[opendtv] Re: Is 'Fair Use' in Peril?

  • From: johnwillkie@xxxxxxxxxx
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Thu, 2 Dec 2004 10:04:21 -0800 (PST)


> At 2:23 PM -0800 12/1/04, johnwillkie@xxxxxxxxxx wrote:
>>So, if you don't buy advertised products, TV is free?  TV is certainly
>>free for me, other than the time and hardware.
> I guess that you do not eat anything, drive a car, or buy any kind of
> consumer products like clothing or deodorant.

I drive a car, but I didn't buy it, and had virtually nothing to do with
the buying decision.  (It was bought last week based on it being a 2004
model -- and it's availability was not advertised.)

I do eat.  Most of my food purchases are in Mexico, of brands not
advertised in Mexico or the U.S.  Oops, take that back, I have been using
Barilla pasta for years, and just about a month ago, saw my first spot for
it -- in the U.S.   The woman down the block who I occaisonally buy
tostadas from at night does not advertise the availability of food at the
table setup outside her house, but I still buy it.  Most of the clothes I
buy are purchased off the rack at Dorrian's department store in Tijuana. 
(Khaki and sport shirts.)  I also buy Champion socks or argyle socks.  If
these items of clothing are advertised, it has escaped my notice.  I buy
the Champions due the their durability and quality, and the other
outerware on quality and price.

I'm not saying that I'm not influenced by advertising, nor am I saying
that I avoid advertised brands; I just concentrate on quality and price,
which are not necessarily closely aligned with what's advertised. 
Certainly one cannot judge quality and price in advertising.

>>Actually, as is so often the case, you've gotten it backwards.  If there
>>was no TV advertising (very few products are actually advertised on TV,
>>and most of them have very high price tags) people interested in
>> promoting
>>those tv-advertised products would use less efficient means for
>>advertising, resulting in higher ad costs per sale, hence higher costs
>> per
>>sale, hence higher sales prices.  Did someone sleep through an economics
>>class?  Ever hear of opportunity costs?
> The prevailing economic theory is wrong, or at least incomplete.
> Yes, there are benefits to mass production that are driven by
> stimulating consumer demand. Clearly many of the most popular brands
> in the world today were built, at least in part, via TV advertising.
> Where the theory falls apart, is AFTER the product/brand is
> established in the marketplace. At this point many companies believe
> that they must keep advertising to maintain the current demand
> levels. I guess you have never had a Coke or Pepsi either. Both of
> these brands carry a significant price premium BECAUSE of the high
> levels of advertising spending.

So, not only do you think that your crackpot economic theories are
superior to the wide variety of economic theories out there, but you
apparently DID sleep through econ classes, since what you describe in the
first sentence of the paragraph above is what happens in mature or
over-mature markets.

And, only an idiot thinks that sales of an addictive item like Coke or
Pepsi is driven by advertising.  I prefer Coke, while my mother and one of
my brothers only drinks Pepsi.  Somehow, we never come to blows over this.
 My brother did, years ago, prefer Pepsi commercials, but he says he
prefers the taste of Pepsi.

And, if you wanted to look into this, you would find that advertising, as
opposed to promotional expenses, is a small part of the cost of Coke or
Pepsi.  It was different in the 1970's, so you appear to be engaged in
legacy thinking.  I think you need to read Busines Week regularly; a
refresher course for the marketing-information-impaired.

> And then the
> re are all of those products that are obnoxiously
> expensive, because their price is inflated to cover the cost of
> endorsements and promotion that keep the sale price to consumers
> high. Why can Nike charge >$100 for a pair of shoes made in China
> that cost a few bucks, while converse is still selling affordable
> "Tennis Shoes?"

The only tennis shoes I have bought in the last 20 years have been
Converse Chuck Taylor All-Stars.  I've had them in dozens of colors, and
I've been wearing them since the 1960's.  Back when I clubbed regularly,
they were the only shoes I would dance in.  However, you missed the point:
 Converse went BANKRUPT twice in the intervening 20 years.  Their shoes
ceased being available in 1995, only in the last few months did they
re-enter the market, after a tortured chapter 11 proceeding.  I guess you
missed that.

I can't say that they could have avoided 2 BKs by advertising, but I can
say that many people have come up to me and asked "where can I get
Chucks."  Advertising would have prevented that from happening.  At one
point in the late 1980's in DC, there was only one place:  The Converse

> And now we see the Pharmecutical industry spending billions to drive
> up demand for drugs that are already VERY cheap to produce. Every
> once in awhile a company figures out that they can make more money
> selling a drug over-the-counter, rather than via prescription; then
> they spend millions more creating demand for the over-the-counter
> brand. Clearly this is a marketing/distribution strategy, not a
> benefit from TV advertising.
> Sorry John, but you are a little behind the curve on this subject.

In other words, I'm right on the money!  Thanks for the counter-endorsement.

John Willkie
> Regards
> Craig
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