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What are the variable "fixed" costs? And when are they incurred? This is about revenue maximization, not user enjoyment maximization or fairness maximization.
by smachiz 4y ago
What are the variable "fixed" costs? And when are they incurred?
This is about revenue maximization, not user enjoyment maximization or fairness maximization.
Ultimately I don't think most artists actually want revenue maximization - they're probably far more interested in fairness maximization in ensuring their fan base of all economic strata get to see them live.
- etothepii 4y agoAs in if I know I will make $1m in sales I might choose to use better audio equipment.
- 8note 4y agoIf you're selling out shows at double the price, wouldn't the next step be to reduce the sound quality so you can play cheaper shows with a higher profit?
- etothepii 4y agoThis is a really interesting question. I feel like I see it with airlines all the time. The question that comes eventually though is do people notice and does a culture of penny-pinching trickle down into an inferior product that makes people resent the high price enough that sometimes they won't pay it.
- smachiz 4y agoI mean that's literally yield maximization - you don't need to capture all the demand for a given good or service. You just need to capture the right mix of it. I would broadly say that I don't think anyone who goes to a typical Arena concert is making their buying decision on the audio quality. The bar for good enough is pretty low.
- smachiz 4y agoI don't think anyone would make that decision; the bar for good enough is pretty low, and if you won't get any incremental revenue (no one is selling or advertising on the various parameters of audio quality), why would you spend that money?