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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Joe Lyddon who wrote (48364)	3/3/2001 2:22:18 PM
From: Rande Is	Respond to of 57584

If Napster were to charging for downloads, they would alienate their customers. . . who are there primarily for what they can glean for free. It would destroy their business model. I doubt it would work. But even still. . . as a desperate attempt at salvaging their company, Napster offered a $1 billion settlement. . . .which I thought was low. Then I read that they wanted a 40% cut for what they charged for downloaded music, much the same as a retail store charges for product they buy. But record companies are not set up to run in that manner. Royalties paid to artists, writers, publishers, etc. represent a fairly substantial amount of money. To charge $5 for a download, for instance and giving the record company $3. . . would amount to the record company netting perhaps $1.50 per download. That is nowhere near the markup they make on retail product sales. A complete packaged CD cost about $0.75 per unit to make. So selling it at $8 wholesale returns 10 times the cost. This is important due to the amount of money that the record company gambles when it fronts numerous artists for the making of records, videos and tours. . . not to mention promotion and advertising expense. It just wouldn't work. Successful artists carry unsuccessful artists on a label. Record companies will manage their own websites for direct delivery of music. . . .book companies and movie companies [who have similar high up-front costs at stake] will eventually follow suit. And that is the only way that will approach the sort of markup necessary to sustain such a business model in the creative fields. It is more about setting a precedent, IMO. Rande Is

To: Joe Lyddon who wrote (48364)	3/3/2001 3:13:11 PM
From: American Spirit	Read Replies (1) \| Respond to of 57584

Greenspan - just heard an analysis saying Greenie wants to preserve the value of his cuts and not get the market addicted to them. That makes sense. But the analysis also said he will continue cutting gradually until he doesn't need to anymore. I think many tech stocks are so undervalued now that it's almost all upside from here but the rise will be more modest and gradual. Certainly the days of panic selling are about over. And shorting techs down here doesn't make too much sense either. Shorts ought to quit while they are ahead. I wish I had been one of them. If I had been I'd taking my winnings and quit. Too much chance of sharp rebounds now from these puny levels.