Re: Stern's leap to satellite the year's biggest flop

On Sat, 30 Dec 2006 03:19:43 -0500, Rocinante wrote:

Sounds similar to fixed overhead costs for a manufacturing company. The
cost is distributed evenly per unit. As units increase in quantity, the
cost per unit will decrease. Basic accounting.

Since it doesn't cost any more to provide the basic service to each
additional subscriber (a satellite network broadcasts to one listener or a
million with no additional cost), if you look at the simple business model
(without marketing), they have close to *zero* variable cost, and should
have even more efficiency improvement with greater subs, much more so than
manufacturing, where variable costs decrease, but only with efficiencies
of scale. Costs of raw materials, labor, and transportation will never go
below some certain point.
.