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I think this is slightly askew. A network of a sort is important, but slightly different. In Detroit, cars made a lot of money in the mid 20th century. Cars
by Ologn 5y ago
I think this is slightly askew. A network of a sort is important, but slightly different.
In Detroit, cars made a lot of money in the mid 20th century. Cars would roll through an assembly line, the parts of which might be $1500 or so in 1960, and be sold for more at a dealer.
Nowadays you have teams building the iOS and Android app and web interface for Facebook and Google, which also have backends, SREs, UX etc. The Facebook Android app is written by a team, and once a version hits production, it is distributed around the world almost instantly, and almost for free (from Facebook's perspective). The costs are in building the first one, the costs of the next billion are much lower ( The Facebook Android app has been installed over 5 billion times https://play.google.com/store/apps/details?id=com.facebook.katana https://play.google.com/store/apps/details?id=com.facebook.k... , according to Google Play)
Same with Avengers movies. Final cut costs over $100 million, next to that, worldwide distribution to millions of people costs next to nothing. It goes into Netflix and onto my screen.
This is what is changing. A lot of money goes into perfecting a piece of digital property, and then worldwide distribution to billions of people has negligible cost. Different than an automobile going through an assembly line decades ago, where each car made cost Ford over $1000 to produce.
- the-dude 5y agoYou are describing https://en.wikipedia.org/wiki/Marginal_cost https://en.wikipedia.org/wiki/Marginal_cost
- Ologn 5y agoTraditionally, and depending on the commodity, marginal cost can on rare occasions rise, sometimes stays flat, and often falls. With this more modern phenomena for digital products, almost all the costs go into creating the very first product, and then with the production of the copy and subsequent copies the cost of subsequent products falls to near-nothing or nothing. It could be called marginal cost if so desired, but this phenomenon is new in terms of its weight within the economy.
- deleted 5y ago[deleted]