tag:blogger.com,1999:blog-8641429817507217988.post7277745334910681687..comments2008-05-12T07:31:04.179-04:00Hank Williamsnoreply@blogger.comBlogger9125tag:blogger.com,1999:blog-8641429817507217988.post-22235025417729400722008-04-13T12:32:39.906-04:002008-04-13T12:32:39.906-04:00I agree a lot. Let's say there are two different movies. The first one took a full year to produce and the second one a week. The first one is liked by many people, and the second by none.<BR/><BR/>The marginal cost of copying the movies? Same - zero. So, they should be priced the same at zero? Of course not.<BR/><BR/>If there is no piracy, adding some markup to my marginal costs and sell the product is an excellent and the most straightforward way to recover my investment (upfront costs).hyokonhttp://slowblogger.comnoreply@blogger.comtag:blogger.com,1999:blog-8641429817507217988.post-4131373937695103912008-04-11T17:45:15.025-04:002008-04-11T17:45:15.025-04:00Hank, I just started reading you a week or two back and I like a lot of what you've got to say. <BR/><BR/>On this one though, I think you're looking too much at the production side of the equation. From the consumption side the costs do seem to be approaching the marginal cost if you consider *all* the consumers, both those who buy and those who steal. And you *must* consider those who steal, because that's part of the equation when the "marginal cost of theft" (if you will) is so low. <BR/><BR/>If a Foo Fighters album comes out but only 40% of the album's consumers have paid for it, that theft has had *some* impact on price.<BR/><BR/>I'm not saying it is all doom-and-gloom or that I buy into the voodoo. But people's concept of property, value, etc. online is definitely different than it is in the real world and that is a factor you can't ignore.Matthttp://youell.com/mattnoreply@blogger.comtag:blogger.com,1999:blog-8641429817507217988.post-45367233426672963562008-04-10T01:16:42.537-04:002008-04-10T01:16:42.537-04:00you got part of it right, things are changing... but you have no idea how MUCH change is going to happen... <BR/><BR/>it is the tools that are becoming ubiquitous, not the products... word-processing is free now, though office is very expensive...<BR/><BR/>but the real change is in the relationship between value and money, they are becoming disconnected to a disruptive degree... and this condition that is coming is a return to a more human style of functioning, historically...<BR/><BR/>the value of work has been the work itself, not some arbitrary thing called money....<BR/><BR/>no one paid the great artists of the past to make, say, all the buddhas you may find in an antique shop, society was set up in a different way... <BR/><BR/>that way is returning<BR/><BR/>enjoygregoryhttp://www.blogger.com/profile/14408369948377761936noreply@blogger.comtag:blogger.com,1999:blog-8641429817507217988.post-49507787062879591652008-04-09T21:19:28.786-04:002008-04-09T21:19:28.786-04:00Great post Hank. Hope the TV appearance went well. I do have a question for you though...<BR/><BR/>One of the biggest risks for a paid-for software product seems to be commoditization of its market. If that is true, then the platform/infrastructure space is a risky place to be - because a horizontally applicable platform has a large potential market, it can be attractive for new entrants to undercut incumbents with low pricing and "make it up on volume". We see platform technology commoditized again and again.<BR/><BR/>But it does seem from your postings so far that your company is intending to be in the platform market with a paid-for product. So how are you mitigating that risk?<BR/><BR/>OK, maybe you can't tell us that :-) Anyway, I will be interested to see how you do that part..<BR/><BR/>Cheers<BR/><BR/>..Mark,,Mark Allertonhttp://www.blogger.com/profile/18256016844727717484noreply@blogger.comtag:blogger.com,1999:blog-8641429817507217988.post-55835324906741492812008-04-09T20:22:38.428-04:002008-04-09T20:22:38.428-04:00Hi, Great post, its really interesting, I think free, will slowly become the "try me" before you use our cool features that cost you £? online. Many businesses use it already and i think its the way to go without the online world going crazy and thinking they deserve free everywhere.Scottnoreply@blogger.comtag:blogger.com,1999:blog-8641429817507217988.post-21169757353514808972008-04-09T19:33:16.718-04:002008-04-09T19:33:16.718-04:00GAH! It's Real Video. :(<BR/>Hopefully there will be a downloadable version of the program in another format. I'll check the archives later or tomorrow.Marc Simonywww.marcsimony.comnoreply@blogger.comtag:blogger.com,1999:blog-8641429817507217988.post-16024219421298955662008-04-09T14:43:08.236-04:002008-04-09T14:43:08.236-04:00Hank, just FYI, Vyew is a Web 2.0 company that is successfully working with the "freemium" model and with no VC funding thus far after four years. Vyew is a web-conferencing and visual-collaboration platform that has an ad-supported fully functional free version, two paid subscription services, enterprise licencing and a 1U appliance for internal hosting. Vyew is profitable because it's a serious application for education, training and business collaboration that organizations are willing to pay for. Also, schools generally don't want to use ad-supported software. Online consumer and social products have more pressure to be free than business products.Todd Lanewww.vyew.comnoreply@blogger.comtag:blogger.com,1999:blog-8641429817507217988.post-33437130299414262672008-04-09T12:41:56.091-04:002008-04-09T12:41:56.091-04:00(As an aside: nice blog -- it's becoming part of my routine).<BR/><BR/>Quite right on that score! Right now the VCs are making a mint by using Free(TM) as a barrier to market entry, but as you note, someone will eventually climb up the value chain in most categories and eventually priced software will return.<BR/><BR/>The big reason why software won't be indefinitely free, IMHO, is that with free software products there's very little incentive to do the really ugly, boring work that your average Googler/Y-Combinatorialist would shudder at. Working where I sit in the enterprise software field, some of the best stuff we do is so mind-numbingly boring or tedious that only the incentive that customers are desperate to pay dearly for it allows the work to happen. I'd NEVER do half of my job for free, and I suspect most of the software market is similar.JimDesuhttp://www.blogger.com/profile/11987405081071021057noreply@blogger.comtag:blogger.com,1999:blog-8641429817507217988.post-61894610708935134632008-04-09T09:49:29.763-04:002008-04-09T09:49:29.763-04:00Interesting... I don't read blogs much, but I stopped to read yours. I think you have some good points (not that my opinion means much.)<BR/>I've been wondering the same kinds of things myself, and am interested to see where this goes.<BR/>I have two startup ideas in the cooking, so I'll be sure to check back.Ojichanhttp://www.blogger.com/profile/05153572222121575326noreply@blogger.com