Sylver - 7:43 pm on Mar 1, 2011 (gmt 0)
When you build a car you can't copy the car for almost no cost... the cost to copy is real and so the car has a real value.
So according to you, the value of an item is based on its copy costs alone?
A car costs less than $1,000 to copy by the way, so, following your "logic", that should be the price, since nothing else matters.
What's a car? $500 worth of iron, $200 worth of other stuff. The CD player is a simple piece of plastic with 2 bits of metal stuck in it.
How can they justify a $50,000 cost for a piece of equipment that uses barely $700 of materials and a few hours of production time?
To break even on costs, you need to take into account all production expenses, and of course add a profit margin on top of that.
Same thing applies to digital products. If it costs $1,000,000 to make, you could sell 1,000,000 copies at $2 a piece and do well.
However, if people figure "Hey, we could make 1,000,000,000 for nothing, so the price should be $0.001 and of course, the author can do without my $0.001, so I will just get a pirated copy", guess what! The author never sell 1,000,000 copies and he has to charge the honest people much more than $2 on account of all the freeloaders who decided to dispense with paying the piper.