 copies, the actual cost is $1.02 per copy (your price). So they would be losing 77 cents per song at 25 cents per.
to even get it down to break even, they would have to sell almost 22,000 copies at 25 cents.
You are making what I considering the marginal mistake.
Some of the key points they've found so far are that fans are paying greater than $20 on average per band on its platform (more than a CD costs) and with big name "branded artists" that number is more like $50. But.. but.. but don't we keep hearing that no one wants to pay musicians any more? Apparently that's not true.
I read this, and all I could think of was the number of people who just don't buy at all. When your average is high, it is likely that you cut off much of the low end business.
It seems to run like I always say: Rather than collecting a few dollars from each fan because they want your music, you collect 10 times as much money from one out of ten fans who is stupid enough to pay over the value for it. The 10th guy is basically paying the free ride for the other 9. When the 10th guy figured it out, he too will stop paying, and then nobody is paying for the ride anymore.
On the post: Research Shows Unauthorized Digital Books Leads To 'Significant Jump In Sales'
Re: Re: Re: Re: Re: Re: Re:
"reasonable expectation" is the reason they spent the time to start with. There is no entitlement, the market can give them a big thubms down and they make nothing. But they wouldn't intentionally go to market with a failing product, thus they have a reasonable expectation to make their money back at least.
No entitlement, just their intentions.
On the post: Some More Data On How CwF + RtB Is Working In The Music Space
Re: Re: Re: Re: Re: Re:
On the post: Some More Data On How CwF + RtB Is Working In The Music Space
Re: Re: Re: Re:
On the post: Some More Data On How CwF + RtB Is Working In The Music Space
Re: Re: Re: so what thre saying is the people they look at aren't smart yet
Taken to the techdirt extreme, if you produce a near infinite number of copies of something for nothing, the average cost will approach (but never reach) zero, unless your fixed up front costs were zero.
Now, when you know what your market demand is (1000 copies), and you have your up front costs ($5000), and your marginal costs are 2 cents (for bandwidth), your cost per unit is $1.02. Now, if the market only supports pennies per copy, you either need to heck of a lot more sales, or it isn't worth doing the business to start with.
Y'see, if you look only at the marginal cost (2 cents) it is pretty easy to think that 10 cents is a good price... 5 times the money, wouldn't we all like it in our stock portfolio. But once you start looking at average total cost per unit, you realize that you can't do business at 10 cents and make a living. If that is all the market supports, you cannot come to market.
Taken now to the techdirt extreme, if you give away for free a near infinite number of copies, the average cost drops almost (but never completely) to zero. More importantly, no matter how you slice it, you are still out $5000.
If the bottom line doesn't work, you can't afford to be in that business.
On the post: Kevin Smith May Try Crowdfunding Horror Film, Red State, After Fans Offer To Do So
Re: hey anti mike
I would have to say you appear to be too stupid to even get your own schtick. When you are borrowing from RD, well, you have hit rock bottom.
On the post: Kevin Smith May Try Crowdfunding Horror Film, Red State, After Fans Offer To Do So
Re: Re: Re: Re: Re: Re: more drivel from the f-ing idiot TAM
You are a classic.
On the post: Kevin Smith May Try Crowdfunding Horror Film, Red State, After Fans Offer To Do So
Re: Re: Re: Re: more drivel from the f-ing idiot TAM
Blame that flaming asshole, don't bug me.
On the post: NBC Continues To Do The Exact Wrong Thing When It Comes To The Olympics Online
Re: Re:
Ask Google how much they make on Youtube, without having to pay for content. They don't claim to be making a profit on it.
On the post: Let's Face Facts: ACTA Is Called An 'Executive Agreement' To Change The Law With Less Hassle Than A Treaty
Re: Re: Re: Re: And yet again
You can kick up a fuss now, but unless it really gets national attention and people care, it is unlikely to change what will happen.
On the post: Let's Face Facts: ACTA Is Called An 'Executive Agreement' To Change The Law With Less Hassle Than A Treaty
Re: Re: And yet again
ACTA is whatever it is. If you don't like it, vote the bums out next time, that is the nature of democracy.
On the post: Some More Data On How CwF + RtB Is Working In The Music Space
Re: Re: Re: Re: Re: Re:
How do you suggest that Ms Sobule recoup the costs of producing her album? She was luck in this case to essentially get donations, but what if she had borrowed the $75,000 from the bank? Would you want her to sell her music for pennies, even though she would never have a hope of recouping her costs?
Oh, wait, I forgot. You want her to sell miniputt games so she can finance her records, so that she can give them away for free.
Right, got it.
Real life explains why Itunes songs are more than a dollar instead of just a few pennies. The cost of making the music, of recording it, of turning it into a product, the artist time to write it, arrange it... it is amazing all those non-marginal costs that have to be recouped somewhere along the line. It's the marginal error, thinking that pricing is only based on marginal costs. Without the ability to recoup all those up front costs at some point, there is no product.
Can you explain otherwise? Very seriously, without mentioning t-shirts or other "scarcities", how would you do this in a normal business? I would love to hear your answer.
For the rest of your post, well, all I can say is that what you pretend to know about me is wrong.
On the post: Some More Data On How CwF + RtB Is Working In The Music Space
Re: Re: Re: Re:
That is what you are missing. Most of them don't give anything. Remember the the Radiohead thing? Average was about 5 pounds paid, but more than half paid nothing. Half of the people were just freeloaders.
Calling them fans is like calling mugging "wealth redistribution". It's a glass half full view of people who took something for nothing, and have no intention of paying for anything else either.
When the people who are paying start to understand that most people got it for nothing, they will stop paying..
Due to this awesome fact of $0 marginal cost, you can use it to sell something (that people want) that has a non-zero marginal cost, and the music adds value to that.
Alas, marginal cost isn't the only part of the per unit cost for music. Jill Sobule's $75,000 record would need to sell 7500 copies at $10 each to break even. The marginal cost may be zero, but the actual cost per until (for 7500) is $10. You are making the marginal mistake.
On the post: CBC Gets Two Stories About George Lucas Totally Mixed Up
On the post: Kevin Smith May Try Crowdfunding Horror Film, Red State, After Fans Offer To Do So
Re: Re: Re: Re: more drivel from the f-ing idiot TAM
As long as you continue to be an arrogant moron, I will have to keep correcting you.
NOTHING IN YOUR STATEMENT SAID SHIT ABOUT THEATERS
Exactly. You added to my words and made it sound like I said something that I did not. Your words, not mine. See? When you do that, you put words in my mouth, get them wrong, and make yourself look like an asshole while doing it.
Perhaps you should just stop now.
On the post: Comedian Has To Retell Joke 2nd Time, Because Viacom Couldn't Have Him Sing Four Words: 'We Are The World'
Re: Re: Re: Re: Re: only 1 song in the world?
Fair use is something that more of less has to be asserted. It is incredibly hard to call fair use when someone is standing there giving a performance that includes singing (even for a short period of time). Maybe it is fair use, maybe it isn't. Why would Viacom want to fight it? Why would the producer of the show risk wasting a night worth of recording because part of the show can't be used?
I can really tell that you have never run a business or been in upper management (except maybe a McShiftManager), because you can't seem to think past your nose.
On the post: Some More Data On How CwF + RtB Is Working In The Music Space
Re: Re: Re: First Annual Cwf -(RtB) Party "TrollinTime!"
"My Mom CwF for years!"
I can see it now.
But make only one of each, and sell them for $10,000 each. But give them a sample loop of someone else music for free!
On the post: Some More Data On How CwF + RtB Is Working In The Music Space
Re: Re:
That's the point - they value the work, but they aren't paying for work, they are paying for some other thing that has supposed value (miniputt game, t-shirt, whatever) and not paying a penny for the actual work.
The value is in the music (as is the cost) but nobody is suppose to sell music anymore. They have to sell what most people don't value or don't want (stuff) in order to give the thing of true value to 10 out 10 fans (music) away for free.
You end up with 9 freeloaders and one guy paying for the rest of them to ride the bus.
person 10? he has no idea of the real value, and if he takes a moment to think, he will realize he is supporting 9 freeloaders. Then the value in his mind of the "scarce" thing goes down. At this point, there are enough 10th people to make this work, but like any shell game, sooner or later the marks get tired of being marks.
On the post: Some More Data On How CwF + RtB Is Working In The Music Space
Re: Re:
Your one out of ten fans in your example obviously values the music more than the other nine.
nope, the other 9 love the music, they are just smart enough not to pay for it. They have already figured out that the value of the music is higher than what they are paying as the market price, which is zero.
On the post: Some More Data On How CwF + RtB Is Working In The Music Space
Re: so what thre saying is the people they look at aren't smart yet
If it cost even $5000 to record the song, and they sell 1000 copies, the actual cost is $1.02 per copy (your price). So they would be losing 77 cents per song at 25 cents per.
to even get it down to break even, they would have to sell almost 22,000 copies at 25 cents.
You are making what I considering the marginal mistake.
On the post: Some More Data On How CwF + RtB Is Working In The Music Space
I read this, and all I could think of was the number of people who just don't buy at all. When your average is high, it is likely that you cut off much of the low end business.
It seems to run like I always say: Rather than collecting a few dollars from each fan because they want your music, you collect 10 times as much money from one out of ten fans who is stupid enough to pay over the value for it. The 10th guy is basically paying the free ride for the other 9. When the 10th guy figured it out, he too will stop paying, and then nobody is paying for the ride anymore.
Next >>