Finally kiss ClearQAM goodbye
It seems our poor cable companies are all suffering terribly from theft of service, hence the FCC is going to let them encrypt all the basic channels as well. For many of us, this already happened for the HD channels and with the prevelance of the Ceton and Colossus, perhaps it’s no longer a big deal for HTPC DVR fans but I have to imagine, once they win this battle, then it’s on to plugging the analog hole and turning on copy-protection on all broadcasts…
If this happens in my area,
If this happens in my area, it’ll make me sad. My two silicondust boxes do me well. I’d probably break down and try using antennas with them.
My Silicondust Device does
My Silicondust Device does not work well OTA. Sadly. Y’know if they would just let me purchase television channels that I desired instead of gobs of stuff I have no interest to watch, I wouldn’t mind paying for cable. So, for now I will remain strictly OTA and internet sourced for my entertainment. My own personal stance against over-priced entertainment.
Mast3rL33 wrote:
My
[quote=Mast3rL33]
My Silicondust Device does not work well OTA. Sadly. [/quote] Used mine HDHomerun exclusively OTA. Worked fine. I did have a good size antenna and live within 30 miles of all the stations though.
That sucks!!! I have a 4
That sucks!!! I have a 4 tuner Ceton, but I still use 4 clearQAM tuners for the local channels. Frankly, my Ceton is not all that reliable, as Time Warner still hasn’t released the 1501 Tuning adapter firmware for my Cisco TA. If I lose my clearQAM tuners I’ll be ticked.
I filed my comments at
I filed my comments at http://fjallfoss.fcc.gov/ecfs/proceeding/view?z=xzflk&name=11-169 and would encourage others to do the same. Especially, I would encourage others to echo my comments of prohibiting the MSOs from using any output protection on the basic channels.
Also, just to be clear, my comments are solely mine, and do not necessarily reflect my employer’s views, for those of you who know who that is.
erkotz wrote:I filed my
[quote=erkotz]
I filed my comments at http://fjallfoss.fcc.gov/ecfs/proceeding/view?z=xzflk&name=11-169 and would encourage others to do the same. Especially, I would encourage others to echo my comments of prohibiting the MSOs from using any output protection on the basic channels.
Also, just to be clear, my comments are solely mine, and do not necessarily reflect my employer’s views, for those of you who know who that is.
[/quote]
+1
I’ll be filing my comments later today
erkotz wrote:I filed my
[quote=erkotz]
I filed my comments at http://fjallfoss.fcc.gov/ecfs/proceeding/view?z=xzflk&name=11-169 and would encourage others to do the same. Especially, I would encourage others to echo my comments of prohibiting the MSOs from using any output protection on the basic channels.
Also, just to be clear, my comments are solely mine, and do not necessarily reflect my employer’s views, for those of you who know who that is.
[/quote]
Is there a +1 button somewhere on the FCC’s site?
Is it clear that this applies
Is it clear that this applies to re-carried OTA transmissions? Looking at the article linked it appears that only the basic cable channels will be affected. If that’s right TBH, I’m surprised that these are still unencrypted, I don’t think that Comcast was providing them the last time I did a scan.
babgvant wrote:
Is it clear
[quote=babgvant]
Is it clear that this applies to re-carried OTA transmissions? Looking at the article linked it appears that only the basic cable channels will be affected. If that’s right TBH, I’m surprised that these are still unencrypted, I don’t think that Comcast was providing them the last time I did a scan.
[/quote]
I’m pretty sure Comcast filed for an exception to encrypt all the basics back in 2009 or such. It’s not clear what the state of the local broadcast channels will be after this.
babgvant wrote:Is it clear
[quote=babgvant]
Is it clear that this applies to re-carried OTA transmissions? Looking at the article linked it appears that only the basic cable channels will be affected. If that’s right TBH, I’m surprised that these are still unencrypted, I don’t think that Comcast was providing them the last time I did a scan.
[/quote] I currently get all of my local channels in HD via ClearQAM on Comcast. And I only subscribe to basic cable. If they change this then I will have no HD and will likely either dump cable all together or else go for a cablecard tuner (which I don’t want to do at the moment…)
Lothar wrote:I currently get
[quote=Lothar]
I currently get all of my local channels in HD via ClearQAM on Comcast. If they change this then I will have no HD and will likely either dump cable all together or else go for a cablecard tuner (which I don’t want to do at the moment…)
[/quote]
I’d be really surprised if they were allowed to encrypt OTA retransmissions. There’s no point in “protecting” that content.
babgvant wrote:I’d be really
[quote=babgvant]
I’d be really surprised if they were allowed to encrypt OTA retransmissions. There’s no point in “protecting” that content.
[/quote]
I disagree. OTA isn’t as easy as ClearQAM for consumers so there is a cost value to migrate from ClearQAM to OTA so from a business perspective there is a point to “protecting” it. i.e. When did you last purchase a HDTV that came with an OTA antenna?
mikinho wrote: I disagree.
[quote=mikinho]
I disagree. OTA isn’t as easy as ClearQAM for consumers so there is a cost value to migrate from ClearQAM to OTA so from a business perspective there is a point to “protecting” it. i.e. When did you last purchase a HDTV that came with an OTA antenna?
[/quote]
That’s a different thing. From the MSO’s perspective limiting access to OTA retransmission has [limited] value (although if you have cable you probably have a STB), but I don’t see the FCC agreeing to allow it. That content is freely available to anyone with an antenna so from the FCC’s perspective there isn’t a point to allowing it.
I’m probably not the best test subject having never even hooked a coax cable up to any of my HDTVs, and I put an OTA antenna on my house 🙂
babgvant wrote:That’s a
[quote=babgvant]
That’s a different thing. From the MSO’s perspective limiting access to OTA retransmission has [limited] value (although if you have cable you probably have a STB), but I don’t see the FCC agreeing to allow it. That content is freely available to anyone with an antenna so from the FCC’s perspective there isn’t a point to allowing it.
I’m probably not the best test subject having never even hooked a coax cable up to any of my HDTVs, and I put an OTA antenna on my house 🙂
[/quote]
The change is based on “allowing basic encryption would largely eliminate theft of service, promote innovation and investment, and reduce polution and fuel consumption by reducing truck rolls to activate or deactivate service.”
If the OTA channels aren’t encrypted it still doesn’t stop theft of service. It doesn’t matter that it is available in other forms easily.
btw, I have a monster OTA Clearstream 4 antenna as well…I rarely use OTA but I still have it as a backup along
mikinho wrote:The change is
[quote=mikinho]
The change is based on “allowing basic encryption would largely eliminate theft of service, promote innovation and investment, and reduce polution and fuel consumption by reducing truck rolls to activate or deactivate service.”
If the OTA channels aren’t encrypted it still doesn’t stop theft of service. It doesn’t matter that it is available in other forms easily.
[/quote]
How is it “theft of service” to pull OTA channels off the cable line? That content doesn’t belong to them.
babgvant wrote:How is it
[quote=babgvant]
How is it “theft of service” to pull OTA channels off the cable line? That content doesn’t belong to them.
[/quote]
The infrastructure does. I see that no different than using a public domain image hosted on a different site on your own site. The content itself is “free” but you are using someone else’s bandwidth for your own benefit.
mikinho wrote: The
[quote=mikinho]
The infrastructure does. I see that no different than using a public domain image hosted on a different site on your own site. The content itself is “free” but you are using someone else’s bandwidth for your own benefit.
[/quote]
Http bandwidth is rivalrous, where QAM is non-rivalrous in consumption. If they are pushing content into your house that cost is fixed whether you have a tuner hooked up or not.
babgvant wrote:Http bandwidth
[quote=babgvant]
Http bandwidth is rivalrous, where QAM is non-rivalrous in consumption. If they are pushing content into your house that cost is fixed whether you have a tuner hooked up or not.
[/quote]
That doesn’t take into account other types of theft of service. For instance, in many low income housing and neighborhoods I see coaxial lines running between various homes that are obviously not from a cable company. I know more than a few people doing this in my own town home community. If the OTA content isn’t encrypted coming in then that type of theft will continue.
mikinho wrote: That doesn’t
[quote=mikinho]
That doesn’t take into account other types of theft of service. For instance, in many low income housing and neighborhoods I see coaxial lines running between various homes that are obviously not from a cable company. I know more than a few people doing this in my own town home community. If the OTA content isn’t encrypted coming in then that type of theft will continue.
[/quote]
You think these folks are pulling wires to watch CBS? They should be able to do that w/o the hassle.
TBC, I don’t have a problem with the MSO encrypting cable channels. They shouldn’t be encrypting OTA retransmissions, although my issue with that is only conceptual probably because I’ve always thought of ClearQAM as found $.
babgvant wrote:You think
[quote=babgvant]
You think these folks are pulling wires to watch CBS? They should be able to do that w/o the hassle.
[/quote]
I’ve been to some of the homes that do it and yes they only get the local ClearQAM channels.
I see no issue with them being encrypted coming in as long as they offered as Copy Freely streams which is what Eric Kotz recommended in his comments to the FCC as a mandate.
mikinho wrote: I’ve been to
[quote=mikinho]
I’ve been to some of the homes that do it and yes they only get the local ClearQAM channels.
[/quote]
In that case, 1) wow, talk about doing it wrong 2) I don’t see how it’s a theft of service; it’s still non-rivalrous and the MSO didn’t have to pay to pull the illicit cables.
babgvant wrote:
mikinho
[quote=babgvant]
[quote=mikinho]
I’ve been to some of the homes that do it and yes they only get the local ClearQAM channels.
[/quote]
In that case, 1) wow, talk about doing it wrong 2) I don’t see how it’s a theft of service; it’s still non-rivalrous and the MSO didn’t have to pay to pull the illicit cables.
[/quote]
There is still opportunity cost involved. Realistically, how many of those homes do you think would subscribe to “something” vs do without TV/use an antenna? In fact, CableVision’s comments indicated that one apartment building where they had encrypted basic had 20% of the (formally non-subscribing) residents sign up for service, so there is a very real opportunity cost here. Several of the comments also talk about theft of service by customers that only subscribe to the Internet getting ClearQAM and using it for TV, too.
Just to be clear, this proposal is to scramble *EVERYTHING* on the cable TV wire – including OTA stuff.
Once again, I would encourage others to file their comments. If MSO’s get to encrypt with no restrictions on CCI, you have no one to blame but yourself when your OTA stations are marked Copy Once, if you didn’t file comments. Feel free to lift ideas/thoughts/sentences from my comments, if you would like to use them in your own.
erkotz wrote: There is still
[quote=erkotz]
There is still opportunity cost involved. Realistically, how many of those homes do you think would subscribe to “something” vs do without TV/use an antenna? In fact, CableVision’s comments indicated that one apartment building where they had encrypted basic had 20% of the (formally non-subscribing) residents sign up for service, so there is a very real opportunity cost here.
[/quote]
Sorry to nitpick, but this is not an opportunity cost. As with most non-rivalrous “thefts” this is primarily a pricing inefficiency caused by monopolistic behaviors. Interestingly the non-rivalrousness could be designed out of the system with a more intelligent implementation; which would have a side-effect of preventing this sort of “thievery”.
[quote=erkotz]
Several of the comments also talk about theft of service by customers that only subscribe to the Internet getting ClearQAM and using it for TV, too.
[/quote]
This is not a theft. Labeling it in this way is obscene.
[quote=erkotz]
Just to be clear, this proposal is to scramble *EVERYTHING* on the cable TV wire – including OTA stuff.
Once again, I would encourage others to file their comments. If MSO’s get to encrypt with no restrictions on CCI, you have no one to blame but yourself when your OTA stations are marked Copy Once, if you didn’t file comments. Feel free to lift ideas/thoughts/sentences from my comments, if you would like to use them in your own.
[/quote]
FWIW, I found your comments to be quite eloquent and well argued; I agree completely with them.
babgvant wrote:erkotz
[quote=babgvant]
[quote=erkotz]
Several of the comments also talk about theft of service by customers that only subscribe to the Internet getting ClearQAM and using it for TV, too.
[/quote]
This is not a theft. Labeling it in this way is obscene.
[/quote]
It depends on the circumstance. Again I know a lot of people who get ClearQAM through their Internet connection, I did that for many years. I didn’t read those specific comments so I don’t know the context but there are a lot of people who remove the bandpass filter from their cable junction box to get ClearQAM. That is theft. If the technician doesn’t install one…well I never read through the cable contract….so it may still be theft. I don’t know. What I perceive as theft really doesn’t matter to the legal definition.
babgvant wrote:
erkotz
[quote=babgvant]
[quote=erkotz]
Several of the comments also talk about theft of service by customers that only subscribe to the Internet getting ClearQAM and using it for TV, too.
[/quote]
This is not a theft. Labeling it in this way is obscene.
[/quote]
Theft is the word used by the MSOs, not my word. To be honest, I’m not certain what the legal definition would be – there’s no doubt in my mind it would be theft if the MSO had put a trap on the line, which you removed, however it’s a bit greyer if they didn’t install a trap. I can see arguments both way – and my gut says that in a court of law, the MSOs would manage to win.
[quote=babgvant]
FWIW, I found your comments to be quite eloquent and well argued; I agree completely with them.
[/quote]
Thanks. To be honest, some of the comments I put in there (prohibit autobinding, require DTAs to use CableCARDs,etc) have essentially no chance of happening, but my hope is if the FCC repeatedly sees things, maybe they will sink in in the future.
erkotz wrote: Theft is the
[quote=erkotz]
Theft is the word used by the MSOs, not my word. To be honest, I’m not certain what the legal definition would be – there’s no doubt in my mind it would be theft if the MSO had put a trap on the line, which you removed, however it’s a bit greyer if they didn’t install a trap. I can see arguments both way – and my gut says that in a court of law, the MSOs would manage to win.
[/quote]
I’m sure they would win, a great many things are nonsensically illegal 🙂 IMO the way we as a society have allowed content owners/providers to redefine our lexicon is obscene. It isn’t possible to steal something that isn’t rivalrous.
I don’t disagree that it’s wrong to remove the trap, but since it is costless infraction the right way to resolve the underlying problem is by creating a reasonably priced product that offers that service.
Lothar wrote:
babgvant
[quote=Lothar]
[quote=babgvant]
Is it clear that this applies to re-carried OTA transmissions? Looking at the article linked it appears that only the basic cable channels will be affected. If that’s right TBH, I’m surprised that these are still unencrypted, I don’t think that Comcast was providing them the last time I did a scan.
[/quote] I currently get all of my local channels in HD via ClearQAM on Comcast. And I only subscribe to basic cable. If they change this then I will have no HD and will likely either dump cable all together or else go for a cablecard tuner (which I don’t want to do at the moment…)
[/quote]This was what I was doing up till last week, then they encrypted my locals which was all I ever received and i have to make the same decision.
I had lots of issues with TWC
I had lots of issues with TWC switching the clearQAM channel frequencies, so I went OTA, never looked back.
I talked to my lawyer friend
I talked to my lawyer friend and yes it is still considered theft–passive theft. The gist of it is that if you are not subscribed and paying for a the service and are watching it then it is considered theft.
He also directed me to http://www.hcctelevision.com/Cable_Theft.html
mikinho wrote:I talked to my
[quote=mikinho]
I talked to my lawyer friend and yes it is still considered theft–passive theft. The gist of it is that if you are not subscribed and paying for a the service and are watching it then it is considered theft.
He also directed me to http://www.hcctelevision.com/Cable_Theft.html
[/quote]
Doesn’t that definition strike you as a little obscene?
babgvant wrote:Doesn’t that
[quote=babgvant]
Doesn’t that definition strike you as a little obscene?
[/quote]
Absolutely, I think it is ridiculous since it holds consumers at fault for potential provider mistakes. But how do you prevent it without doing some thing like encryption?
mikinho wrote: Absolutely, I
[quote=mikinho]
Absolutely, I think it is ridiculous since it holds consumers at fault for potential provider mistakes. But how do you prevent it without doing some thing like encryption?
[/quote]
I don’t see why they need to prevent it. The marginal cost of OTA retransmission approaches zero and unless there’s an OTA-only package (which to be fair would have to be priced very aggressively) there’s no lost revenue.
To me this seems like another permutation of the race-to-DRM digital (non-rivalrous in consumption) goods, as we’ve found with music the “theft problem” essentially disappears when appropriately priced alternatives are available I don’t see how this is that different.
I don’t think it holds
I don’t think it holds consumers at fault for provider mistakes. The consumer must take affirmative action to connect the cable line to the TV, execute a channel scan, turn on the TV day in and day out, and watch all that content, all the while failing to pay the cable company. The cable company doesn’t force the consumer to do any of those things.
And to me, it doesn’t matter if we’re talking about OTA channels or not. Those channels may be free when the signal is in the air, but they aren’t free when they are transmitted over the cable line. Water in a lake or river is free….but that doesn’t mean it’s acceptable to steal a bottle of water from Walmart. That’s theft, no matter how you look at it.
richard1980 wrote:I don’t
[quote=richard1980]
I don’t think it holds consumers at fault for provider mistakes. The consumer must take affirmative action to connect the cable line to the TV, execute a channel scan, turn on the TV day in and day out, and watch all that content, all the while failing to pay the cable company. The cable company doesn’t force the consumer to do any of those things.[/quote]
You are assuming a lot about the maliciousness and technical savvy of end users.
[quote=richard1980]And to me, it doesn’t matter if we’re talking about OTA channels or not. Those channels may be free when the signal is in the air, but they aren’t free when they are transmitted over the cable line. Water in a lake or river is free….but that doesn’t mean it’s acceptable to steal a bottle of water from Walmart. That’s theft, no matter how you look at it.
[/quote]
I love analogies that completely mangle the fundamentals to produce the wrong result. First off there is an infinite difference b/w goods that are rivalrous and non-rivalrous in consumption, using a rivalrous good to facilitate understanding the consumption of non-rivalrous goods immediately invalidates the argument. Second, even if we were to ignore that fallacy, the analogy isn’t analogous; there are way too many touch points b/w the “free” river water and the bottle of water at Walmart for salvaging. That said, and ignoring the whole rivalrous thing, this is akin to MSOs watering the lawn then charging everyone who walks by on the public sidewalk for getting wet.
babgvant wrote:First off
[quote=babgvant]
First off there is an infinite difference b/w goods that are rivalrous and non-rivalrous in consumption, using a rivalrous good to facilitate understanding the consumption of non-rivalrous goods immediately invalidates the argument.
[/quote]
You are assuming a purely economic view and ignoring morality. You may be correct that the economic definition of theft has been perverted but there is a general accepted moral code of what is good (or right) and bad (or wrong). In almost all societies we teach our kids that taking from others is wrong. This is no different, it doesn’t matter if it is rivalrous or non-rivalrous, you are not paying for a service and using it illegally.
mikinho wrote:You are
[quote=mikinho]
You are assuming a purely economic view and ignoring morality. You may be correct that the economic definition of theft has been perverted but there is a general accepted moral code of what is good (or right) and bad (or wrong). [/quote]
This is a business problem though, confusing the issue with a relative standard is problematic; we should be using the right toolset to understand the root cause and potential solutions.
[quote=mikinho]In almost all societies we teach our kids that taking from others is wrong. This is no different, it doesn’t matter if it is rivalrous or non-rivalrous, you are not paying for a service and using it illegally.
[/quote]
One of my favorite TV quotes of all time is from the Simpsons.
“Once the government legalizes something, it is no longer immoral”
It is different because of the why and how around concepts like morality as a social binder. When a good is consumed in consumption there are valid reasons to promote the idea that “taking from others” is wrong, without it we don’t have society. When “taking” doesn’t consume a good it is fallacious to apply the same principles however. There is an inherent danger in applying a standard of morality to places where it simply doesn’t apply; we are instinctively smarter than that. When we input improper laws the output is always a society of scofflaws (as an aside, if you haven’t seen Ken Burns “Prohibition” it provides an excellent historical reference on this point w/o the uncomfortableness of our current stance on digital content or drugs).
TBC, I’m not advocating consumption w/o compensation (which is a really bad long term strategy), just that we need to align prices and costs according to the fundamental principles that govern a good.
babgvant wrote:
You are
[quote=babgvant]
You are assuming a lot about the maliciousness and technical savvy of end users.
[/quote]
I’m assuming the exact steps one must take to steal cable TV service. Someone without the technical knowledge of how to connect a cable line to their TV and scan for channels isn’t going to be stealing cable in the first place. There’s no way anyone can convince me that anybody accidentally connected the TV to the cable line, accidentally scanned for channels, or accidentally forgot to give the cable company some money.
[quote=babgvant]
I love analogies that completely mangle the fundamentals to produce the wrong result. First off there is an infinite difference b/w goods that are rivalrous and non-rivalrous in consumption, using a rivalrous good to facilitate understanding the consumption of non-rivalrous goods immediately invalidates the argument. Second, even if we were to ignore that fallacy, the analogy isn’t analogous; there are way too many touch points b/w the “free” river water and the bottle of water at Walmart for salvaging. That said, and ignoring the whole rivalrous thing, this is akin to MSOs watering the lawn then charging everyone who walks by on the public sidewalk for getting wet.
[/quote]
Whether a good is rivalrous or not is irrelevant because rivalry doesn’t determine if it is ok to consume that good without paying for it. Excludability does. A good can be rivalrous or non-rivalrous, but if it is excludable, it is not ok to consume it without paying for it. Water is non-excludable when it’s in a river, so it’s ok to consume it without paying for it. OTA signals are non-excludable when they are in the air, so it’s ok to consume them without paying for them. If you put water in a bottle and give it a price, it immediately goes from being non-excludable to excludable, which means it is NOT ok to consume it without paying for it. If you put OTA TV signals in a cable pipeline and give it a price, it immediately goes from being non-excludable to excludable, which means it is NOT ok to consume it without paying for it. Rivalrous or not, excludability is what determines theft.
richard1980 wrote: I’m
[quote=richard1980]
I’m assuming the exact steps one must take to steal cable TV service. Someone without the technical knowledge of how to connect a cable line to their TV and scan for channels isn’t going to be stealing cable in the first place. There’s no way anyone can convince me that anybody accidentally connected the TV to the cable line, accidentally scanned for channels, or accidentally forgot to give the cable company some money.
[/quote]
If I move into an apartment complex plug the coax into my TV and get local channels should I have to determine if 1) there isn’t an antenna providing it 2) the complex isn’t doing it another way 3) call the MSO?
What about if I subscribe to cable internet and do the same thing? Where does my responsibility end? Should I have to verify that the MSO has rebroadcast rights for OTA, what about the other content on their networks?
[quote=richard1980]
Whether a good is rivalrous or not is irrelevant because rivalry doesn’t determine if it is ok to consume that good without paying for it. Excludability does. A good can be rivalrous or non-rivalrous, but if it is excludable, it is not ok to consume it without paying for it. Water is non-excludable when it’s in a river, so it’s ok to consume it without paying for it. OTA signals are non-excludable when they are in the air, so it’s ok to consume them without paying for them. If you put water in a bottle and give it a price, it immediately goes from being non-excludable to excludable, which means it is NOT ok to consume it without paying for it. If you put OTA TV signals in a cable pipeline and give it a price, it immediately goes from being non-excludable to excludable, which means it is NOT ok to consume it without paying for it. Rivalrous or not, excludability is what determines theft.
[/quote]
This process is about creating an excludable good, ClearQAM it is not currently excludable (or it would be a lot harder to use it). That said, you’ve put the cart before the horse, excludability is a property of a rivalrous good; w/o unnatural machinations non-rivalrous goods are generally non-excludable unless there is a rivalrous component (e.g. a plastic disc or bottle).
babgvant wrote:
If I move
[quote=babgvant]
If I move into an apartment complex plug the coax into my TV and get local channels should I have to determine if 1) there isn’t an antenna providing it 2) the complex isn’t doing it another way 3) call the MSO?
[/quote]
Well common sense would tell you to ask somebody that works at the complex. You shouldn’t just assume that coax connector on the wall is hooked up to an OTA antenna or that the complex is providing free cable. And calling the MSO is always a good idea if you truly want to do the right thing.
[quote=babgvant]
What about if I subscribe to cable internet and do the same thing? Where does my responsibility end? Should I have to verify that the MSO has rebroadcast rights for OTA, what about the other content on their networks?
[/quote]
If you subscribe to cable internet and not cable TV, the cable line shouldn’t be connected to your TV. It should go into your cable modem only. Connecting the line to the TV is only done for one reason…to get TV channels. While I’m sure there is a very small percentage of people that may believe they have to have the line connected to the TV in order for their internet to work, that is not going to be a majority opinion. In nearly all cases, this is done blatantly to avoid paying for the TV signal.
[quote=babgvant]
This process is about creating an excludable good, ClearQAM it is not currently excludable (or it would be a lot harder to use it). That said, you’ve put the cart before the horse, excludability is a property of a rivalrous good; w/o unnatural machinations non-rivalrous goods are generally non-excludable unless there is a rivalrous component (e.g. a plastic disc or bottle).
[/quote]
By the definition of excludable, both rivalrous and non-rivalrous goods can be excludable. Rivalry only determines whether or not the consumption of the good by one consumer affect the ability of other consumers to consume that good. Go back and look at that wikipedia article you linked and check out the chart at the bottom. Specifically look at what category “satellite television” is in, and what category “free to air television” is in.
And yes, ClearQAM is an excludable good since it is meant to be used only by paying customers. The only way it wouldn’t be excludable is if the cable company didn’t put a price on the basic tier. Every cable company I know of charges something for the basic tier.
richard1980 wrote: Well
[quote=richard1980]
Well common sense would tell you to ask somebody that works at the complex. You shouldn’t just assume that coax connector on the wall is hooked up to an OTA antenna or that the complex is providing free cable. And calling the MSO is always a good idea if you truly want to do the right thing.
[/quote]
Unreal. We have very different views of what defines “common sense” and “right”.
[quote=richard1980]
If you subscribe to cable internet and not cable TV, the cable line shouldn’t be connected to your TV. It should go into your cable modem only. Connecting the line to the TV is only done for one reason…to get TV channels. While I’m sure there is a very small percentage of people that may believe they have to have the line connected to the TV in order for their internet to work, that is not going to be a majority opinion. In nearly all cases, this is done blatantly to avoid paying for the TV signal.
[/quote]
So it is your assertion that w/o a cable subscription I have no right to plug my TV into the coax in my home?
[quote=richard1980]
By the definition of excludable, both rivalrous and non-rivalrous goods can be excludable. [/quote]
True, which is why I said “in general”. The important point is that there is often a rivalrous component in a non-rivalrous good which attaches excludability.
[quote=richard1980]
Rivalry only determines whether or not the consumption of the good by one consumer affect the ability of other consumers to consume that good. Go back and look at that wikipedia article you linked and check out the chart at the bottom. Specifically look at what category “satellite television” is in, and what category “free to air television” is in. [/quote]
Satellite television is encrypted, this is the attribute that makes it excludeable. W/o DRM it wouldn’t be.
[quote=richard1980]
And yes, ClearQAM is an excludable good since it is meant to be used only by paying customers. The only way it wouldn’t be excludable is if the cable company didn’t put a price on the basic tier. Every cable company I know of charges something for the basic tier.
[/quote]
Intent isn’t reality. MSOs clearly intend to create an excludable good; the key part of the definition of excludability is “it is possible to prevent people who have not paid for it from having access to it” clearly it is not possible to prevent access or this process wouldn’t be necessary.
It has not been my experience with Comcast or Cox that ClearQAM provides anything but rebroadcast OTA stations; I am not aware of any OTA only package with either.
“babgvant” wrote:
So it is
[quote=”babgvant”]
So it is your assertion that w/o a cable subscription I have no right to plug my TV into the coax in my home?
[/quote]
You have no right to plug the TV into the coax line that connects to the cable company unless you are have received authorization from the cable company to do so. That is specifically covered by federal law (see 18 U.S.C § 2511 and 47 U.S.C. § 605) (note the exception in 47 USC 605).
[quote=”babgvant”]
True, which is why I said “in general”. The important point is that there is often a rivalrous component in a non-rivalrous good which attaches excludability.
[/quote]
Not in all cases. Consider movie theaters. The movie itself is non-rivalrous, but there is excludability because only people that pay to watch the movie can see it.
[quote=”babgvant”]
Satellite television is encrypted, this is the attribute that makes it excludeable. W/o DRM it wouldn’t be.
[/quote]
If you want a different chart, see here. While that wikipedia chart only said satellite TV, the meaning was very clear…TV content that you are supposed to pay for.
[quote=”babgvant”]
Intent isn’t reality. MSOs clearly intend to create an excludable good; the key part of the definition of excludability is “it is possible to prevent people who have not paid for it from having access to it” clearly it is not possible to prevent access or this process wouldn’t be necessary.
[/quote]
Semantics. If you want to take that route, there is no such thing as an excludable good because everything in existence can be stolen, therefore it is not possible to prevent anyone from having access to anything they haven’t paid for.
[quote=”babgvant”]
It has not been my experience with Comcast or Cox that ClearQAM provides anything but rebroadcast OTA stations; I am not aware of any OTA only package with either.
[/quote]
I currently have Cox in Oklahoma City, and the basic tier is called Cox Starter, and costs $15.75 per month. See http://ww2.cox.com/residential/oklahomacity/tv/pricing.cox for additional info.
richard1980 wrote: You have
[quote=richard1980]
You have no right to plug the TV into the coax line that connects to the cable company unless you are have received authorization from the cable company to do so. That is specifically covered by federal law (see 18 U.S.C § 2511 and 47 U.S.C. § 605) (note the exception in 47 USC 605).
[/quote]
I save that reading for later. I would find it very bizarre that a cable subscription would be required to plug in a cable to the TV in my home that provides other legitimate uses (like CCTV in an apartment complex).
[quote=richard1980]
Not in all cases. Consider movie theaters. The movie itself is non-rivalrous, but there is excludability because only people that pay to watch the movie can see it.
[/quote]
Actually that’s a great example of my point. The movie theater is a building with limited seating space and therefore a rivalrous good. Entrance the the theater is excludable (it has doors and walls) and what you’re actually paying for. Experience based goods (movies, sporting events, concerts, etc.) all work this way, the non-rivalrous good is an enticement to pay for the rivalrous thing.
[quote=richard1980]
If you want a different chart, see here. While that wikipedia chart only said satellite TV, the meaning was very clear…TV content that you are supposed to pay for.
[/quote]
Those goods in the excludeable section of the graph are only excludable because of a protection scheme (the unnatural machination referred to before). Also, it should be noted that web content is rivalrous because pulling it uses bandwidth, too many users at one time = no site. So the WSJ Online noted as non-rivalrous in the chart you linked is not correct, which puts the quality of the research and fundamental understanding of the goods represented on it in question.
[quote=richard1980]
Semantics. If you want to take that route, there is no such thing as an excludable good because everything in existence can be stolen, therefore it is not possible to prevent anyone from having access to anything they haven’t paid for.
[/quote]
Not semantics at all given the nature of the good and current implementation. I think you missed the “possible”, I don’t see anything in there about “success” 🙂
[quote=richard1980]
I currently have Cox in Oklahoma City, and the basic tier is called Cox Starter, and costs $15.75 per month. See http://ww2.cox.com/residential/oklahomacity/tv/pricing.cox for additional info.
[/quote]
You mean this package which includes locals and quite a few others?
babgvant wrote:
I would find
[quote=babgvant]
I would find it very bizarre that a cable subscription would be required to plug in a cable to the TV in my home that provides other legitimate uses (like CCTV in an apartment complex).
[/quote]
A subscription isn’t required…only authorization. However, you aren’t likely to get authorization without a subscription. And even with a subscription, authorization is not always granted…like in a scenario where the cable company has an additional outlet fees. The normal subscription gives authorization to connect one TV, but you’d have to pay an additional outlet fee to connect a 2nd TV. Connecting the 2nd TV without paying the additional outlet fee would be illegal because you don’t have the authorization to have the 2nd TV connected. It sucks, but the law is on the side of the cable companies on this one.
[quote=”babgvant”]
Actually that’s a great example of my point. The movie theater is a building with limited seating space and therefore a rivalrous good. Entrance the the theater is excludable (it has doors and walls) and what you’re actually paying for. Experience based goods (movies, sporting events, concerts, etc.) all work this way, the non-rivalrous good is an enticement to pay for the rivalrous thing.
Also, it should be noted that web content is rivalrous because pulling it uses bandwidth, too many users at one time = no site.
And BTW, if 10 billion people try to view the WSJ website, the website doesn’t disappear, nor does the data fail to flow. It just flows at an extremely small pace per user.
[/quote]
You misunderstand what a rival good is. To put it simply, rival goods can only be consumed/used by one person at a time. Anything that can be used by more than one person at a time is considered non-rival, regardless of whether or not there is an upper limit to how many people can simultaneously use the good. Movie theaters and websites are non-rival because multiple people can use them at the same time. Just because there is a limit on how many people can simultaneously use the good does not change the fact that multiple people can use it simultaneously.
Additionally, a non-rival excludable good, such as a movie theater, is called a club good.
[quote=babgvant]
Not semantics at all given the nature of the good and current implementation. I think you missed the “possible”, I don’t see anything in there about “success” 🙂
[/quote]
That’s my point. You are getting hung up on “possible”. From what I interpret, you are saying if anyone ever steals cable service, that means it’s not possible to prevent unauthorized access, which is why we are in the current situation. Well, I’m saying that it is impossible to completely prevent theft of a good, cable or otherwise. Somebody can always steal everything, no matter what you do or how secure you make the good. There’s always a way around every security measure. Therefore, according to your logic, there can be no such thing as an excludable good.
[quote=babgvant]
You mean this package which includes locals and quite a few others?
[/quote]
Yes, in response to your statement that the only ClearQAM channels with Cox (in your experience) were the local channels. All of the digital channels in that package are ClearQAM. There are 28 ClearQAM channels (of which 15 of them are OTA rebroadcasts) and 22 analog channels (of which 8 are OTA rebroadcasts). The non-OTA channels are junk though.
richard1980 wrote: A
[quote=richard1980]
A subscription isn’t required…only authorization. However, you aren’t likely to get authorization without a subscription. And even with a subscription, authorization is not always granted…like in a scenario where the cable company has an additional outlet fees. The normal subscription gives authorization to connect one TV, but you’d have to pay an additional outlet fee to connect a 2nd TV. Connecting the 2nd TV without paying the additional outlet fee would be illegal because you don’t have the authorization to have the 2nd TV connected. It sucks, but the law is on the side of the cable companies on this one.
[/quote]
If that is true, then it’s another case of an obscene law that is not justifiable when examined. My intent isn’t so much to point out what is illegal as what should be illegal. We have all sorts of crazy, non-economically sound laws; laws that aren’t sane don’t get followed.
[quote=richard1980]
And BTW, if 10 billion people try to view the WSJ website, the website doesn’t disappear, nor does the data fail to flow. It just flows at an extremely small pace per user.
[/quote]
That’s not true. It’s quite possible to take a site offline with enough requests. That’s the point of a DOS attack.
[quote=richard1980]
You misunderstand what a rival good is. To put it simply, rival goods can only be consumed/used by one person at a time. Anything that can be used by more than one person at a time is considered non-rival, regardless of whether or not there is an upper limit to how many people can simultaneously use the good.
[/quote]
Well if you want to get technical, rivalry is really a continuum and non-binary. You don’t get to fully non-rivalrous until marginal cost = 0 with the good unconsumed in consumption. I think ClearQAM fits both tests.
Bandwidth is pretty close to a pure rivalrous good as is the CPU time, disk IO, etc.; so while it might be possible to oversimplify the WSJ page load to ignore this I think that is something that shouldn’t be left out as it is a pretty critical part of making the good consumable.
[quote=richard1980]
Movie theaters and websites are non-rival because multiple people can use them at the same time. Just because there is a limit on how many people can simultaneously use the good does not change the fact that multiple people can use it simultaneously.
Additionally, a non-rival excludable good, such as a movie theater, is called a club good.
[/quote]
Taking a deeper look at the e.g., the thing you’re buying is a seat (or a place to stand in some cases), which can only comfortable be used by one person at a time; clearly pretty far to the left on our rivalous-to-non-rivalrous continuum.
[quote=richard1980]
That’s my point. You are getting hung up on “possible”. From what I interpret, you are saying if anyone ever steals cable service, that means it’s not possible to prevent unauthorized access, which is why we are in the current situation.
[/quote]
Well my first point is that it’s not possible to steal a non-rivalrous good; this concept doesn’t apply to non-tangible goods that aren’t consumed in consumption. Secondly the cable companies cannot currently prevent unauthorized access to ClearQAM so it’s not possible to prevent access, making them non-excludable. Higher tiers, which are encrypted and require conditional access, are secured with it being quite possible to prevent access, making them excludable. This process is intended to turn a non-excludable good into one that is excludeable; I’m not sure how this point is unclear.
Taking the DRM scheme used on DVD movies for e.g.: the fact that it exists (and ignoring the rivalrous nature of the plastic delivery mechanism) makes it excludable because it is possible to prevent unauthorized use. This DRM scheme being ineffective doesn’t change that, it just get circumvented because it’s a joke.
Possible means that some effort has been made to limit access, the fence doesn’t need to be high but it needs to be there; in this case there isn’t one so it’s not applicable.
[quote=richard1980]
Well, I’m saying that it is impossible to completely prevent theft of a good, cable or otherwise. Somebody can always steal everything, no matter what you do or how secure you make the good. There’s always a way around every security measure. Therefore, according to your logic, there can be no such thing as an excludable good.
[/quote]
See above.
[quote=richard1980]
Yes, in response to your statement that the only ClearQAM channels with Cox (in your experience) were the local channels. All of the digital channels in that package are ClearQAM. There are 28 ClearQAM channels (of which 15 of them are OTA rebroadcasts) and 22 analog channels (of which 8 are OTA rebroadcasts). The non-OTA channels are junk though.
[/quote]
In my experience ClearQAM is limited to locals and the only package one can buy is local + other channels. I have never seen a locals only package so its not possible to buy the thing that you’re using. This e.g. reinforces that point; thanks.
You and I have very different
You and I have very different opinions of what is right and wrong. I am not going to debate right and wrong with you, as there is no real point in it. I am also not going to debate economic concepts that you obviously do not grasp or that you twist around to suit your own beliefs. For example:
[quote=babgvant]
Taking a deeper look at the e.g., the thing you’re buying is a seat (or a place to stand in some cases), which can only comfortable be used by one person at a time; clearly pretty far to the left on our rivalous-to-non-rivalrous continuum.
[/quote]
As I previously stated, this is the exact definition of a club good, which is non-rivalrous and excludable. I’ll give you credit for being a software developer, but economics clearly is not your area of expertise.
[quote=babgvant]
Secondly the cable companies cannot currently prevent unauthorized access to ClearQAM so it’s not possible to prevent access making them non-excludable.
Taking the DRM scheme used on DVD movies for e.g.: the fact that it exists…..makes it excludable because it is possible to prevent unauthorized use. This DRM scheme being ineffective doesn’t change that…..
[/quote]
If I disconnect your cable line from the cable network, I’ve prevented your access to ClearQAM. Additionally, if I place a bandbass filter in line between your TV and the cable headend, I’ve also prevented your access. Neither method is effective, but they do prevent access until someone interferes. By your own words, this makes ClearQAM an excludable good.
[quote=babgvant]
Possible means that some effort has been made to limit access, the fence doesn’t need to be high but it needs to be there; in this case there isn’t one so it’s not applicable.
[/quote]
I would certainly consider the practice of capping cable connectors and installing bandpass filters a “fence”. And no, it’s not very high but it is there. Encrypting the ClearQAM channels is akin to building a taller fence.
[quote=babgvant]
In my experience ClearQAM is limited to locals and the only package one can buy is local + other channels. I have never seen a locals only package so its not possible to buy the thing that you’re using. This e.g. reinforces that point; thanks.
[/quote]
Your experience is obviously very limited and you have not sought outside resources to confirm your hypothesis. Perhaps you should gain more experience, or you should seek outside resources, like SiliconDust’s channel database, which lists thousands of ClearQAM channels through various providers. I can assure you, there are many people that have much more ClearQAM programming than you think.
Also, I’d just like to point out that in my experience, I have never seen you. But just because I have never seen you, that doesn’t mean I automatically assume that you don’t exist. And I certainly would not definitely say it’s not possible for you to exist, nor would I call you a liar if you told me you do exist. But then again, it’s obvious that we think very differently.
richard1980 wrote:You and I
[quote=richard1980]
You and I have very different opinions of what is right and wrong. I am not going to debate right and wrong with you, as there is no real point in it. I am also not going to debate economic concepts that you obviously do not grasp or that you twist around to suit your own beliefs. For example:
[/quote]
Nothing like a like ad hominem in the morning.
[quote=richard1980]
As I previously stated, this is the exact definition of a club good, which is non-rivalrous and excludable. [/quote]
Simplifying a concept for a textbook (or wikipedia entry) makes it easier to understand, but the truth is more complex. Anyone who has sat in a movie theater knows that different seats have different value (somewhat determined by individual preference); there are good seats (middle back) and bad (anywhere in the first 3-4 rows); given this it should be obvious what kind of good this is.
[quote=richard1980]
I’ll give you credit for being a software developer, but economics clearly is not your area of expertise.
[/quote]
Actually, I have a degree in Economics (and Political Science) from UIUC (a top 25 program) and I was a TA for two years in Intermediate Microeconomics (ECON300). I only got into programing because it was the best job I could get when I graduated.
[quote=richard1980]
If I disconnect your cable line from the cable network, I’ve prevented your access to ClearQAM. Additionally, if I place a bandbass filter in line between your TV and the cable headend, I’ve also prevented your access. Neither method is effective, but they do prevent access until someone interferes. By your own words, this makes ClearQAM an excludable good.
[/quote]
There are many ways to make a good excludable, and yes those are two; the real question is if the MSO does or can do those things. ClearQAM can clearly be an excludable good, it just isn’t right now because they don’t generally do those things.
[quote=richard1980]
Your experience is obviously very limited and you have not sought outside resources to confirm your hypothesis. Perhaps you should gain more experience, or you should seek outside resources, like SiliconDust’s channel database, which lists thousands of ClearQAM channels through various providers. I can assure you, there are many people that have much more ClearQAM programming than you think.
[/quote]
I’ve used Comcast in several areas of Chicago (which for the unfamiliar is a more like using several different companies because of how they grew) and Cox in Florida. I have never been able to pull more than OTA locals over ClearQAM. It appears that your own experience is quite similar with Cox in OK.
I don’t dispute that it could work differently in other locales, and if it does then the fundamentals would be different depending on the facts. Either way that doesn’t impact the situation for you or I, so maybe we can just go with that.
babgvant wrote:
Nothing like
[quote=babgvant]
Nothing like a like ad hominem in the morning.
[/quote]
You left me no choice. Your entire argument is biased and based on your own personal opinion of what is right and wrong. You are twisting around very basic economic principles to make it appear as if you are right, when in fact you are wrong.
[quote=babgvant]
Simplifying a concept for a textbook (or wikipedia entry) makes it easier to understand, but the truth is more complex.
[/quote]
So in other words, textbooks, wikipedia, and every website I could find about the subject, which all agree with me, are all wrong. I’m sorry, but I’m calling BS on this.
[quote=babgvant]
Anyone who has sat in a movie theater knows that different seats have different value (somewhat determined by individual preference); there are good seats (middle back) and bad (anywhere in the first 3-4 rows); given this it should be obvious what kind of good this is.
[/quote]
Yes, the seat itself is rivalrous. But not the movie theater. And to correct a statement you made earlier, when you buy a ticket, you aren’t buying a seat. First, you are renting the seat (I’m nitpicking, but there is a huge difference). Second, the cost of the ticket covers much more than just seat rental. Part of the money goes straight to the studio that made the movie, per the agreement the theater has with the studio. Additionally, you are paying a piece of all the overhead costs associated with operating the theater…things like electricity, employee earnings/benefits, cleaning supplies, maintenance/repair, etc. Those are all non-rivalrous goods. Additionally, the cost incurred by the theater to run the theater when only one customer is present is virtually the exact same as when two customers are present, which means the marginal cost is $0. Hence the reason the theater is classified as non-rivalrous.
[quote=babgvant]
Actually, I have a degree in Economics
[/quote]
Anybody can get a degree. That doesn’t mean what you say is right, nor does it make you an expert on the subject. And even experts can be wrong…even such experts as Stephen Hawking, who at least on one occasion admitted he was wrong, after years of defending his position.
[quote=babgvant]
There are many ways to make a good excludable, and yes those are two; the real question is if the MSO does or can do those things. ClearQAM can clearly be an excludable good, it just isn’t right now because they don’t generally do those things.
[/quote]
A good is excludable if it is possible (i.e., not impossible) to prevent non-paying people from consuming it. You do not have to actually prevent non-paying people from consuming it; failing to prevent non-paying people from consuming it does not make the good non-excludable. Case in point: If you don’t try to stop a shoplifter from stealing a shirt, it doesn’t make the shirt non-excludable. The shirt could only be non-excludable if it is impossible to prevent the thief from stealing it. It is certainly not impossible to stop a thief from stealing the shirt. Therefore, the shirt can not be non-excludable, which makes it excludable by default. The same thing applies here. It is not impossible to stop non-paying people from accessing cable TV, therefore, cable TV service (ClearQAM or otherwise) is excludable.
[quote=babgvant]
It appears that your own experience is quite similar with Cox in OK.
Either way that doesn’t impact the situation for you or I, so maybe we can just go with that.
[/quote]
It does impact the situation for me. And no, my experience is not the same as yours. As I previously stated, all of the digital channels (including the non-local channels) are ClearQAM in Cox’ TV Starter package here in Oklahoma City. In other words, ClearQAM is not limited to just local channels for me.
richard1980 wrote:You left me
[quote=richard1980]
You left me no choice. Your entire argument is biased and based on your own personal opinion of what is right and wrong. You are twisting around very basic economic principles to make it appear as if you are right, when in fact you are wrong.
[/quote]
I believe our actions are always the product of a choice; there is no such thing as “no choice” in a situation.
Given the moral posturing earlier, I enjoyed the irony of the path you chose.
[quote=richard1980]
So in other words, textbooks, wikipedia, and every website I could find about the subject, which all agree with me, are all wrong. I’m sorry, but I’m calling BS on this.
[/quote]
We live in a complex world with complex goods. I can only speculate to why these sources make the claims they do; my guess is that they simplified the concepts to make a point. We are free to think for ourselves, run the numbers and draw conclusions. One of my professors often joked that if you asked two economists the same question you’d get three different answers.
[quote=richard1980]
Yes, the seat itself is rivalrous. But not the movie theater. And to correct a statement you made earlier, when you buy a ticket, you aren’t buying a seat. First, you are renting the seat (I’m nitpicking, but there is a huge difference).
[/quote]
Yes, I was flip in my word choice, but I suspect that there was little confusion about the underlying message.
[quote=richard1980]
Anybody can get a degree. That doesn’t mean what you say is right, nor does it make you an expert on the subject. And even experts can be wrong…even such experts as Stephen Hawking, who at least on one occasion admitted he was wrong, after years of defending his position.
[/quote]
I think my classmates who flunked out would disagree with you on that. You are free to disagree with my analysis, but the fact remains that I have some credentials (degree) and experience (as a TA one of my jobs was to explain concepts like this to other students) to back it.
[quote=richard1980]
It does impact the situation for me. And no, my experience is not the same as yours. As I previously stated, all of the digital channels (including the non-local channels) are ClearQAM in Cox’ TV Starter package here in Oklahoma City. In other words, ClearQAM is not limited to just local channels for me.
[/quote]
I must have misunderstood what you meant when you said “The non-OTA channels are junk though.” previously. My apologies.
babgvant wrote:
I believe
[quote=babgvant]
I believe our actions are always the product of a choice; there is no such thing as “no choice” in a situation.
[/quote]
True, but to quote you, “I suspect that there was little confusion about the underlying message.” It’s futile to argue with someone’s morals, so I chose to withdraw from that aspect of the conversation.
[quote=babgvant]
I can only speculate to why these sources make the claims they do; my guess is that they simplified the concepts to make a point.
[/quote]
Simplification of a concept does not involve falsely stating the concept. I could understand if one or two resources misstated the concept. But every resource I could find said the exact same thing. When all of this literature says the same thing, and it disagrees with your statement, it’s time to think about where you went wrong, not argue with the literature or try to discredit it.
[quote=babgvant]
I must have misunderstood what you meant when you said “The non-OTA channels are junk though.” previously.
[/quote]
By “junk” I meant channels with junk on them…shopping channels, C-SPAN, I think there’s even a channel in Spanish. The package may as well be local channels only, because as far as I’m concerned, those are the only channels worth watching.
richard1980 wrote:True, but
[quote=richard1980]
True, but to quote you, “I suspect that there was little confusion about the underlying message.” It’s futile to argue with someone’s morals, so I chose to withdraw from that aspect of the conversation.
[/quote]
This isn’t a moral issue, I don’t understand why anyone makes it.
[quote=richard1980]
Simplification of a concept does not involve falsely stating the concept. I could understand if one or two resources misstated the concept. But every resource I could find said the exact same thing. When all of this literature says the same thing, and it disagrees with your statement, it’s time to think about where you went wrong, not argue with the literature or try to discredit it.
[/quote]
There are many ways to approach a question, and in this case when looking at the individual inputs that make up a complex good I do not believe that I am wrong (with either case). IMO the purpose of school is to train you to look at the variables and draw appropriate conclusions. I prefer to think for myself and in this case I have the tools and training to do it. You won’t find many answers to interesting questions in a text book, or on Wikipedia.
[quote=richard1980]
By “junk” I meant channels with junk on them…shopping channels, C-SPAN, I think there’s even a channel in Spanish. The package may as well be local channels only, because as far as I’m concerned, those are the only channels worth watching.
[/quote]
There’s something we can agree on. I don’t watch anything that’s not HD, so even if I could get non-OTA on QAM (or used a ClearQAM tuner for that matter) I would feel the same 🙂
babgvant wrote:
This isn’t a
[quote=babgvant]
This isn’t a moral issue, I don’t understand why anyone makes it.
[/quote]
Morals determine if something is perceived as right or wrong. You stated it is not possible to steal a non-rivalrous good, and therefore, consuming non-rivalrous goods without paying for the right to do so is not wrong. “Is it right or wrong?” is a moral question, and the answer is based on beliefs. Beliefs do not have correct or incorrect answers, so arguing about the correct answer to the question “Is it right or wrong?” is stupid. However, all beliefs are based in part on logic. Logic is based on facts and rules, and therefore can have correct and incorrect answers, and therefore can be disputed. In this case, the logic is “it is not possible to steal a non-rivalrous good”. However, it is easy to prove that it is possible to steal a non-rivalrous good (which I will do).
The word “stolen” is the past participle of the word “steal”. The word “steal” is defined by Merriam-Webster as “to take surreptitiously or without permission”. In other words, when you take something secretly or without permission, you are stealing it. Also, permission is a requirement of not stealing something.
To sidetrack for a second, when a topic divides society fairly evenly on both sides, there is usually good logic to defend both sides of the issue, with the logic used to defend each position generally being correct and non-contradictory to the opposing position. However, when an overwhelming majority of society believes one way, and only a small percentage of society believes the other way, the logic used to defend the minority position is nearly always flawed. The question is, why use flawed logic? Remember I said beliefs are based in part on logic. Beliefs are also based in part on desire. The desire to want something to be right or wrong is very powerful and can influence the logic used to determine the answer. In cases where somebody wants to do something wrong (or wants to assume position), but doesn’t want to feel like they are doing something wrong, the subject uses flawed logic to convince themselves that the activity in question is not wrong at all.
This is exactly what you have done here. You want to have the position that it is not theft to consume non-rivalrous goods without paying for them. In an attempt to back up your position, you used the following flawed logic:
[quote=babgvant]
IMO the purpose of school is to train you to look at the variables and draw appropriate conclusions. I prefer to think for myself and in this case I have the tools and training to do it. You won’t find many answers to interesting questions in a text book, or on Wikipedia.
[/quote]
Some questions are already answered and require no additional thought. It’s when you start trying to reinvent the wheel that you end up using flawed logic to arrive at an incorrect conclusion. I’m reminded of the mathematical fallacy that states 1=2. Obviously 1 does not equal 2, but consider the following proof that it does:
Obviously there is a flaw in the logic. But unless you know what you are doing, you won’t see the flaw. The flaw of course involves breaking mathematical rules. In step 5, you divide by (a-b). However, in step 1, it is stated that a=b. If a=b, then a-b=0. Therefore, in step 5, you divide by 0. Division by 0 is not allowed.
There are a number of paradoxes that do the same thing.
richard1980 wrote:Morals
[quote=richard1980]
Morals determine if something is perceived as right or wrong. You stated it is not possible to steal a non-rivalrous good, and therefore, consuming non-rivalrous goods without paying for the right to do so is not wrong. “Is it right or wrong?” is a moral question, and the answer is based on beliefs. Beliefs do not have correct or incorrect answers, so arguing about the correct answer to the question “Is it right or wrong?” is stupid. However, all beliefs are based in part on logic.
[/quote]
I think you can say that at one point all beliefs were based in part on logic (clearly I am ignoring the quality of the logic). The problem is that after that point many beliefs become disassociated with the logic that formed them, becoming illogical as the nature of of the world we live in changes.
[quote=richard1980]
The word “stolen” is the past participle of the word “steal”. The word “steal” is defined by Merriam-Webster as “to take surreptitiously or without permission”. In other words, when you take something secretly or without permission, you are stealing it. Also, permission is a requirement of not stealing something.
[/quote]
The problem with this reasoning is that works like “take” are rooted in a [antiquated] lexicon defined before the economics of infinite supply (there’s an interesting series on Techdirt around this topic if you’re interested). When you “take” certain types of goods, you haven’t really taken it, the original owner still has the original thing in its original form.
[quote=richard1980]
To sidetrack for a second, when a topic divides society fairly evenly on both sides, there is usually good logic to defend both sides of the issue, with the logic used to defend each position generally being correct and non-contradictory to the opposing position. However, when an overwhelming majority of society believes one way, and only a small percentage of society believes the other way, the logic used to defend the minority position is nearly always flawed. The question is, why use flawed logic? Remember I said beliefs are based in part on logic. Beliefs are also based in part on desire. The desire to want something to be right or wrong is very powerful and can influence the logic used to determine the answer. In cases where somebody wants to do something wrong (or wants to assume position), but doesn’t want to feel like they are doing something wrong, the subject uses flawed logic to convince themselves that the activity in question is not wrong at all.
[/quote]
1) Volume doesn’t prove correctness
2) If you’re implying that I’m trying to rationalize my own “theft” of these types of goods, that’s not the case. I don’t use ClearQAM or “steal” other e.g. of non-rivalrous goods from the interwebs. TBC, it’s not because I don’t think it’s wrong to do it (obviously I don’t), I just don’t find it inconvenient because the discovery costs are too high and I value my time appropriately.
[quote=richard1980]
You stated that non-rivalrous goods cannot be stolen. You are assuming that permission is always granted to take, use, or consume all non-rivalrous goods. That is simply not true. Whether a good is rivalrous or not has nothing to do with whether you have permission to take, use, or consume it. Case in point: Cable TV signals are non-rivalrous. However, only select people are granted permission to consume the signals. Specifically, only people that pay the cable company a specified subscription fee are given permission to consume the signals.[/quote]
I think the nature of the good determines the economic principles that apply, not a dictionary.
[quote=richard1980]You stated that non-rivalrous goods cannot be stolen. To back up this claim, you incorrectly classified a non-rivalrous good (the movie theater) as a rivalrous good because you believe the use of the good can be stolen. Therefore, according to you, it must be rivalrous. However, as I just stated, both rivalrous and non-rivalrous goods can be stolen.[/quote]
No. Non-rivalous goods can’t be stolen because they aren’t “taken” (see above) even when consumed w/o permisson. It not about movie theaters (a non-rivalrous good tied to a rivalrous good); you can steal a chair.
[quote=richard1980]It is generally understood that when a price tag is attached to a good (as is the case with all excludable goods), permission to take, use, or consume the good is not granted unless you pay the asking price. [/quote]
Actually that’s not true. Rooftop bars around ball parks are a good e.g. of how there is significant disagreement on this topic.
[quote=richard1980]
Some questions are already answered and require no additional thought. It’s when you start trying to reinvent the wheel that you end up using flawed logic to arrive at an incorrect conclusion. [/quote]
I cannot stop anyone from accepting the solutions that are handed to them. In some cases it is more efficient to do so (i.e. the simple ones). I prefer to think for myself (using the assistance of others of course) when it comes to complex problems.
babgvant wrote:
The problem
[quote=babgvant]
The problem with this reasoning is that works like “take” are rooted in a [antiquated] lexicon defined before the economics of infinite supply (there’s an interesting series on Techdirt around this topic if you’re interested). When you “take” certain types of goods, you haven’t really taken it, the original owner still has the original thing in its original form
[/quote]
ClearQAM signals entering the home are degraded copies of the original signal. The copies can be taken. More correctly though, they are actually a piece of the original signal. And again, the piece can be taken.
[quote=babgvant]
Volume doesn’t prove correctness
[/quote]
Good point. How many people thought Earth was flat?
But, we are talking about the volume of people that say something is right/wrong. I’m just saying that when 99% of the population says something is wrong, and 1% says it’s not wrong, there’s usually flawed logic involved. Not always, but usually.
[quote=babgvant]
If you’re implying that I’m trying to rationalize my own “theft” of these types of goods, that’s not the case. I don’t use ClearQAM or “steal” other e.g. of non-rivalrous goods from the interwebs. TBC, it’s not because I don’t think it’s wrong to do it (obviously I don’t), I just don’t find it inconvenient because the discovery costs are too high and I value my time appropriately.
[/quote]
Not at all. You already stated that you don’t have a cable line connected (and that you never have). I apologize for the way that got interpreted. Definitely not my intent. It was just a sidetrack that led me into the flawed logic part of my post.
[quote=babgvant]
Rooftop bars around ball parks are a good e.g. of how there is significant disagreement on this topic.
[/quote]
Can you explain further? I’m not clear what you mean.
richard1980 wrote:ClearQAM
[quote=richard1980]
ClearQAM signals entering the home are degraded copies of the original signal. The copies can be taken. More correctly though, they are actually a piece of the original signal. And again, the piece can be taken.
[/quote]
My understanding is that splitters degrade the signal, not consumption per se. With that assumption in place use doesn’t take away the ability of others to also use it; copies are made, not taken. Goods like this are not scarce; therefore it isn’t correct to apply models and lexicons that require scarcity as a pillar.
[quote=richard1980]
Good point. How many people thought Earth was flat?
But, we are talking about the volume of people that say something is right/wrong. I’m just saying that when 99% of the population says something is wrong, and 1% says it’s not wrong, there’s usually flawed logic involved. Not always, but usually.
[/quote]
There are many places like this e.g. where conventional wisdom was accepted as fact and later found to be not true because the assumptions underlying the conclusions were not sound while the logic given those assumptions was at least somewhat legit.
We are in a transitionary period where many apply economic concepts and logic based on scarcity to goods that are not, so it’s not surprising to me that there is still significant confusion around it. For e.g. I was told in ECON100 that goods are scarce with economics defined as the science of scarcity, the professor (perhaps oversimplifying to make a point ;)) did not even mention the possibility of an infinite good.
[quote=richard1980]
Can you explain further? I’m not clear what you mean.
[/quote]
Sure. Just so there’s not confusion re. this point I’ve included the original quote below.
[quote=richard1980]
It is generally understood that when a price tag is attached to a good (as is the case with all excludable goods), permission to take, use, or consume the good is not granted unless you pay the asking price.
[/quote]
In Chicago a group of apartment buildings around Wrigley Field opened bars on the top where people could come and watch the games “for free”. The owner of the Cubs (IIRC, The Tribune Company) wasn’t happy about it applying the same principle above; they felt that the bars were stealing from them because they were providing access to the good w/o permission and sued the bars. I don’t remember* exactly what the outcome was; it doesn’t really matter who won because the point I’m trying to make is that this concept (not getting permission, by paying or otherwise = theft) is not universally accepted when it comes to these sorts of goods.
* Totally going off of memory (which is dangerous :)). I think the rooftops actually won in court, but then The Cubs decided that they were going to build a structure on the side of the park that blocked their view so the rooftop bars ended up paying something after all.
babgvant wrote:
My
[quote=babgvant]
My understanding is that splitters degrade the signal, not consumption per se. With that assumption in place use doesn’t take away the ability of others to also use it; copies are made, not taken. Goods like this are not scarce; therefore it isn’t correct to apply models and lexicons that require scarcity as a pillar.
[/quote]
You are correct that splitters degrade the signal and don’t consume it. What they actually do is divide the incoming electrical signal into however many “pieces” of output are required. Each “piece” is just a portion of the original electrical signal (minus a small amount of loss). So for a splitter with n outputs, each output contains 1/n of the original electrical signal (I’m ignoring the loss…in reality it would be slightly less than 1/n per “piece”). It doesn’t matter how many ways you split the signal, each piece still contains a portion of the original signal, but is just weaker.
In addition to dividing the electricity, a splitter creates a “copy” of the data. You are also correct that this data is infinite, provided there are enough splitters and amplifiers to make it infinite.
Now, to use your own logic against you:
The electricity traveling through all the cable lines (and attached splitters and amplifiers) doesn’t come from nowhere. It has to be purchased from somebody (the electric company) or manufactured. In any case, the cable company owns the electricity that they are using. Therefore, they own all “pieces” of it as well (much like if I own a pizza, I own all of the slices of that pizza…regardless of how I slice the pizza or where I place the slices). Since the data is carried by that electricity, it is impossible to get the data without getting the electricity. We previously agreed that cable TV service was non-rivalrous. However, only the data is non-rivalrous. The electricity is very much rivalrous (you and I can’t simultaneously use/posses the same electron at the same time). So now we are dealing with an excludable rivalrous good….which means….it can be taken without permission (stolen).
[quote=babgvant]
In Chicago a group of apartment buildings around Wrigley Field opened bars on the top where people could come and watch the games “for free”. The owner of the Cubs (IIRC, The Tribune Company) wasn’t happy about it applying the same principle above; they felt that the bars were stealing from them because they were providing access to the good w/o permission and sued the bars. I don’t remember* exactly what the outcome was; it doesn’t really matter who won because the point I’m trying to make is that this concept (not getting permission, by paying or otherwise = theft) is not universally accepted when it comes to these sorts of goods.
* Totally going off of memory (which is dangerous
). I think the rooftops actually won in court, but then The Cubs decided that they were going to build a structure on the side of the park that blocked their view so the rooftop bars ended up paying something after all.
[/quote]
Based on this limited amount of information, would have to side with the rooftop bars. The basis for this would be that customers are consuming the bars’ goods, not the stadium’s goods, and as long as one follows appropriate laws, it’s perfectly legal to open a business anywhere you want. In addition, I am assuming people occupied the upper levels of the buildings. So why weren’t the Cubs concerned about the residents peeking in? It seems to me like if they wanted to keep the non-paying eyes from seeing the action, they would have built obstructions to begin with.
richard1980 wrote:Now, to use
[quote=richard1980]
Now, to use your own logic against you:
[/quote]
I’m not sure why you continue to personalize this discussion. It’s not productive, and only serves to create negative outputs beyond the scope of the exercise.
[quote=richard1980]
The electricity traveling through all the cable lines (and attached splitters and amplifiers) doesn’t come from nowhere. It has to be purchased from somebody (the electric company) or manufactured. In any case, the cable company owns the electricity that they are using. Therefore, they own all “pieces” of it as well (much like if I own a pizza, I own all of the slices of that pizza…regardless of how I slice the pizza or where I place the slices). Since the data is carried by that electricity, it is impossible to get the data without getting the electricity. We previously agreed that cable TV service was non-rivalrous. However, only the data is non-rivalrous. The electricity is very much rivalrous (you and I can’t simultaneously use/posses the same electron at the same time). So now we are dealing with an excludable rivalrous good….which means….it can be taken without permission (stolen).
[/quote]
That’s a good point; although more a flaw in the model, because a variable was missed, than the logic layered on top. Physics is [clearly] not an area of personal expertise so forgive the basic questions.
1) When using OTA w/ an antenna, where does the required electricity come from?
2) Wouldn’t using an amp provide the potential to use your own electricity since it is driving the data beyond it in-line?
3) How does this alter the model when subscribing to internet service (so the electricity is paid for)?
[quote=richard1980]
Based on this limited amount of information, would have to side with the rooftop bars. The basis for this would be that customers are consuming the bars’ goods, not the stadium’s goods, and as long as one follows appropriate laws, it’s perfectly legal to open a business anywhere you want. In addition, I am assuming people occupied the upper levels of the buildings. So why weren’t the Cubs concerned about the residents peeking in? It seems to me like if they wanted to keep the non-paying eyes from seeing the action, they would have built obstructions to begin with.
[/quote]
The point I was trying to make was that there is ambiguity when it comes to these sorts of things; it’s not a clear cut “if something has a price tag…” world.
IIRC, there were two reasons:
1) the Cubs didn’t try to monetize it before the bars when in because there wasn’t any $ involved (although the landlords were most likely baking additional rents into the cost previously); so therefore no one to sue for “stealing”.
2) Wrigley was built before our society got crazy about “protecting” IP
babgvant wrote:
I’m not sure
[quote=babgvant]
I’m not sure why you continue to personalize this discussion. It’s not productive, and only serves to create negative outputs beyond the scope of the exercise.
[/quote]
What would you have me do? It’s you that I’m debating, it’s your position that I disagree with, and it was your logic I used in my post.
[quote=babgvant]
1) When using OTA w/ an antenna, where does the required electricity come from?
[/quote]
The electrical energy exits the broadcast antenna and travels through the air to arrive at your receiving antenna. The receiving antenna then transmits it down the coax network to the TV.
[quote=babgvant]
2) Wouldn’t using an amp provide the potential to use your own electricity since it is driving the data beyond it in-line?
[/quote]
Yes. However, an amplifier only adds more electricity to what is already present. Assume that you had an amplifier in your home. Before the signal enters the amplifier, 100% of the electrical energy belongs to the cable company. Let’s say the amplifier quadruples the signal strength (a 6 dB gain). After exiting the amplifier, 25% of the electricity belongs to the cable company, and 75% of belongs to you. You would be free to do whatever you want with your 75%. But the 25% still belongs to the cable company.
[quote=babgvant]
3) How does this alter the model when subscribing to internet service (so the electricity is paid for)?
[/quote]
The cable line has a finite bandwidth, and the cable company divides the total bandwidth of the line into 6 MHz channels. Some of those 6 MHz channels carry the electrical energy for the TV data, while other 6 MHz channels carry the electrical energy for the internet data. When you pay for internet service, you pay for the right to use only the electrical energy that is traveling through the 6 MHz channels that are dedicated to internet data. You haven’t paid for the right to use the electrical energy running through the rest of the 6 MHz channels (the ones dedicated to TV data). An easy way of preventing the TV signals from making it into the home is to install a bandpass filter on the line. The filter will allow the electrical energy on the internet channels pass through, but can block the rest of the channels. The end result is the customer doesn’t receive any TV data.
[quote=babgvant]
The point I was trying to make was that there is ambiguity when it comes to these sorts of things; it’s not a clear cut “if something has a price tag…” world.
[/quote]
Very true, and you used an excellent example to make your point.
richard1980 wrote:What would
[quote=richard1980]
What would you have me do? It’s you that I’m debating, it’s your position that I disagree with, and it was your logic I used in my post.
[/quote]
Address the logic not the speaker 🙂 On second read, I probably overreacted a bit though.
[quote=richard1980]
The electrical energy exits the broadcast antenna and travels through the air to arrive at your receiving antenna. The receiving antenna then transmits it down the coax network to the TV.
[/quote]
Thanks.
[quote=richard1980]
Yes. However, an amplifier only adds more electricity to what is already present. Assume that you had an amplifier in your home. Before the signal enters the amplifier, 100% of the electrical energy belongs to the cable company. Let’s say the amplifier quadruples the signal strength (a 6 dB gain). After exiting the amplifier, 25% of the electricity belongs to the cable company, and 75% of belongs to you. You would be free to do whatever you want with your 75%. But the 25% still belongs to the cable company.
The cable line has a finite bandwidth, and the cable company divides the total bandwidth of the line into 6 MHz channels. Some of those 6 MHz channels carry the electrical energy for the TV data, while other 6 MHz channels carry the electrical energy for the internet data. When you pay for internet service, you pay for the right to use only the electrical energy that is traveling through the 6 MHz channels that are dedicated to internet data. You haven’t paid for the right to use the electrical energy running through the rest of the 6 MHz channels (the ones dedicated to TV data). An easy way of preventing the TV signals from making it into the home is to install a bandpass filter on the line. The filter will allow the electrical energy on the internet channels pass through, but can block the rest of the channels. The end result is the customer doesn’t receive any TV data.
[/quote]
I have to wonder how much electricity we’re talking about. If it’s a lot, clearly it would impact the model and the validity of my position, but if we’re talking about a rounding error (either naturally, or via some sneakery*)…
* Like subscribing to internet service and using an amp to consume your own electricity
babgvant wrote:
I have to
[quote=babgvant]
I have to wonder how much electricity we’re talking about. If it’s a lot, clearly it would impact the model and the validity of my position, but if we’re talking about a rounding error (either naturally, or via some sneakery*)…
* Like subscribing to internet service and using an amp to consume your own electricity
[/quote]
Somebody once said, “Volume doesn’t prove correctness”. I think those words also apply here. Just because it’s a little bit of electricity that gets stolen doesn’t prove that it’s right to do so. Even if it did, where do you draw the line? $0.01 worth of electricity? $1? $10? $100? Exactly how much electricity can you take without permission before it becomes stealing?
richard1980 wrote:Just
[quote=richard1980]
Just because it’s a little bit of electricity that gets stolen doesn’t prove that it’s right to do so. Even if it did, where do you draw the line? $0.01 worth of electricity? $1? $10? $100? Exactly how much electricity can you take without permission before it becomes stealing?
[/quote]
I would prefer to ask “how wrong is it” 🙂 One of my favorite classes was about a school of thought around using economics principles to measure harm, then basing penalties and laws off of those values.
TBH, I’m not sure. It would have to be a tangible amount; if we’re talking about micro-cents it doesn’t really matter.
babgvant wrote:
I would
[quote=babgvant]
I would prefer to ask “how wrong is it” 🙂 One of my favorite classes was about a school of thought around using economics principles to measure harm, then basing penalties and laws off of those values.
TBH, I’m not sure. It would have to be a tangible amount; if we’re talking about micro-cents it doesn’t really matter.
[/quote]
Another thing we disagree on. I say stealing is stealing, no matter how much (or little) is stolen. Just because a bank robber gets away with only $1.27 instead of $10 million doesn’t make it any less wrong to rob a bank.
In Chicago a group of
Andrew did some research and the case was Chicago National League Ball Club, Inc. v. Sky Box on Waveland, L.L.C. Here is a link to an article written by several northwestern law professors describing the case. The case dealt with two issues, one “who owns the view?” and the other is “what rebroadcasts of telecasts are proper without licenses?” However the court never actually had to answer these questions as the parties settled out of court.
volfan6415 wrote: Andrew did
[quote=volfan6415]
Andrew did some research and the case was Chicago National League Ball Club, Inc. v. Sky Box on Waveland, L.L.C. Here is a link to an article written by several northwestern law professors describing the case. The case dealt with two issues, one “who owns the view?” and the other is “what rebroadcasts of telecasts are proper without licenses?” However the court never actually had to answer these questions as the parties settled out of court.
[/quote]
Thanks!
Apparently I’ve been flagged
Apparently I’ve been flagged as a spammer
Somebody want to fix that and get my post up?
richard1980
[quote=richard1980]
Apparently I’ve been flagged as a spammer
Somebody want to fix that and get my post up?
[/quote]
It’s not just you, that happened to me as well, and I started the thread!
richard1980 wrote:Apparently
[quote=richard1980]
Apparently I’ve been flagged as a spammer
Somebody want to fix that and get my post up?
[/quote]
done
richard1980 wrote:Second, the
[quote=richard1980]
Second, the cost of the ticket covers much more than just seat rental. Part of the money goes straight to the studio that made the movie, per the agreement the theater has with the studio. Additionally, you are paying a piece of all the overhead costs associated with operating the theater…things like electricity, employee earnings/benefits, cleaning supplies, maintenance/repair, etc. Those are all non-rivalrous goods. Additionally, the cost incurred by the theater to run the theater when only one customer is present is virtually the exact same as when two customers are present, which means the marginal cost is $0. Hence the reason the theater is classified as non-rivalrous.
[/quote]
I think there are some incorrect assumptions in the model above that I wanted to address, but haven’t had time to (been traveling). To best highlight this I made a chart.
There are fixed costs (rent, equipment, etc.) involved in running a theater, but it’s not true that there isn’t a marginal cost (MC) associated with ticket sales. These marginal costs can be broken into two groups:
Soft: The amount taken by the studios. I’ve classified this is a separate type of MC because it’s driven off a contractual obligation and not a tangible per unit cost of business. It’s a little OT, but I think it’s interesting to highlight how the huge gap b/w soft MC and hard MC creates significant potential for cheating 🙂
Hard: This includes all of the tangible per unit costs. In this scenario it would include employee opportunity cost (time spent cleaning the theater isn’t spent doing other things; i.e. 2x the seats rented = 2x the mess), additional utilities expenses (toilet flushes, hand drys, water fountain use, additional cooling, etc.), and other things like that.
I made some assumptions when drawing the data points which should be disclosed:
1) I don’t know what the exact take is by the studios so I guessed based on what I’ve read about how their pricing model works. It could be wrong, but the point is still valid even if the numbers are slightly off. The model is: take as much as you can (I’ve read in many places that theater owners don’t make any real $ in the first two weeks on tickets because of this cost so I estimated the initial take at 90%), taper off over the next few weeks, then take very little (i.e. once it reaches the dollar theaters).
2) Assuming that price approaches MC over time I needed to work backwards to derive the hard MC. Using dollar theaters (do these exist anymore?) we can extrapolate the lowest possible selling price and therefore hard MC. Note that these lines to not touch in the chart, so there is still a small profit (the area b/w total MC and ticket price) on ticket sales even at that price, which may also be off (i.e. $1 theaters may sell at cost).
3) Hard MC * units does not scale linearly. This the weakest one, mostly driven off of the [potentially flawed] assumption that more people in a space creates exponentially more mess (e.g. more accidental spills due to bumping) and requires more per unit cooling (people generate a lot of heat).
4a) Avg Ticket Price over time is totally made up. Since it doesn’t really matter what this number is given the other assumptions, I just chose something that seemed to make sense.
4b) Avg Ticket Price is derived from anecdotal experience. At least in Chicago, theater owners don’t generally accept coupons or discount ticket vouchers during the first two weeks of a run (probably because of the soft MC). After that time period, these restrictions are lifted which brings the average ticket price down.
I appreciate the amount of
I appreciate the amount of trouble you went through, but I think you are misunderstanding what I have stated. I have not said that there are never any marginal costs. What I said was the marginal cost between 1 and 2 customers is $0. MC is not linear by definition. A good only needs to have 1 level of production where MC=$0 for it to be non-rivalrous. In this case, I chose the 2nd level of production. At that specific production level, the good is non-rivalrous, but that does not mean that at every production level the good will remain non-rivalrous. As you said, it’s a continuum. Now, when MC can never equal $0, that would be a rivalrous good.
Consider the following explanation for why I say the theater is non-rivalrous at the 2nd production level:
2 people approach the theater. These two people will be the only two customers. Each purchases a ticket from the ticket booth and proceeds directly to their seat. Both sit through the entire movie from beginning to end without leaving their seat. At the end of the movie, both people proceed directly out of the theater. Before closing the theater, the cleaning crew cleans the entire theater (yes, I know it doesn’t make much sense, but that’s the proper way to do it). What marginal costs are there? I see absolutely no marginal cost…not even electricity. The 2nd person can’t produce enough extra heat in the theater to even raise the temperature enough that the thermostat could even measure it, much less actually require cooling the place.
Even if we were to alter that scenario and have one of the people go to the restroom and flush the toilet…how much does that water cost? Here in Oklahoma City, it’s $2.45 per 1000 gallons. If you figure it’s an older toilet and uses 3.4 gallons per flush (looked it up on Wikipedia), that’s only $0.00833. We don’t have fractions of a penny, so the cost is actually $0.00. Of course, this is irrelevant anyway if both people go to the restroom, since the toilet flush then isn’t actually a marginal cost.
It occurred to me that this
It occurred to me that this logic could be applied to any production level. All you need is a customer that goes in, watches the movie, and leaves. No going to the restroom, no water fountain, no popcorn…nothing. Enter, watch, exit. MC=$0. The only production level where MC=$0 would not be possible is the first production level (because the first customer’s MC is the entire cost of having the theater open in the first place…without the first customer, the theater would shut down and everyone would go home for the night).
And to correct myself (I’m not sure what I was thinking), ignore the last sentence in my previous post. I was clearly not thinking straight when I wrote that.
richard1980 wrote:
It
[quote=richard1980]
It occurred to me that this logic could be applied to any production level. All you need is a customer that goes in, watches the movie, and leaves. No going to the restroom, no water fountain, no popcorn…nothing. Enter, watch, exit. MC=$0.
[/quote]
You’re ignoring wear and tear on the seats and carpet, A/C costs for compensating for body heat. Sure, miniscule amounts, but not 0 and directly related to the number of guests.
mpatnode wrote:
You’re
[quote=mpatnode]
You’re ignoring wear and tear on the seats and carpet, A/C costs for compensating for body heat. Sure, miniscule amounts, but not 0 and directly related to the number of guests.
[/quote]
Marginal cost can be expressed by the following mathematical formula:
MC = ΔTC / ΔQ
For anyone that doesn’t know, the Δ character is the Greek letter Delta. In mathematics, Delta is used to express the change in a variable. In this case, I’ve used it to express the change in variable TC (Total Cost) and variable Q (Quantity). By the definition of marginal cost, ΔQ must always be equal to 1. But rather than express it that way in the formula above, I chose to show ΔQ for one reason: The rules of mathematics prohibit dividing by 0. Therefore, ΔQ can never equal 0. In other words, in order to calculate MC, there must be a change in Q. Even if TC changes, you can’t recalculate MC until Q changes. The rules of mathematics forbid it.
So here’s an example of why this is important: Assume you start with TC=0 and Q=0. Let’s say there is a fixed cost of $5 to produce each unit. So to produce 1 unit, TC changes by 5 (ΔTC=5), and Q changes by 1 (ΔQ=1). So we get:
Everything is good to go. But now let’s say that when you made the first unit, you broke something in the process. Before you can make the next unit, you need to repair or replace the broken thing. It doesn’t really matter which one you do, so let’s just say you can replace the broken thing for $7. Now if you didn’t want to make another unit, you could just stop right there. Even though you have a broken thing, you don’t have to pay anything unless you want to repair/replace it. In other words, breaking stuff is completely free. If you choose not to fix it, TC stays where it is, but you can’t change Q (production stops). If you want to change Q (make another unit), you must pay the $7 to fix the broken thing. So TC changes by 7 and Q changes by 0, so you would now have:
Costs went up, but MC didn’t. Why? Because MC can’t be calculated yet. The rules of math prohibit dividing by 0, so that calculation is not possible. You must first change Q before you can recalculate MC. But what happens to the $7 you spent fixing the broken thing? That $7 stays with ΔTC until you are finally able to increase Q by 1 unit. So if you have to fix 3 different things, each for $7, ΔTC ends up being $7+$7+$7 for the next time you calculate MC.
Back to producing units: The broken thing is now fixed and it’s going to cost an additional $5 to produce another unit. So TC is increasing by another $5 and Q is increasing by 1. So now you have:
So MC went from 5 for Q=1 to 12 for Q=2.
So why did I go through all of the trouble to explain all of that? To prove a few points:
For body heat, I explained before that a single human being does not produce enough body heat to heat the air in the room enough to cost any money. We aren’t talking about a closet. We’re talking about a movie theater. Consider how much airspace is in a typical theater. What’s a good estimate? 100’x200’x20′? That’s 400,000 cubic feet of air. I’d like to see anyone heat 400,000 cubic feet of air even 1 degree using nothing but body heat. In reality, outside temperatures are going to heat the room much more than a human being will…assuming of course it’s hot outside. But who says it’s hot outside? It could just as likely be cold outside. Even if one person could influence the temperature of a 400,000 cubic foot room, if it’s cold outside, they would actually be helping the heating system…which means they are reducing the theater’s heating costs…wouldn’t that be a negative MC?
More to come…..
richard1980 wrote:So here’s
[quote=richard1980]
So here’s an example of why this is important: Assume you start with TC=0 and Q=0. Let’s say there is a fixed cost of $5 to produce each unit. So to produce 1 unit, TC changes by 5 (ΔTC=5), and Q changes by 1 (ΔQ=1).
[/quote]
In this case Q is the # of tickets. The “fixed cost” of $5 mentioned above is the MC.
[quote=richard1980]
For body heat, I explained before that a single human being does not produce enough body heat to heat the air in the room enough to cost any money.
[/quote]
From what I’ve read, on average the human body radiates 100W of heat.
Ever notice how it’s really cold in a theater when you’re the only one there and it gradually warms up as more people arrive? It’s not because they turned on the heat, it’s because of the radiant energy from the bodies in the room.
richard1980 wrote:I
[quote=richard1980]
I appreciate the amount of trouble you went through, but I think you are misunderstanding what I have stated. I have not said that there are never any marginal costs. What I said was the marginal cost between 1 and 2 customers is $0.
[/quote]
Moving from 0->N units isn’t costless in this scenario. A percentage of each ticket sold is a direct cost outlay to the theater (the soft cost mentioned previously), and even if the person doesn’t explicitly use the facilities there are still implicit marginal costs as the person interacts with the environment (dirt on the shoes, wear on the carpets, body heat, employee time consumed purchasing the ticket and authenticating later, etc.). It is true that one could purposely minimize the explicit costs if they wanted to, but that value was modeled as an average. so even if there were some masochists in the crowd it would still be non-zero when aggregated across everyone in the theater.
[quote=richard1980]
MC is not linear by definition.
[/quote]
MC can be linear, it is just the additional cost incurred moving from N to N+1 units. In this scenario I would expect it to be somewhat linear (not perfect though) up to the theater’s capacity; moving beyond that point requires a long term outlook. It’s important to note that the graph isn’t the usual price-quantity that MC is usually drawn on (in this case X is time in weeks) so even if it’s very non-linear that isn’t what the graph demonstrates. X can be thought of as the average MC at a give point in time.
[quote=richard1980]
A good only needs to have 1 level of production where MC=$0 for it to be non-rivalrous. In this case, I chose the 2nd level of production. At that specific production level, the good is non-rivalrous, but that does not mean that at every production level the good will remain non-rivalrous. As you said, it’s a continuum. Now, when MC can never equal $0, that would be a rivalrous good.
[/quote]
The most glaring issue with this is that the difference b/w short and long term outlooks is missing. In the long term all cost are marginal, so the cost of renting (producing) 1 seat in a theater is large because it includes all of the upfront costs + the MC modeled in my graph. In the short term however, those upfront and non-marginal operational costs are considered fixed (i.e. the do not vary with production); even if the theater sold no tickets they would still have to pay them.
With that in mind, moving from 0 to 1, exhibits a MC consistent with the model I presented earlier. A percent goes to the studio (soft MC) and a percent is used to cover the marginal impact of the person consuming the movie in a physical* space (hard MC). We can argue about the amounts, but that isn’t terribly relevant because the actual number doesn’t matter that much, as long as it is significantly non-zero (which in this case is true).
Like I said in the assumptions section, because we know the relationship b/w MC and price we can observe price and actor behavior then extrapolate MC by modeling it over time. If MC were truly zero, it would be economically viable to sell tickets at that price ($0); something we haven’t observed in the theater market.
* Even if you disagree with the marginal environmental impact aspect of the model, it is impossible to ignore the marginal cost associated with printing a physical ticket.
babgvant wrote:
In this case
[quote=babgvant]
In this case Q is the # of tickets. The “fixed cost” of $5 mentioned above is the MC.
[/quote]
For Q=1, yes. But not for Q=2. For Q=2 (in my example), MC=12. If MC were to equal 5 at Q=2, the $7 wouldn’t have been spent, and thus Q could not equal 2.
Another thing to look at: What if there is no fixed cost? I used a fixed cost in my example, but there doesn’t have to be a fixed cost. It could just as easily be $0. In that case, MC would have been $0 for Q=1 and $7 for Q=2.
[quote=babgvant]
From what I’ve read, on average the human body radiates 100W of heat.
Ever notice how it’s really cold in a theater when you’re the only one there and it gradually warms up as more people arrive? It’s not because they turned on the heat, it’s because of the radiant energy from the bodies in the room.
[/quote]
And what exactly is the effect of 100 watts of heat on a 400,000 cubic foot theater? Rather than try to figure out what that means in terms of cost, I think I’ll go with “it’s cold outside”. That reduces the heating bill, and thus does not increase cost.
[quote=babgvant]
A percentage of each ticket sold is a direct cost outlay to the theater (the soft cost mentioned previously)
[/quote]
You are looking at it like the theater has to pay a percentage to the studio as a cost for selling the tickets. However, there’s another way to look at it: The movie theater is just a broker hired by the studio to collect the studio’s money. If the studio get’s 90% of the ticket sale, you could say that the studio is paying a 10% commission to the theater for selling the movie tickets. Alternatively, you could also say that the movie theater is selling the ticket for the 10% cost and is collecting the 90% on behalf of the studio.
So is the glass half empty, or is it half full?
[quote=babgvant]
dirt on the shoes, wear on the carpets
[/quote]
Wear and tear…see my previous post. The cost for this is part of the MC for the next unit produced after the cost is incurred. How many times have you been to the movie theater to see someone following you around with a vacuum cleaner or broom? That would be one crowded theater.
[quote=babgvant]
employee time consumed purchasing the ticket and authenticating later, etc.
[/quote]
Again, the employee is getting paid whether they sell/authenticate a ticket or not. It costs the same amount of money for the employee to twiddle their thumbs as it does to sell/authenticate tickets.
I remember when I was younger I had a job at McDonalds, where I cooked food. Do you know how many times I was told “Quit standing around doing nothing….grab a towel and clean your area”? Nevermind the fact that it was already clean, and I was going to have to clean it again at the end of my shift, and at closing time, it was going to be cleaned (very thoroughly) again.
[quote=babgvant]
but that value was modeled as an average. so even if there were some masochists in the crowd it would still be non-zero when aggregated across everyone in the theater.
[/quote]
Since when do you average costs or aggregate anything to compute MC? You don’t. MC is the cost directly associated with producing that one particular unit. Not any other unit. That one unit. Trying to calculate one level up doesn’t work because you are calculating cost for the lot, not for the unit. That’s not marginal cost. Plus, averaging and aggregating is done to calculate an average cost, not a marginal cost.
[quote=babgvant]
MC can be linear, it is just the additional cost incurred moving from N to N+1 units.
[/quote]
To clarify, I did not mean that MC could not be linear. I just meant that the definition of MC does not require it to be linear. As I showed in my previous post, MC is easily non-linear.
[quote=babgvant]
The most glaring issue with this is that the difference b/w short and long term outlooks is missing. In the long term all cost are marginal, so the cost of renting (producing) 1 seat in a theater is large because it includes all of the upfront costs + the MC modeled in my graph. In the short term however, those upfront and non-marginal operational costs are considered fixed (i.e. the do not vary with production); even if the theater sold no tickets they would still have to pay them.
[/quote]
MC is short term by definition. The cost of increasing production by one unit. It is not the cost of increasing production by 10 units or 100 units or 1000 units. 1 unit. That is about as short term as you can get.
[quote=babgvant]
If MC were truly zero, it would be economically viable to sell tickets at that price ($0); something we haven’t observed in the theater market.
[/quote]
Like I said, MC is calculated on a per-unit basis. MC does not always have to equal $0. Perhaps there is only one Q that will make MC=$0. However, the definition of a non-rivalrous good includes “if, for any level of production, MC=$0”. If you can make MC=$0 for any unit (Q), it’s a non-rivalrous good. If you can’t, it’s a rivalrous good.
[quote=babgvant]
* Even if you disagree with the marginal environmental impact aspect of the model, it is impossible to ignore the marginal cost associated with printing a physical ticket.
[/quote]
Again, this is a “wear and tear” item. The ink, paper, and machine were all purchased prior to printing the ticket. The entire cost for purchasing those items is used to calculate the MC of the very first ticket sold after those items are purchased. From that point forward, there is nothing else to purchase until the ink is dry or the paper runs out. Therefore, until there is something to purchase, TC cannot be increased. All printed tickets except for 1 have a cost of $0. Only when it’s time to spend more money can TC be increased, and the entire cost of that purchase will go into the MC for the next ticket sold.
richard1980 wrote:For Q=1,
[quote=richard1980]
For Q=1, yes. But not for Q=2. For Q=2 (in my example), MC=12. If MC were to equal 5 at Q=2, the $7 wouldn’t have been spent, and thus Q could not equal 2.
[/quote]
I don’t think this makes sense (or at least I’m not able to follow the logic). Are you saying that the TC for 2 units is 17?
[quote=richard1980]
Another thing to look at: What if there is no fixed cost? I used a fixed cost in my example, but there doesn’t have to be a fixed cost. It could just as easily be $0. In that case, MC would have been $0 for Q=1 and $7 for Q=2.
[/quote]
In theory, I suppose it’s possible to produce goods w/o a fixed initial cost. I struggle to find any e.g. in reality though. More importantly, since we are talking about a market (theaters) with large fixed costs I’m not sure how this is material.
[quote=richard1980]
And what exactly is the effect of 100 watts of heat on a 400,000 cubic foot theater? Rather than try to figure out what that means in terms of cost, I think I’ll go with “it’s cold outside”. That reduces the heating bill, and thus does not increase cost.
[/quote]
Observationally, quite a bit.
[quote=richard1980]
You are looking at it like the theater has to pay a percentage to the studio as a cost for selling the tickets.
[/quote]
AFAIK, this is the way it works.
[quote=richard1980]
However, there’s another way to look at it: The movie theater is just a broker hired by the studio to collect the studio’s money. If the studio get’s 90% of the ticket sale, you could say that the studio is paying a 10% commission to the theater for selling the movie tickets. Alternatively, you could also say that the movie theater is selling the ticket for the 10% cost and is collecting the 90% on behalf of the studio.
So is the glass half empty, or is it half full?
[/quote]
I’m not sure thinking about it this way (instead of the way it really works) changes the fundamentals.
[quote=richard1980]
Wear and tear…see my previous post. The cost for this is part of the MC for the next unit produced after the cost is incurred. How many times have you been to the movie theater to see someone following you around with a vacuum cleaner or broom? That would be one crowded theater.
[/quote]
I think it is erroneous to focus on when the theater realizes these costs instead of how the are incurred. Just because the theater decides to defer paying (i.e. vacuuming, replacing carpets, etc.) it has no effect on the when and how the damage is done.
If it helps, think about how credit cards work. We buy (cost incurred) things on a short term loan then pay it off in batch on a deferred scheduled (end of billing cycle). In principle this is the same concept, deferring payment for convenience or efficiency.
[quote=richard1980]
Again, the employee is getting paid whether they sell/authenticate a ticket or not. It costs the same amount of money for the employee to twiddle their thumbs as it does to sell/authenticate tickets.
I remember when I was younger I had a job at McDonalds, where I cooked food. Do you know how many times I was told “Quit standing around doing nothing….grab a towel and clean your area”? Nevermind the fact that it was already clean, and I was going to have to clean it again at the end of my shift, and at closing time, it was going to be cleaned (very thoroughly) again.
[/quote]
Wasted employee time should be modeled separately. I agree that in practice this isn’t much, but as part of a model intentionally simplified to help make it easier to understand…
Looking too closely at the implementation creates a forest/trees problem.
[quote=richard1980]
Since when do you average costs or aggregate anything to compute MC? You don’t. MC is the cost directly associated with producing that one particular unit. Not any other unit. That one unit. Trying to calculate one level up doesn’t work because you are calculating cost for the lot, not for the unit. That’s not marginal cost. Plus, averaging and aggregating is done to calculate an average cost, not a marginal cost.
[/quote]
Why not? Any # can be averaged. There is an average MC for a batch of goods, in practice (because most markets don’t have real time pricing) this is how OEMs set prices.
[quote=richard1980]
MC is short term by definition. The cost of increasing production by one unit. It is not the cost of increasing production by 10 units or 100 units or 1000 units. 1 unit. That is about as short term as you can get.
[/quote]
MC is not short term by definition. In fact, in the long term, all cost are marginal including the generally large (especially in this case) upfront cost that is considered “fixed” in the short term.
babgvant wrote:
I don’t
[quote=babgvant]
I don’t think this makes sense (or at least I’m not able to follow the logic). Are you saying that the TC for 2 units is 17?
[/quote]
Yes. TC was $5 for the first unit, $7 for repair required to make the 2nd unit, and $5 for the 2nd unit. $5 + $7 + $5 = $17. The cost to make the 2nd unit (the MC for Q=2) is $7 for repairs + $5 fixed cost = $12.
[quote=babgvant]
And what exactly is the effect of 100 watts of heat on a 400,000 cubic foot theater? Rather than try to figure out what that means in terms of cost, I think I’ll go with “it’s cold outside”. That reduces the heating bill, and thus does not increase cost.
Observationally, quite a bit.
[/quote]
I read that a 100 watt light bulb is only about 2% efficient…meaning it produces 98 watts of heat. Try heating a movie theater with a single 100 watt light bulb and see what happens.
I’ll admit that a person does give off heat. But that is not the question. The question is whether 1 person gives off enough heat to cause any cost to be incurred (force the A/C to come on). In a large airspace like a movie theater, no, it’s not going to happen. One person sitting in a movie theater simply cannot heat it enough for the thermostat to register any change in temperature, and thus this person is not going to cause the A/C to come on. You’ll need a lot more than 1 person to cause the A/C to come on.
Just for the heck of it, let’s say 99 people can sit in the room without the A/C coming on, but if another person walks in, the A/C will come on. The entire cost of the electricity would be used to calculate MC for Q=100. None of the electrical cost can be used to calculate MC for Q={1, 2, 3 … 97, 98, 99}. Why? Because none of those first 99 people caused the A/C to come on.
Additionally, you are ignoring the fact that perhaps the A/C doesn’t come on. Like I said, it could be cold outside.
[quote=babgvant]
You are looking at it like the theater has to pay a percentage to the studio as a cost for selling the tickets.
AFAIK, this is the way it works.
However, there’s another way to look at it: The movie theater is just a broker hired by the studio to collect the studio’s money. If the studio get’s 90% of the ticket sale, you could say that the studio is paying a 10% commission to the theater for selling the movie tickets. Alternatively, you could also say that the movie theater is selling the ticket for the 10% cost and is collecting the 90% on behalf of the studio.
So is the glass half empty, or is it half full?
I’m not sure thinking about it this way (instead of the way it really works) changes the fundamentals.
[/quote]
So I looked it up and found out how it actually works. There are actually two common methods used.
The first method involves the theater paying a set price to show the movie. In this case, the cost of the movie is paid up front, and therefore, would be part of the MC for the first ticket (and only the first ticket) sold. The theater then keeps all revenue earned from ticket sales. This is common, but not nearly as common as other methods.
The second method is the most common and is what we have been talking about. It involves the theater and the distributor splitting the sales revenue (revenue sharing). What is important about revenue sharing is it’s a 2-sided coin. As I previously stated, it can be perceived as party 1 paying party 2, or vice versa. There is no clear cut answer. The glass can be either half empty or half full, depending on how you choose to look at it. The only thing that is for certain is that it’s half a glass of water (or whatever it contains). And in this case, the only thing that is for certain is the theater is entitled to their share of the money, and the distributor is entitled to their share. Now with that said, I did find out something interesting. Apparently there’s this thing called a house allowance, or a “house nut”. This is money the distributor pays the theater to operate the theater. I have not been able to figure out exactly how this house nut is paid, but from what I’ve read, it appears to come out of the revenue pile. We can therefore deduce that some of the tickets sold contribute to the house nut, and thus have no “cost” to sell. So even if you choose to perceive the distributor’s cut as a cost to the theater, you cannot ignore this.
[quote=babgvant]
I think it is erroneous to focus on when the theater realizes these costs instead of how the are incurred. Just because the theater decides to defer paying (i.e. vacuuming, replacing carpets, etc.) it has no effect on the when and how the damage is done.
[/quote]
I do not know how to make this any more clear. Tearing up things/breaking them/making them dirty DOES NOT COST ANY MONEY. You want proof? Pick up a pencil and break it. Now how much money did you have to pay to break the pencil? $0!!! You incur absolutely no cost until you go buy a new pencil. Only when you buy a new pencil can you say your cost has increased. And only after you produce another unit can you use the cost of the new pencil to calculate MC. This is basic mathematics.
[quote=babgvant]
If it helps, think about how credit cards work. We buy (cost incurred) things on a short term loan then pay it off in batch on a deferred scheduled (end of billing cycle). In principle this is the same concept, deferring payment for convenience or efficiency.
[/quote]
Actually, it is not at all like how a credit card works. A credit card is just a different form of currency…it’s electronic cash. When you purchase something with a credit card, cost is immediately incurred.
Consider this: If you have $1000 cash and a credit card with a limit of $1000, you have the ability to spend $2000. If you spend $50 in cash, you have reduced that spending power to $1950. However, if you had charged the $50 to the credit card, you would still have reduced spending power to $1950.
[quote=babgvant]
Wasted employee time should be modeled separately. I agree that in practice this isn’t much, but as part of a model intentionally simplified to help make it easier to understand…
Looking too closely at the implementation creates a forest/trees problem.
[/quote]
You are the one that keeps insisting it cost more money for labor if there is more work to do. I’m just pointing out that you are wrong. If you pay somebody $10 per hour for 8 hours of work it doesn’t matter if they do nothing for 8 hours or if they do everything for 8 hours. Cost is still the same no matter what. It’s $80.
In addition to that, I’m also trying to get you to understand that cleaning/maintenance is not part of the MC for the people that caused the mess. That is the required expense to make the next unit (selling the first ticket the next day). It is not an expense required to sell the tickets that have already been sold.
[quote=babgvant]
Why not? Any # can be averaged.
[/quote]
Because marginal cost is not averaged. Marginal cost is the number used to calculate the average.
[quote=babgvant]
MC is not short term by definition. In fact, in the long term, all cost are marginal including the generally large (especially in this case) upfront cost that is considered “fixed” in the short term.
[/quote]
Yes, in the long term, all costs are marginal (except the costs that have been incurred since the last unit was produced). However, that does not mean that marginal costs are long term. Marginal cost is the cost to increase production by 1 unit. There is nothing long term about that.
Your statement is like saying “all animals are dogs” just because all dogs are animals. That is simply not true.
richard1980 wrote:Just for
[quote=richard1980]
Just for the heck of it, let’s say 99 people can sit in the room without the A/C coming on, but if another person walks in, the A/C will come on. The entire cost of the electricity would be used to calculate MC for Q=100. None of the electrical cost can be used to calculate MC for Q={1, 2, 3 … 97, 98, 99}. Why? Because none of those first 99 people caused the A/C to come on.
[/quote]
That isn’t correct. Each of the people in the room raised the temp by some amount, the 100th was just the one that pushed it over the thermostat’s threshold.
[quote=richard1980]
Additionally, you are ignoring the fact that perhaps the A/C doesn’t come on. Like I said, it could be cold outside.
[/quote]
Again, not correct. The theater still has to pre-load for the show (why it’s cold when you walk in).
All that said, I’m not sure why you want to focus on this point so much. The important part is that there is some cost tied to the number of people in a theater. This effect is obvious to anyone who has paid attention to the effect of people in a room to the temperature of a room.
[quote=richard1980]
The first method involves the theater paying a set price to show the movie. In this case, the cost of the movie is paid up front, and therefore, would be part of the MC for the first ticket (and only the first ticket) sold. The theater then keeps all revenue earned from ticket sales. This is common, but not nearly as common as other methods.
[/quote]
In this case, it is a fixed cost in the short term and MC in the long term.
[quote=richard1980]
The second method is the most common and is what we have been talking about. It involves the theater and the distributor splitting the sales revenue (revenue sharing). What is important about revenue sharing is it’s a 2-sided coin. As I previously stated, it can be perceived as party 1 paying party 2, or vice versa. There is no clear cut answer. The glass can be either half empty or half full, depending on how you choose to look at it. The only thing that is for certain is that it’s half a glass of water (or whatever it contains). And in this case, the only thing that is for certain is the theater is entitled to their share of the money, and the distributor is entitled to their share. Now with that said, I did find out something interesting. Apparently there’s this thing called a house allowance, or a “house nut”. This is money the distributor pays the theater to operate the theater. I have not been able to figure out exactly how this house nut is paid, but from what I’ve read, it appears to come out of the revenue pile. We can therefore deduce that some of the tickets sold contribute to the house nut, and thus have no “cost” to sell. So even if you choose to perceive the distributor’s cut as a cost to the theater, you cannot ignore this.
[/quote]
The existence of a “house nut” would change the model to some extent, but if it’s not tied directly to quantity it lowers fixed costs not marginal.
[quote=richard1980]
I do not know how to make this any more clear. Tearing up things/breaking them/making them dirty DOES NOT COST ANY MONEY. You want proof? Pick up a pencil and break it. Now how much money did you have to pay to break the pencil? $0!!! You incur absolutely no cost until you go buy a new pencil. Only when you buy a new pencil can you say your cost has increased. And only after you produce another unit can you use the cost of the new pencil to calculate MC. This is basic mathematics.
[/quote]
1) Repeating something doesn’t make it so.
2) In this e.g. you have incurred a cost when you broke the pencil because you reduced its value which has the effect of lowering your net worth. This cost is realized when you replace it.
[quote=richard1980]
Actually, it is not at all like how a credit card works. A credit card is just a different form of currency…it’s electronic cash. When you purchase something with a credit card, cost is immediately incurred.
Consider this: If you have $1000 cash and a credit card with a limit of $1000, you have the ability to spend $2000. If you spend $50 in cash, you have reduced that spending power to $1950. However, if you had charged the $50 to the credit card, you would still have reduced spending power to $1950.
[/quote]
This e.g. completely missed the point of when a cost incurred vs. when it is realized. Obviously, there are other ways to use a credit card, but that isn’t material to this discussion, or the concept that was demonstrated.
[quote=richard1980]
You are the one that keeps insisting it cost more money for labor if there is more work to do. I’m just pointing out that you are wrong. If you pay somebody $10 per hour for 8 hours of work it doesn’t matter if they do nothing for 8 hours or if they do everything for 8 hours. Cost is still the same no matter what. It’s $80.
[/quote]
If there are 10 hours of tasks, 2 of which are marginally created… Sure you’re employees can go home after 8 hours, but then 2 hours of work are deferred until later.
When I worked at McDonald’s, when I closed we had to stay until all the work was done; even if it took longer than expected.
[quote=richard1980]
Because marginal cost is not averaged. Marginal cost is the number used to calculate the average.
[/quote]
How is that any different from what I did before (i.e. Average MC per Q)?
[quote=richard1980]
Yes, in the long term, all costs are marginal (except the costs that have been incurred since the last unit was produced). However, that does not mean that marginal costs are long term. Marginal cost is the cost to increase production by 1 unit. There is nothing long term about that.
[/quote]
I’m not sure that what is meant by short and long term when used in an economic context (or what was said previously on this subject for that matter) is captured in the statement above.
babgvant wrote:
richard1980
[quote=babgvant]
Just for the heck of it, let’s say 99 people can sit in the room without the A/C coming on, but if another person walks in, the A/C will come on. The entire cost of the electricity would be used to calculate MC for Q=100. None of the electrical cost can be used to calculate MC for Q={1, 2, 3 … 97, 98, 99}. Why? Because none of those first 99 people caused the A/C to come on.
That isn’t correct. Each of the people in the room raised the temp by some amount, the 100th was just the one that pushed it over the thermostat’s threshold.
[/quote]
Yes, each of the people in the room raised the temp by some amount, but they didn’t cause the A/C to come on, and therefore, it cost $0 to maintain the room’s temperature if only 99 units are produced. The 100th person is what caused the room’s temperature to rise to a point that the A/C had to come on. If the 100th unit had not been produced, there would have been no cost incurred. Here’s a chart that explains this:
It only costs money to cool the room if the blue line crosses the red line. It’s very simple to understand, but I do not see why you cannot understand this.
[quote=babgvant]
All that said, I’m not sure why you want to focus on this point so much.
[/quote]
Because you insist that each person causes a cost to be incurred when they don’t. Yes, they contribute to raising the temperature of the room, but that does not cost anything until the room’s temperature crosses a threshold that causes the A/C to come on. If the A/C doesn’t come on, there is no cost to be paid! And even if the A/C does come on, the increase in cost associate with that event does not get averaged. MC is a value that corresponds to each individual value for Q.
[quote=babgvant]
Additionally, you are ignoring the fact that perhaps the A/C doesn’t come on. Like I said, it could be cold outside.
Again, not correct. The theater still has to pre-load for the show (why it’s cold when you walk in).
[/quote]
The cost of bringing the room up to a comfortable temperature is a requirement for selling the first ticket to the movie (nobody is going to sit through the movie if the room is too cold…they will require a refund). Therefore, the cost is used to calculate MC for Q=(whatever number is the first ticket to that movie). It’s going to be quite high because that’s a lot of air to heat. But, after you sell the first ticket, the electrical cost starts to taper off because each person is contributing heat to the room. Each person added to the room decreases the amount of electricity required to maintain the room’s temperature, until at some point you hit a point of equilibrium where the people are able to sustain the room’s temperature without using a heater. After that point has been crossed, it costs $0 to heat the room.
So in other words, this is the exact opposite of cooling the room. When cooling the room, it costs $0 until the threshold is crossed, after which costs start increasing. When heating the room, costs start out high and then start decreasing until the threshold is crossed, after which cost=$0.
[quote=babgvant]
The first method involves the theater paying a set price to show the movie. In this case, the cost of the movie is paid up front, and therefore, would be part of the MC for the first ticket (and only the first ticket) sold. The theater then keeps all revenue earned from ticket sales. This is common, but not nearly as common as other methods.
In this case, it is a fixed cost in the short term and MC in the long term.
[/quote]
You are changing the scale of measurement from unit=ticket to unit=showing. That’s the manufacturing equivalent of a “lot of units”, not the actual unit itself. Perhaps that’s the entire problem here. You are measuring the wrong thing.
And for the record, if a unit could equal a showing, then yes, it would be impossible for MC to equal $0, and thus it would be rivalrous.
[quote=babgvant]
The existence of a “house nut” would change the model to some extent, but if it’s not tied directly to quantity it lowers fixed costs not marginal.
[/quote]
Again, you are wrong. MC is the change in total cost to produce one unit. Total cost = fixed costs + variable costs.
And it does change things quite drastically. If the theater gets $5000 off the top of ticket sales, and each ticket is $10, 100% of the revenue from the first 500 tickets sold goes to the theater. None of it goes to the distributor, so there is no “cost” for selling those 500 tickets (I use the term “cost” here to represent sharing the revenue with the distributor).
[quote=babgvant]
1) Repeating something doesn’t make it so.
[/quote]
I’m hoping if I say it enough times, it will finally sink in.
[quote=babgvant]
2) In this e.g. you have incurred a cost when you broke the pencil because you reduced its value which has the effect of lowering your net worth. This cost is realized when you replace it.
[/quote]
First, you are assuming the value of the pencil is lowered because it is broken. That is not always the case. The pencil is worth whatever someone is willing to pay for it. This was one of the first things I learned about finance when I was a kid. Just because the book says the baseball card is worth $20 doesn’t make it actually worth $20. But this is actually irrelevant anyway.
Second, breaking the pencil is not actually cost incurred. The cost was incurred (and realized) when you purchased the pencil. The cost of the pencil would have therefore been used to calculate MC for the unit that was produced after the pencil was purchased. Breaking the pencil does not mean you get to account for the purchase price again. You have to buy a new pencil first.
[quote=babgvant]
This e.g. completely missed the point of when a cost incurred vs. when it is realized.
[/quote]
Actually, no it didn’t. I showed how the cost was incurred and realized at the exact same time. You perceived the cost as being a reduction in cash when it is actually a reduction in buying power.
[quote=babgvant]
If there are 10 hours of tasks, 2 of which are marginally created… Sure you’re employees can go home after 8 hours, but then 2 hours of work are deferred until later.
When I worked at McDonald’s, when I closed we had to stay until all the work was done; even if it took longer than expected.
[/quote]
And you’ve never had to get 10 hours worth of work done in 8 hours? I certainly have. Of course the reality is there isn’t actually 10 hours of work to be done. There’s 8 hours of work that normally takes 10 hours to do because of inefficiency.
As for the closing shift at McDonalds, that extra cost is the cost of opening for business the next day. Thus, the first unit produced the following day realizes all of that cost as a marginal cost.
[quote=babgvant]
How is that any different from what I did before (i.e. Average MC per Q)?
[/quote]
Because average MC per Q doesn’t determine whether or not a good is non-rivalrous. Actual MC per Q does. You can have 10,000 Q’s, but only one of them needs to have an MC of $0 in order for the good to be non-rivalrous. Again, I think this is part of the problem here. You are busy trying to average the costs or calculate for an entire group instead of looking at the real cost to make one additional unit. That is the very definition of marginal cost.
[quote]
I’m not sure that what is meant by short and long term when used in an economic context (or what was said previously on this subject for that matter) is captured in the statement above.
[/quote]
I am very well aware of the difference between short term and long term. As I said before, marginal cost is short term…it measures the cost of producing one unit. Not just one unit in general, but one particular unit. If you are in the business of making shirts, and you make 35 shirts, the marginal cost of shirt number 27 was how much it cost you to make shirt number 27. There is absolutely nothing long term about making shirt number 27. When you want to think long term, you start getting into how much it costs to make a batch of 35 shirts. Or you can even get into the average cost of making shirts. That could be short term (1 batch of 35 shirts) or long term (5000 batches of 35 shirts).
Why not just cut the cord.
Why not just cut the cord. They are going to screw you either way. Here is how I did it:
http://www.missingremote.com/node/10642
I don’t mind paying for bandwidth, I do mind paying for a $9 digital outlet fee for to use a “free” FCC mandated cablecard.
Because when I cut the cord I
Because when I cut the cord I lose a significant portion of the content that I like to watch. Not everything is available online. And to (legally) get what content is available online, I have to use a handful of different sources with different fees. The cost effectiveness of this approach diminishes as I seek content more and more content. Additionally, the content that is available from alternate sources generally lacks the picture and sound quality associated with the cable feed. I certainly don’t enjoy watching SD content in 2-channel audio on my 50″ 1080p plasma TV and 7.1 channel home theater system. I’d much rather have the HD video and Dolby Digital audio.
But for some people, cutting the cord may be a good idea…just not for me.
Just to add my 2 cents worth,
Just to add my 2 cents worth, I see a slightly different story arc here.
The MSO’s are complaining that people who do not subscribe to the services (transport over their network) are watching unencrypted content that is transported on their network (be it retransmitted OTA content or not). Thus they wish to encrypt that content to prevent theft.
Let’s step into the way back machine (well a few years back) before digital cable. If you terminated your service, the provider would need to send a technician out to disconnect your drop feed to prevent you from recieving unencrypted programing (cutting your cord). This did not eliminate theft from stringing coax between appartments since any cable ready TV or VCR could pull in the signal.
With digital cable and this new rule change, the MSO can now terminate your service simplely by de-authorizing your STB or cable card (which they make good money renting to you every month by the way), no need to spend $$ paying labor to disconnect your drop feed. And with the added bonus blocking the next door neighbor theft.
Reducing dispatches for what ever reason greatly reduces labor costs which is what every MSO, Telco, ISP has been driving for the past decade.
phoneguyinpgh
[quote=phoneguyinpgh]
Reducing dispatches for what ever reason greatly reduces labor costs which is what every MSO, Telco, ISP has been driving for the past decade.
[/quote]
And of course, they would pass those savings on to the consumer, since they want to keep our business since we can easily switch…oh wait
I’m thinking that this dialog
I’m thinking that this dialog should change to something safe like politics or religion
Happy Holidays all…
LowTech wrote:
I’m thinking
[quote=LowTech]
I’m thinking that this dialog should change to something safe like politics or religion
[/quote]
I was considering a new thread on one of the following:
Then I remembered this isn’t SlashDot and I really shouldn’t troll my own thread. 🙂
Andy, Your argument of
Andy,
Your argument of encrypting or not encrypting OTA broadcasts on a cable network “because they don’t own the broadcast” are baseless. Comcast, TW, VZW all pay a license to re-broadcast the content, while they too put up an antenna in your local area and are essentially “re-broadcasting” the local OTA they are still paying a license fee to do so.
Look at the nature of how cable tv systems came to be, they were installed in mountainous areas and all it did was re-broadcast OTA tv.
Early history
Cable television in the United States in its first twenty-four years was used almost exclusively to relay over-the-air commercial broadcasting television channels to remote and inaccessible areas. It also became popular in other areas which were not remote, but whose mountainous terrain caused poor reception over the air. Original television programmingcame in 1972 with government deregulation of the industry.
-Josh
Josh is right, cable
Josh is right, cable operators now pay local stations for rights to carry their signal and when talks break down we have many examples where signals have been dropped off cable systems.
It used to be anything other than OTA signals available in a market were open to encryption and copy protection marking at the whim of the cable operator. The FCC has now expanded that to OTA retransmissions and this came about because of illegal cable taps which operators documented to the FCC for this waiver.
It was the “theft of signal” that led to this ruling and thus this wonderful academic discussion is interesting but ….
You guys kept me entertained
You guys kept me entertained this afternoon while reading this when I stopped for a bite to eat after work. I like debating “technicalities” of rules. It used to drive my former boss crazy when I would discuss rules about work with her.
I can see both sides of the argument here. It got me to thinking; when something is easier to take I think people feel “less wrong” about taking it. If you go to a store you have cameras to worry about, store employees, security, embarrassment of getting caught, etc. If all you have to do is plug a cable in a wall outlet and into the TV then it feels acceptable. There’s no one there to know. I don’t know a lot about cable; I’ve never had it since they don’t run cable through where I live. But I can’t believe that it’s as easy as just plugging in a wire. I mean I’ve heard of people canceling thier cable and then after they come out and unplug the cable the people go back and plug it back up. I mean that’s just crazy for a system to work like that.
But here’s a thought for debate for you that I have pondered myself. What is your feelings on torrenting a TV show? First let’s say that it is from one of the channels that you can get OTA. You missed the episode and you download it the next day. Is this stealing? First the show was free to begin with had you watched it OTA, but is it now wrong because you’re getting it with the commercials cut out? What if the commercials were left in the download (which I wouldn’t care if they were)?
What if the show was from TNT? What if it were from a channel like HBO? Does the channel on which the show aired change the opinion of whether it’s OK to download the show? What if you’re actually a subscriber to a pay-TV service where you could’ve watched it any way? What if you pay for the movie channel like HBO? What are your opinions?
htpc_user wrote:
But here’s
[quote=htpc_user]
But here’s a thought for debate for you that I have pondered myself. What is your feelings on torrenting a TV show? First let’s say that it is from one of the channels that you can get OTA. You missed the episode and you download it the next day. Is this stealing? First the show was free to begin with had you watched it OTA, but is it now wrong because you’re getting it with the commercials cut out? What if the commercials were left in the download (which I wouldn’t care if they were)?
What if the show was from TNT? What if it were from a channel like HBO? Does the channel on which the show aired change the opinion of whether it’s OK to download the show? What if you’re actually a subscriber to a pay-TV service where you could’ve watched it any way? What if you pay for the movie channel like HBO? What are your opinions?
[/quote]
Going back to what Andy and I have been discussing, OTA content is considered non-rivalrous and non-excludable. The content itself cannot be stolen (though the delivery mechanism obviously can be stolen). In addition, in Sony v Universal, the US Supreme Court ruled that because OTA content is broadcast to the public for free, recording it is not a copyright infringement. Additionally, the FCC requires all OTA content, no matter how it is delivered, to be flagged as copy-freely, meaning anybody is free to copy it as much as they want. In order for an author to get their works broadcast OTA, they must agree to give up part of their copy rights..specifically, the right to authorize copies of the work. In other words, they must agree to allow everybody to make a copy their work. That is explicit authorization, and therefore, downloading OTA content from a torrent is not stealing.
Non-OTA content is different though, and it all depends on the copy protection on the signal. Anything marked copy-freely is fair game, just like the OTA content. As long as a paying subscriber copies the work, the data was obtained and copied legally. But when something is marked copy-once (or copy-never), it is certainly copyright infringement if you make an unauthorized copy of it (which includes downloading your own copy from a torrent). However, it is not theft. The “owner” of the data that gets downloaded is the person that made the initial copy. By uploading the data to the torrent, the “owner” must expect the data to be downloaded, and therefore is giving authorization for people to do so. The only possible theft here is the signal that originally delivered the data. This is likely why you never hear about anybody being sued for “movie theft”. It’s copyright infringement.
htpc_user wrote:I don’t know
[quote=htpc_user]
I don’t know a lot about cable; I’ve never had it since they don’t run cable through where I live. But I can’t believe that it’s as easy as just plugging in a wire. I mean I’ve heard of people canceling thier cable and then after they come out and unplug the cable the people go back and plug it back up. I mean that’s just crazy for a system to work like that.
[/quote]
It used to be really easy to “steal” cable, anymore all the good stuff is encrypted so you need a CableCARD or STB to get it.
[quote=htpc_user]
But here’s a thought for debate for you that I have pondered myself. What is your feelings on torrenting a TV show? First let’s say that it is from one of the channels that you can get OTA. You missed the episode and you download it the next day. Is this stealing? First the show was free to begin with had you watched it OTA, but is it now wrong because you’re getting it with the commercials cut out? What if the commercials were left in the download (which I wouldn’t care if they were)?
What if the show was from TNT? What if it were from a channel like HBO? Does the channel on which the show aired change the opinion of whether it’s OK to download the show? What if you’re actually a subscriber to a pay-TV service where you could’ve watched it any way? What if you pay for the movie channel like HBO? What are your opinions?
[/quote]
Personally, I’d rather buy the show off of VUDU (excellent quality, no hassle) than torrent it, but that solution doesn’t work in every scenario. Using only short term criteria, it’s not theft because you can’t steal a non-rivalrous good. On the other hand, in the long run it’s all about the numbers. If too many people consume the content w/o compensation the creator will exit the market as continuing becomes non-viable. This also may have negative externalities in other areas as well.
IMO, these sorts of things are mostly pricing/availability problems. Instead of thinking about it from a moral POV, it should be addressed using a market based approach. The music industry has, for the most part, adapted their strategy in-line with the nature of their good, making “theft” mostly a non-issue by providing access and using price discrimination to reach most consumer segments. Video on the other hand, is still caught in a different era. There will always be some consumers who free load via substandard goods, the problem with video is that often the substandard good is the authorized one.
Would the two of you just get
Would the two of you just get married already? 😉