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MySpace, R.I.P.

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Re: MySpace, R.I.P.

#31

Post by crc32 »

sebg wrote: post #30
crc32 wrote: post #28

Earlier quoted context omitted.

So... I pull water out of my well at a cost of $1 per bottle, later sell for $5 per bottle, have $400 in my hand, and yet my profit margin is zero. I am not sure how to respond to this. You are self-evidently wrong, unless we are to accept your redefining of profit to be "the selling price of goods minus the selling price". Very strange.

"I pull water out of my well at a cost of $1 per bottle." This is the same as buying a bottle of water from a supplier. Your input costs $1 per bottle. You sell it for $1 dollar. Your profit is zero and your margin is zero. (profit = revenue - cost of inputs // profit margin = profit / revenue ) "I later sell if for $5 dollars per bottle." If you were to buy from a supplier now because there is no ferry it would cost…

You are wrong and I think it is important that you understand your error. Your mistake is that pulling the water out of a well that I own is not "the same as buying a bottle of water from a supplier".

I have pulled the water out of a well that I own, at a cost of $1 per bottle. The cost of production is constant, over the time period that the ferry is both available and unavailable. Therefore should the price that I am able to sell my water at rise due to constrained supply, I will make more profit. My profit margin will increase.

This is called "supply and demand", you will find it explained on Wikipedia, and it is a basic concept underlying markets of all kinds.

What I meant by "there is only one type of profit" is that profit in all your definitions can also be stated as selling price minus cost price. In the context of this discussion the distinction is meaningless, because regardless of how you obtained that margin, whether by speculation or not, it does not neccessarily tend to zero in open markets!

Re: MySpace, R.I.P.

#32

Post by hacknews »

crc32 wrote: post #16
hacknews wrote: post #10

Earlier quoted context omitted.

"This means a much higher level of competition, and competition destroys margins." This has wider implications on the ability to profit over the long run in a capitalist society. In open markets margins should tend to zero. It seems the only way to profit would be to have some edge in terms protected market (monopoly) or slight protected technical advantage for a short period. But once the protected advantages are go…

I am not sure that "margins tending to zero" applies at all to any market where the marginal cost of producing is non-zero.

Could you clarify this statement?

rs

Re: MySpace, R.I.P.

#33

Post by crc32 »

hacknews wrote: post #32
crc32 wrote: post #16

Earlier quoted context omitted.

I am not sure that "margins tending to zero" applies at all to any market where the marginal cost of producing is non-zero.

Could you clarify this statement? rs

My understanding of your comment is that open markets means competition. Competitors will compete on price, forcing prices down, with constant production costs margins will "tend to zero"

However this is incorrect. Where demand is greater than supply, prices (and therefore profits) may be stable or rise regardless of the number of competitors. A drought is a scenario of restricted supply where all competitors in the water supply market may increase profits due to demand.

Additionally, competition in markets where there is imperfect knowledge is not always based on price. It may be based on many other factors for example branding etc.

So your statement "In open markets margins should tend to zero" is not true, they will tend towards an equilibrium based on supply and demand, and even then individual suppliers may be differentiated by factors other than price allowing them to make a higher margin than their competitors.

The fact that competition may in some cases reduce margins, does not therefore have any "wider implications on the ability to profit over the long run in a capitalist society."

Note that where the marginal cost of production is zero, we can say that supply is infinite, and so prices cannot be maintained by restricted supply. This is a different case. But I cannot think of any market where the marginal cost of production is zero. Even copying and pasting a news article requires a small investment of time. So this qualifier may be unneccessary since it refers to an absurd situation.

Re: MySpace, R.I.P.

#34

Post by dan_the_welder »

ahlatimer wrote: post #13
dan_the_welder wrote: post #7

Earlier quoted context omitted.

Take a look at Bandcamp, it's the last nail in MySpace's coffin. Main page, http://www.bandcamp.com/ Random couple of artist pages for an indication of the customization available, never mind the billing and music serving back end. http://redfang.bandcamp.com/ http://danielaspector.bandcamp.com/

The problem I see with Bandcamp is that there's no discovery portion of it. If you already know of an artist, it's great, but you can't stumble across some new artist like you can on MySpace.

Not to be sarcastic, but there is the whole internet full of tools to point people at your Bandcamp or MySpace page, in fact that's what people are doing for their MySpace music pages, promoting them on Facebook and in some cases writing their address on bathroom walls.

Also, there is something to be said for doing a single thing and doing it well. Managed hosting of musicians websites and nothing else.

If anything this is the year of overshoot, Google wants to be Facebook, Facebook wants to be Twitter (still), the Sixty One decided to be more like a glossy magazine.

Everyone wants to be your single source, conveniently forgetting that this is the internet we are talking about and not the cable or phone company.

Re: MySpace, R.I.P.

#35

Post by dan_the_welder »

pbhjpbhj wrote: post #19
dan_the_welder wrote: post #7

Earlier quoted context omitted.

Take a look at Bandcamp, it's the last nail in MySpace's coffin. Main page, http://www.bandcamp.com/ Random couple of artist pages for an indication of the customization available, never mind the billing and music serving back end. http://redfang.bandcamp.com/ http://danielaspector.bandcamp.com/

"Bandcamp"? Are they targeting the nerd market with that name?

It's a catchy name. They were smart to jump on it. One of the bands I linked is pretty heavy grunge metal and the other is an international singer songwriter, so I think their net is pretty wide.

Re: MySpace, R.I.P.

#36

Post by [deleted] »

crc32 wrote: post #31
sebg wrote: post #30

Earlier quoted context omitted.

"I pull water out of my well at a cost of $1 per bottle." This is the same as buying a bottle of water from a supplier. Your input costs $1 per bottle. You sell it for $1 dollar. Your profit is zero and your margin is zero. (profit = revenue - cost of inputs // profit margin = profit / revenue ) "I later sell if for $5 dollars per bottle." If you were to buy from a supplier now because there is no ferry it would cost…

You are wrong and I think it is important that you understand your error. Your mistake is that pulling the water out of a well that I own is not "the same as buying a bottle of water from a supplier". I have pulled the water out of a well that I own, at a cost of $1 per bottle. The cost of production is constant, over the time period that the ferry is both available and unavailable. Therefore should the price that I…

[deleted]
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