Re: "Bill makes all the important decisions here."

Mike Masnick (
Sun, 18 Jan 1998 19:52:31 -0500

At 04:24 PM 1/18/98 -0800, Seth Golub wrote:
>Even if it costs nothing to produce a good, it may (and in this case
>does) still cost something to distribute. The resources required to
>serve content to a million readers a week do cost more than the those
>required to serve content to five readers a week.

Yeah, but what's the difference between the 1 millionth and the 1 millionth
and first? Zero. The *marginal* cost at this point for those sites is
certainly zero.

>Of course, it does cost to produce the content in the first place.
>That cost can be spread over all the consumers, but it won't hit zero
>per consumer until you have an infinite number of consumers, which
>even Bill isn't planning on any time soon.

Indeed. I never said it doesn't cost anything to produce the content at
all. I just said the cost to the *consumer* should be zero, which is it's
marginal cost. This says nothing about the cost to the producer, which is
obviously greater than zero. You seem to have missed my point. I never
said that the overall cost should be spread among the consumers. That goes
against the economic theory. What I said was that you charge the marginal
cost. The marginal cost is zero, and therefore the cost to the consumer
should be zero.

Which brings up the problem I didn't address, but you have brought up
inadvertantly: How the fuck do companies make money if they should be
giving away their product? That's what everyone on the net is trying to
figure out today. Basically, the fact is the money needs to come from
somewhere for the companies to stay in business (obviously), but it
shouldn't come from the consumer as a "usage" fee. Where it does come
from, I'm not sure. Yahoo! seems to be getting it from advertising, but
that seems to only work in specialized circumstances.

And, to Tim, if this is so blindingly simple, why do so many people not
understand it?