posted Oct 03, 2000

Moving from Units to Eunuchs Misc.10/3/2000; 2:17:46 PM 'Since this minimum per-unit cost is best spread over a large number of titles (the "economies of scale" effect), the current system favors a handful of major labels, all of which are stuck with roughly the same magnitude of distribution costs. 'The Internet upends all of that, because payment for distribution has been completely decoupled from the data delivered. Your monthly ISP bill doesn’t fluctuate, whether you download every Grateful Dead MP3 ever made or only send email to your mother on Sundays. When compared to the physical world, there is no such thing as online "distribution," in that Sony and Time Warner can’t base their markup on the costs of delivery....'Sometime in the next 12 months, someone with a large enough catalog of popular entertainment–probably music, because video isn’t yet ready for prime time–is going to begin an online price war. When that happens, all the players will quickly realize that the old pricing models no longer apply.... once the change begins, look for it to be swifter than almost anyone imagines.'Excellent article.


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