5 ms·
The marginal cost of producing another unit of a digital good is close to zero. On the flip side, the cost of marketing that good is close to infinite.
by dilemma 10y ago
The marginal cost of producing another unit of a digital good is close to zero. On the flip side, the cost of marketing that good is close to infinite.
- orbat 10y agoProducing copies of an already existing digital good is, for all intents and purposes, free. Creating the original most definitely is not, and that's the issue here
- SixSigma 10y agoAn hour of labour is, for all intents and purposes, also free or 200 kcals of food at the most.
- randomdata 10y agoThe difference is the opportunity cost. It's easy to see what other opportunities labour has, it's not easy to see what other opportunities copying bits has, especially in the household capacity. I certainly don't see anyone asking to use my residential bit-copying facilities in any meaningful capacity, but I do see people asking to use my time.
- SixSigma 10y agoYour download server could be mining bitcoin and all those data centres are not free either.
- randomdata 10y agoIs the commodity hardware that people watch Netflix on really going to generate any money mining bitcoins? Or are they just going to rack up an expensive electricity bill?
- CaptSpify 10y agoAdditionally: I don't really have an "unused" amount of hours at the end of the day. I definitely have an "unused" amount of bit-copying capacity.
- ssalazar 10y agoNot really. The cost of skilled labor is related to the amount of experience and training required to be able to perform that labor as well as the supply/demand for that labor. Unless all these software engineers pulling down $200/hr consulting are lying?
- Retra 10y agoYou've got to pay me more the 200kcals to make me not live my own life for an hour.
- SixSigma 10y agoUntil you have 0kcals available. The surfeit of labour is coming.
- CaptSpify 10y agoI would argue that it's so close to zero as it should be considered zero. As to your second point: Any cost could probably somehow be considered infinite: profit, insurance, warranty, etc. So I'm not sure what you mean by that?
- dilemma 10y agoSince digital content is close to free to distribute (distinction, not free to produce) there is an ever expanding amount of content available, approaching infinity. To stand out in an infinite sea of content, the upper bound of what you would need to spend is an infinite amount on ads and marketing. This also works for products. The more a product or industry is commoditized, the more important marketing and branding becomes.