Book People Archive

Re: Trade protectism explain in relation to cartoons.

In a message dated 1/31/2006 12:19:51 PM Mountain Standard Time, 
prosfilaes@[redacted] writes:

> On 1/30/06, Haradda@[redacted] <Haradda@[redacted]> wrote:
> >It's Orwellian because it is a matter of control.  The use of the 
> government
> >to control behavior and to create a monopoly.
> 
> That's quite an abuse of the word Orwellian.

Ok you have red whqt I think is Orwellian.  Give me your definition.  As I 
recall from the book the phrases "the object of power is power"  and "power is 
not a means it is an end,"that and 'the image of a boot coming down on the 
collective face of mankind." But I am open to alternative interpretations.

> 
> >Now we are talking economics and digital economics at that.  I don't know
> >how to break it to you but prices are set by demand and what economists
> >refer to as market elasticity, i.e. the number of people who want that
> >peoduct as the set price.  But really most of that goes completly out the
> >window with digital materials.  If you follow the TI curve the very first
> >DVD costs $100,000+ but the very next one costs $1.00 or less.
> 
> And if they can get someone to pay $100,000 plus the cost of dubbing,
> then they're fine. But since they can't, they have to spread that cost
> of all the produced DVDs.
> 

The problem with your line of reasoning is that I shouldn't be able to go
down to WalMart and purchase hundreds of public domain DVD's for a dollar
apiece. Or go to Dollar Tree or Family dollar or Smith's Market Place and
buy two movies for a dollar.  AOL is offering downloads of selected TV
series episodes for .99 cents.  These are suppose to be remastered and
reformatted.  Must cost something to do that.  I know that to print off
a DVD commercially in the U.S. with incerts and cases you are looking
at $15,000 plus $1.50  per DVD.  If you go to China that $1.50 goes down
to about .80 cents per DVD.  These are in quanities up to a 15,000 DVD run.  

But you are right you need to set a price that covers your costs and 
maximizes your profits.  Prices set very low imply that the product is
not worth very much.  I rationalize my dollar movie DVD purchases by saying
that if they are truely bad with no redeaming qualities then I can throw
them away or use them as costers without having any guilt in doing so. 
On the other hand some of them are rather good.  It's a matter of taste.
But I digress.  If you make the assumption that you are going to sell
50 million DVD's of a movie that costs you basically nothing because the
production costs and translation/dubbing have already been paid for in
your home market. At $10 per DVD you and made $500 million.  This is how
AOL is doing it.  Then your problem is to set the price high enough so
that people will value the product you are selling but low enough to
attract inpulse buying. Because  every one you sell is pure profit from 
that point on.  It is one of the ironies of economics that if you set your 
price to high you will discourage the sales you could have made.  I would
say that the going price to maximize your profits with DVD movies is
somewhere between $7and $15 for the U.S. markets.  Now to being this
back to ebooks.  Based on my experience if you have 20,000 to 50,000
ebooks in your DVD collection then you could sell just about everything
you have for $50 for the DVD collection.  If you sell it for between $50
and $100 you will make the most money.  Anything higher than that  you
wont make nearly as much. 

David Reed