5 ms·

You're denying basic free market economics with an emotional argument. In a competitive market, the cost of a good tends towards its marginal cost of productio

by bediger 16y ago

You're denying basic free market economics with an emotional argument. In a competitive market, the cost of a good tends towards its marginal cost of production. We get all excited as the cost of solar cells tends lower and lower, as the marginal cost of their production gets smaller. Do we "value" solar cells less because of this? "the Internet is also breeding a generation of customers that used to value and support music & books, but now is merely parasitic." To borrow a phrase, "Citation needed".

robryan 16y ago
What about the upfront cost of production? It's all well and good to say each additional copy has tended towards zero but that still doesn't cover the production costs.
- DennisP 16y ago
  Simple. Pay it up front, release the files for free afterwards. The files turn into advertisements for the next piece.
  - davidw 16y ago
    Eh? Who pays up front? I think it's anything but "simple". There's a big incentive to free ride and let someone else pay.
    - _delirium 16y ago
      "Anyone who wants to" is one model, perhaps with some goodies thrown in for those who do. A bunch of musicians have been using that in various forms for the past decade or so (e.g. http://www.neubauten.org/?q=supporters-english http://www.neubauten.org/?q=supporters-english), and Kickstarter now sort of formalizes it.
      - davidw 16y ago
        I'm not convinced that that sort of model can support as much production, and thus we might see a lower level of production of information goods, but I suppose only the future will tell. Musicians always have the fallback of concerts, as I mentioned in another comment.
      - dagw 16y ago
        Blixa and Neubauten have a large and loyal fanbase from the decades they spent making music the 'old' way. Thus they (like NiN and Radiohead) can skip the hard "build a captive audience" step necessary for something like that to work. A new band no one has heard of is going to have a much harder time making something like that work, so as such it's not really comparable.
        _delirium 16y ago
        I agree it's not easy to pull off with no starting fan base, but isn't that true of breaking into the industry the old way too? An unknown band with no fan base is not going to have an easy time convincing an RIAA label to sign them and put out their album. I'm not sure their current problem (put out demos, find fans) is actually harder or lower-probability than the older problem was (put out demos, impress A/R person).
davidw 16y ago
The problem is that there are two "costs" of production: * The cost of reproduction - which in terms of software, music, and now books, is essentially zero. * The cost of producing those goods in the first place, which is very high in many cases. These are called 'sunk costs'. Prices are tending towards the cost of reproducing stuff, and people are struggling to come up with ways to cover actual production costs, which haven't really changed much. Now, certainly, in the past, there were no guarantees that if you wrote a book over the course of a year, that you'd be able to make up for a lost year's worth of wages, but at least you had a shot at it - and also a shot at earning several times that if you had a hit. If, instead, you spent a year writing a book, and it were easy, legal and acceptable (we're not quite there with all three) to just copy it all over the internet once it was released... where would you get your money from? This is all described pretty well here: http://en.wikipedia.org/wiki/Public_good http://en.wikipedia.org/wiki/Public_good
- _delirium 16y ago
  > struggling to come up with ways to cover actual production costs, which haven't really changed much The cost of buying food hasn't changed much, but the actual costs of doing the recording/release/distribution have decreased a lot, which lowers barriers to entry and increases supply. To produce a recording whose production values are seen by the average casual music fan as "good enough", and then sell an mp3, requires much less capital investment than putting out a decent-sounding record in 1975 would have, or even a decent-sounding CD in 1990. Sure, home recording on a Macbook isn't going to get you the quality a professional studio would get you, but the quality gap is much less than it used to be, especially for someone who spent some time reading (free) documentation on the subject. Rather than home recording producing unreleasable cassette demos, they're now often good enough to upload to YouTube or sell directly to fans. As a result, the people who've paid for professional studio time now have to compete directly with all those home recordings, whereas previously they could more or less ignore them. That drives down prices. Related, many artists actually put a negative value on their time: there are quite a few people who love what they do so much that they're actually willing to subsidize their own art-production by working other jobs (e.g. waiting tables).
  - 16y ago

by bediger 16y ago

robryan 16y ago

What about the upfront cost of production? It's all well and good to say each additional copy has tended towards zero but that still doesn't cover the production costs.

DennisP 16y ago
Simple. Pay it up front, release the files for free afterwards. The files turn into advertisements for the next piece.
- davidw 16y ago
  Eh? Who pays up front? I think it's anything but "simple". There's a big incentive to free ride and let someone else pay.
  - _delirium 16y ago
    "Anyone who wants to" is one model, perhaps with some goodies thrown in for those who do. A bunch of musicians have been using that in various forms for the past decade or so (e.g. http://www.neubauten.org/?q=supporters-english http://www.neubauten.org/?q=supporters-english), and Kickstarter now sort of formalizes it.
    - davidw 16y ago
      I'm not convinced that that sort of model can support as much production, and thus we might see a lower level of production of information goods, but I suppose only the future will tell. Musicians always have the fallback of concerts, as I mentioned in another comment.
    - dagw 16y ago
      Blixa and Neubauten have a large and loyal fanbase from the decades they spent making music the 'old' way. Thus they (like NiN and Radiohead) can skip the hard "build a captive audience" step necessary for something like that to work. A new band no one has heard of is going to have a much harder time making something like that work, so as such it's not really comparable.
      - _delirium 16y ago
        I agree it's not easy to pull off with no starting fan base, but isn't that true of breaking into the industry the old way too? An unknown band with no fan base is not going to have an easy time convincing an RIAA label to sign them and put out their album. I'm not sure their current problem (put out demos, find fans) is actually harder or lower-probability than the older problem was (put out demos, impress A/R person).

davidw 16y ago

The problem is that there are two "costs" of production: * The cost of reproduction - which in terms of software, music, and now books, is essentially zero. * The cost of producing those goods in the first place, which is very high in many cases. These are called 'sunk costs'. Prices are tending towards the cost of reproducing stuff, and people are struggling to come up with ways to cover actual production costs, which haven't really changed much. Now, certainly, in the past, there were no guarantees that if you wrote a book over the course of a year, that you'd be able to make up for a lost year's worth of wages, but at least you had a shot at it - and also a shot at earning several times that if you had a hit. If, instead, you spent a year writing a book, and it were easy, legal and acceptable (we're not quite there with all three) to just copy it all over the internet once it was released... where would you get your money from? This is all described pretty well here: http://en.wikipedia.org/wiki/Public_good http://en.wikipedia.org/wiki/Public_good

_delirium 16y ago
> struggling to come up with ways to cover actual production costs, which haven't really changed much The cost of buying food hasn't changed much, but the actual costs of doing the recording/release/distribution have decreased a lot, which lowers barriers to entry and increases supply. To produce a recording whose production values are seen by the average casual music fan as "good enough", and then sell an mp3, requires much less capital investment than putting out a decent-sounding record in 1975 would have, or even a decent-sounding CD in 1990. Sure, home recording on a Macbook isn't going to get you the quality a professional studio would get you, but the quality gap is much less than it used to be, especially for someone who spent some time reading (free) documentation on the subject. Rather than home recording producing unreleasable cassette demos, they're now often good enough to upload to YouTube or sell directly to fans. As a result, the people who've paid for professional studio time now have to compete directly with all those home recordings, whereas previously they could more or less ignore them. That drives down prices. Related, many artists actually put a negative value on their time: there are quite a few people who love what they do so much that they're actually willing to subsidize their own art-production by working other jobs (e.g. waiting tables).
- 16y ago