6 ms·

He only charged too little if his goal was to extract as much profit as possible from his customers.

by HotKFreshSwag 15y ago

adamtmca 15y ago
You couldn't know that without information about demand elasticity on his product. Decreasing the price could have increased the profit he extracted from his customers.
cottonseed 15y ago
Right. Based on what he has said (and done), I don't imagine that was his goal. I imagine several goals: to entertain people, to make a reasonable profit, and show he could successfully develop and distribute his own content unencumbered. Did $5 maximize those goals? That's what I was wondering with the original (brutally downvoted) OP. Suppose he charged $1, 5x as many people saw it, and he made the same amount. Would that have a been a better price point?
- rcfox 15y ago
  It's a little naive to expect a linear relation between dollars and viewers. Charging $1 would have increased sales, but probably no more than 10-20%.
  - cottonseed 15y ago
    I didn't mean to imply such a close relationship between price and volume with my example. What I meant to ask was, if more people saw it but he made the same amount, would he like that more? I know this is a deeply nested comment so that might not be the right place to put it, but this is the idea I'm trying to get at. Louis CK is performing an experiment about the production and distribution of entertainment. I think that's great, and I'm thrilled at his success both because I think he's quite good, and I think the current model(s) are very broken. The existing model seems to have a funnel effect: e.g., in music, labels pick bands to invest in, and those bands get a disproportionate share of the spoils. So I guess my question is, what price for content like this best for me, the consumer, in that it stimulates and supports a diverse landscape of content and performers? Is $5 the right price?

6 ms·

He only charged too little if his goal was to extract as much profit as possible from his customers.

by HotKFreshSwag 15y ago

He only charged too little if his goal was to extract as much profit as possible from his customers.

adamtmca 15y ago
You couldn't know that without information about demand elasticity on his product. Decreasing the price could have increased the profit he extracted from his customers.
cottonseed 15y ago
Right. Based on what he has said (and done), I don't imagine that was his goal. I imagine several goals: to entertain people, to make a reasonable profit, and show he could successfully develop and distribute his own content unencumbered. Did $5 maximize those goals? That's what I was wondering with the original (brutally downvoted) OP. Suppose he charged $1, 5x as many people saw it, and he made the same amount. Would that have a been a better price point?
- rcfox 15y ago
  It's a little naive to expect a linear relation between dollars and viewers. Charging $1 would have increased sales, but probably no more than 10-20%.
  - cottonseed 15y ago
    I didn't mean to imply such a close relationship between price and volume with my example. What I meant to ask was, if more people saw it but he made the same amount, would he like that more? I know this is a deeply nested comment so that might not be the right place to put it, but this is the idea I'm trying to get at. Louis CK is performing an experiment about the production and distribution of entertainment. I think that's great, and I'm thrilled at his success both because I think he's quite good, and I think the current model(s) are very broken. The existing model seems to have a funnel effect: e.g., in music, labels pick bands to invest in, and those bands get a disproportionate share of the spoils. So I guess my question is, what price for content like this best for me, the consumer, in that it stimulates and supports a diverse landscape of content and performers? Is $5 the right price?