>It's the weakest part of her argument though as iPhones have a unit cost whereas digital copies of her music do not.
The most basic cost you have to recoup is that of making the song (studio, musicians, production, what you charge for your voice etc). This remains real money, even if you can make a digital copy of a song for free.
Besides this is based on a "physical product" model of economics and tries to apply it to digital goods. It doesn't relate that well. In an era when tons of people works in stuff that can be "copied for free", there are other models that should be applied (e.g. that you should still pay for the free-to-produce copy).
>The most basic cost you have to recoup is that of making the song (studio, musicians, production, what you charge for your voice etc). This remains real money, even if you can make a digital copy of a song for free.
Absolutely, but that is fixed cost not unit cost. Not recouping fixed costs is bad. But losing money on top of that for every unit you give away is even worse.
The distinction matters just as much as in the past because our economies have not just become more digital, they are also more service oriented than before, and services often do have unit costs. A better analogy to giving away iPhones would be to play a live gig for free.
> Absolutely, but that is fixed cost not unit cost.
Isn't your unit cost = Cost of Goods Sold / Units Sold?
Wouldn't the fixed cost producing the music be amortized (over some arbitrary number of years) into the Cost of Goods Sold to produce an accurate picture of unit cost?
> A better analogy to giving away iPhones would be to play a live gig for free.
Or how about this analogy: 3 months of free wireless service with every iPhone?
Whatever you may call it, I think the distinction between fixed cost and whatever each unit costs you on top of that is very important when we're talking freebies. The correct term is probably marginal cost.
That really depends. If you recover your fixed costs, sure.
What to the top artists represent in terms of percentage of sales? It's probably more than 90 percent of the sales from less than 10% of the artists. For them, your argument is probably true.
I would imagine it takes significantly longer for independent artists, especially niche artists, to recover their fixed costs, especially since music sales are basically a popularity contest.
Companies very often do sell products at or above cost when a line begins in order to gain market share, while the price to build them goes down over time and they become profitable. She has most certainly taken advantage of this at some point, without knowing it.
I found it a little off-putting, because Apple does provide free iPhones to celebrities. They're included in gift bags and freebie tents at most of the events they attend, or often just mailed to them directly free of charge, or sent with a check in exchange for a tweet, etc.
Taylor Swift has probably personally received more than a dozen free iPhones. Even lesser-known celebrities receive multiple copies of all the latest electronics, and just regift them because they have so many.
When she wanted to upgrade to the 6, she most likely did not go to the store and pay for it.
Celebrities that big just receive free stuff shipped to their front door all the time. TVs, electronics, clothes, jewelry, luxury brands.
Carriers who choose to offer 'free' iPhones are doing it for basically the same reason as the labels accepted this deal with Apple. They're willing to take a short term loss / risk in exchange for years of revenue from subscriptions.
They gove away their OS and a ton of solid near business class apps in some cases. They do this to get people to buy hardware.
She said she supports herself on tours, five more music away, you should get more people at her tours. Same for the new band, you don't get discovered on the radio, 5K and they will play your song, it's that easy. Never works.
Play shows for 5 - 10 years, you may make it, or be coached and molded like Taylor, that Canadian Kid, and the ret of them.
We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation.