piclist 2007\03\02\170020a >
Thread: : Bit Torrent to offer DRM's video content
face BY : Russell McMahon email (remove spam text)

>> >> I'm sure it costs the same as any other pay-for-tv service too.
>> >> Companies
>> >> see new technology as a way to raise profits for themselves, not
>> >> make things
>> >> cheaper for consumers.
>> > That is self-defeating logic. Due to a property known as market
>> > elasticity, the
>> > returns on investment are the lower, the higher the end price is
>> > set.

>> Not at all:

> Yes at all. In 95% of the cases, new technology is marketed at a
> premium for a
> considerable part of the product lifetime's curve.

Your examples are good enough in the general case . I'd perhaps
question the 95% though.
The original example given was a subset which represents a realistic
and significant enough part of the market where a company introduces a
new technology that has a clearly lower cost of implementation.

In the case in point the suggested situation was one where a new
technology makes the ability to provide the service cheaper for the
introducer and the statement was that companies tend to take the extra
profit for themselves rather than pass it on to the consumer. Either
are valid business models :-).

Here's a well enough related current example of one company passing on
the gains (or some of them) and of another company keeping it entirely
for themselves and still getting customers.



Two leading hardware vendors, Dell and Lenovo, are quietly selling
laptops without preloaded Microsoft Windows to Linux customers who
know where to look, says Lincoln Durey, CEO of EmperorLinux, an
Atlanta reseller that customises, installs and supports Linux on the
major-brand laptops it sells.
[[1]] Dell:       ...  Customers aren't saving money by passing up the
OS license, though. "The Dell price is identical. Windows or nothing,
it is exactly the same to the penny," Durey says. "I've actually seen
one-time discounts on the Windows side that are not reflected on the
Linux side for a week, so you could end up getting the Windows ones
cheaper," he adds.


[[2]] Lenovo:       ... Lenovo, however, passes on a savings of about
US$40 to customers who order ThinkPads without the Microsoft license,
Durey says. Currently EmperorLinux sells some T Series ThinkPad models
without the Microsoft license, but Durey says he has not yet been able
to order an X series ThinkPad except with the license.

"The nice thing about not having the OS license is that it will lower
the total cost of the solution," says Randy Hickel, Lenovo's Americas'
sector leader.


Personally, if I had to buy a Dell in those circumstances, I'd buy one
with the Window's OS and then put the COA to one side as a (possible)

For some reason people do seem to keep on buying Dell, non standard
components and interesting pricing (and not just as above*)
notwithstanding. One of my machines here is a Dell, but I think it may
have been one that I found :-). Pricing I can handle on a comparison
basis and I'm happy to buy what seems most cost effective, all things
considered, as long as there are no hidden costs. But non-standard
internal interfaces to eg disk drives are hidden costs which will be
invisible to many buyers. That one will be forced to buy 'original'
parts for old models at yesteryear + rates due to a manufacturer
locking you into their system is something a buyer may like to know
about at time of purchase. [[Sorry sir/ma'am, you can only use brand J
petrol as the petrol filler only accepts their nozzles]].


* eg, and this is only one example

Sticker / advertised cost = $xxx.

Small print:    Only available by standard delivery (from Malaysia)

Standard delivery costs $NZ100.

<009101c75d16$2b2ecea0$d201a8c0@y2k> 7bit

See also: www.piclist.com/techref/displays.htm?key=video
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