5 ms·

It's the weakest part of her argument though as iPhones have a unit cost whereas digital copies of her music do not. But I think she is very right to refuse to

It's the weakest part of her argument though as iPhones have a unit cost whereas digital copies of her music do not. But I think she is very right to refuse to pay for a scheme that is supposed to increase Apple's market share and not hers.

WorldWideWayne 11y ago
OK, give us iPhones for what it costs Apple to roll them off the factory floor please and thank you! (That's more than 50% off retail.)
- Caprinicus 11y ago
  Companies very often do sell products at or above cost when a line begins in order to gain market share, while the price to build them goes down over time and they become profitable. She has most certainly taken advantage of this at some point, without knowing it.
coldtea 11y ago
>It's the weakest part of her argument though as iPhones have a unit cost whereas digital copies of her music do not. The most basic cost you have to recoup is that of making the song (studio, musicians, production, what you charge for your voice etc). This remains real money, even if you can make a digital copy of a song for free. Besides this is based on a "physical product" model of economics and tries to apply it to digital goods. It doesn't relate that well. In an era when tons of people works in stuff that can be "copied for free", there are other models that should be applied (e.g. that you should still pay for the free-to-produce copy).
- fauigerzigerk 11y ago
  >The most basic cost you have to recoup is that of making the song (studio, musicians, production, what you charge for your voice etc). This remains real money, even if you can make a digital copy of a song for free. Absolutely, but that is fixed cost not unit cost. Not recouping fixed costs is bad. But losing money on top of that for every unit you give away is even worse. The distinction matters just as much as in the past because our economies have not just become more digital, they are also more service oriented than before, and services often do have unit costs. A better analogy to giving away iPhones would be to play a live gig for free.
  - slantyyz 11y ago
    > Absolutely, but that is fixed cost not unit cost. Isn't your unit cost = Cost of Goods Sold / Units Sold? Wouldn't the fixed cost producing the music be amortized (over some arbitrary number of years) into the Cost of Goods Sold to produce an accurate picture of unit cost? > A better analogy to giving away iPhones would be to play a live gig for free. Or how about this analogy: 3 months of free wireless service with every iPhone?
    - fauigerzigerk 11y ago
      Whatever you may call it, I think the distinction between fixed cost and whatever each unit costs you on top of that is very important when we're talking freebies. The correct term is probably marginal cost.
      - slantyyz 11y ago
        That really depends. If you recover your fixed costs, sure. What to the top artists represent in terms of percentage of sales? It's probably more than 90 percent of the sales from less than 10% of the artists. For them, your argument is probably true. I would imagine it takes significantly longer for independent artists, especially niche artists, to recover their fixed costs, especially since music sales are basically a popularity contest.
bestnameever 11y ago
Does the cost matter? Both the iPhone and Music have value regardless of cost. Does anyone know how other companies like Spotify, Rhapsody, Google play and others treat the trial period?

WorldWideWayne 11y ago

OK, give us iPhones for what it costs Apple to roll them off the factory floor please and thank you! (That's more than 50% off retail.)

Caprinicus 11y ago
Companies very often do sell products at or above cost when a line begins in order to gain market share, while the price to build them goes down over time and they become profitable. She has most certainly taken advantage of this at some point, without knowing it.

coldtea 11y ago

>It's the weakest part of her argument though as iPhones have a unit cost whereas digital copies of her music do not. The most basic cost you have to recoup is that of making the song (studio, musicians, production, what you charge for your voice etc). This remains real money, even if you can make a digital copy of a song for free. Besides this is based on a "physical product" model of economics and tries to apply it to digital goods. It doesn't relate that well. In an era when tons of people works in stuff that can be "copied for free", there are other models that should be applied (e.g. that you should still pay for the free-to-produce copy).

fauigerzigerk 11y ago
>The most basic cost you have to recoup is that of making the song (studio, musicians, production, what you charge for your voice etc). This remains real money, even if you can make a digital copy of a song for free. Absolutely, but that is fixed cost not unit cost. Not recouping fixed costs is bad. But losing money on top of that for every unit you give away is even worse. The distinction matters just as much as in the past because our economies have not just become more digital, they are also more service oriented than before, and services often do have unit costs. A better analogy to giving away iPhones would be to play a live gig for free.
- slantyyz 11y ago
  > Absolutely, but that is fixed cost not unit cost. Isn't your unit cost = Cost of Goods Sold / Units Sold? Wouldn't the fixed cost producing the music be amortized (over some arbitrary number of years) into the Cost of Goods Sold to produce an accurate picture of unit cost? > A better analogy to giving away iPhones would be to play a live gig for free. Or how about this analogy: 3 months of free wireless service with every iPhone?
  - fauigerzigerk 11y ago
    Whatever you may call it, I think the distinction between fixed cost and whatever each unit costs you on top of that is very important when we're talking freebies. The correct term is probably marginal cost.
    - slantyyz 11y ago
      That really depends. If you recover your fixed costs, sure. What to the top artists represent in terms of percentage of sales? It's probably more than 90 percent of the sales from less than 10% of the artists. For them, your argument is probably true. I would imagine it takes significantly longer for independent artists, especially niche artists, to recover their fixed costs, especially since music sales are basically a popularity contest.

bestnameever 11y ago

Does the cost matter? Both the iPhone and Music have value regardless of cost. Does anyone know how other companies like Spotify, Rhapsody, Google play and others treat the trial period?