Comments on: Inflection point http://www.crazybutable.com/weblog/archives/2004/04/28/inflection-point/ A weblog for people who otherwise wouldn't. Fri, 05 Dec 2008 02:04:11 +0000 http://wordpress.org/?v=2.2.2 By: John Wilson http://www.crazybutable.com/weblog/archives/2004/04/28/inflection-point/#comment-238 John Wilson Thu, 29 Apr 2004 11:33:08 +0000 http://www.crazybutable.com/weblog/archives/2004/04/28/inflection-point/#comment-238 I guess my point is that labels have a natural monopoly on the "works for hire" which they choose to maintain the copyright on. Because of this they can raise their costs far above the marginal cost of production, as opposed to CD player manufacturers, who have to really keep the price point down because any company can make a CD player. Of course, record companies have larger expenses than cheap CD manufacturers (promotion, stupid lawsuits, payoffs to radio stations) so when it comes to shareholder profits, it eventually evens out. Competition between record labels, the threat of online piracy, and the large number of substitutions for CDs (I don't listen to CDs in my car on the way to and from work really, I listen to the radio) work to keep prices down. Hmm... looks like you got some boring discussion anyway. I guess my point is that labels have a natural monopoly on the “works for hire” which they choose to maintain the copyright on. Because of this they can raise their costs far above the marginal cost of production, as opposed to CD player manufacturers, who have to really keep the price point down because any company can make a CD player. Of course, record companies have larger expenses than cheap CD manufacturers (promotion, stupid lawsuits, payoffs to radio stations) so when it comes to shareholder profits, it eventually evens out. Competition between record labels, the threat of online piracy, and the large number of substitutions for CDs (I don’t listen to CDs in my car on the way to and from work really, I listen to the radio) work to keep prices down.

Hmm… looks like you got some boring discussion anyway.

]]> By: Geof http://www.crazybutable.com/weblog/archives/2004/04/28/inflection-point/#comment-237 Geof Thu, 29 Apr 2004 08:58:52 +0000 http://www.crazybutable.com/weblog/archives/2004/04/28/inflection-point/#comment-237 Well, that's fine in the big-bucks label case where the label gets most of the revenue, but for indies who sell just a few cases of CD's, well, the price point is directly related to their mortgage payment. Well, that’s fine in the big-bucks label case where the label gets most of the revenue, but for indies who sell just a few cases of CD’s, well, the price point is directly related to their mortgage payment.

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