In this way the cost of goods sold (COGS) in many categories is being transformed unto CAC by companies implementing a form of the freemium/land and expand strategy adopted by Credit Karma. The end result is great for consumers but a challenge for businesses that have counted on the revenue to generate profits, not just product promotion. The consumer surplus created as these strategies are implemented is massive but so is the producer surplus it eliminates. The impact of this freemium/land and expand phenomenon is highly underestimated since it is happening many categories. The fact that certain complementary goods exist that can lower factors like CAC and churn can create a really important dynamic when a company adopts something like a freemium/land and expand strategy. Profit in a business does not always arrive directly. is that the margin on this business is 60 percent or 70 percent.” The latter has expanded so much that it accounts for more than half of all profits for some airlines. “the sale of miles-mostly to the big banks, but also to companies that range from car rental firms to hotels to magazine peddlers. One really interesting fact about how the airline industry has changed and how its profitability prospects may have improved is the rising importance of selling airline miles. That is true but that is not relevant to the 2002-09 time period in the chart. For example, someone can argue that new developments, like the recent reduction the number of airlines has changed the situation now and profit for airlines may be more sustainable. The nature of a given profit pool can change over time or not. “the industry as a whole destroyed an average of $19 billion of shareholder capital per year through the 2002-09 business cycle” Mauboussin created this profit pool example which illustrates how some firms can be profitable and others not in the same value chain: One effective approach is to construct a profit pool for today, five years ago, and ten years ago and then compare the results over time.” The horizontal axis is the percentage of the industry, typically measured as invested capital or sales, and the vertical axis is a measure of economic profitability… Profit pools are particularly effective because they allow you to trace the increases or decreases in the components of the value-added pie. “A profit pool shows how an industry’s value creation is distributed at a particular point in time. The amount of sustainable profit generated by any business is driven by whether it has a moat and the definitive essay on moats was written by Michael Mauboussin.
What relative WTP determines is the structure of what is called an industry profit pool, which is the total amount of profit earned in an industry at all points along the industry’s value chain.
#Lil wayne free weezy album sells full
That’s the music industry’s highest gross since 2009 and, at an 11 percent improvement over 2015, its best gains percentage-wise since 1998.”Ģ.”The garden’s full of snakes so I had to escape.” From the song : CoCo. “The outbreak of streaming has officially helped the music industry rebound after nearly a decade of decline, with the Recording Industry Association of America reporting $7.7 billion in revenue in 2016. The good news is that industry revenue are rising: In this case, the artist (Weezy) is unhappy about by the nature of the revenue split between himself, Cash Money Records and the distributor. Simply put: WTP is the bargaining power of A that exclusively supplies a unique product X to B which may enable A to take the profits of B by increasing the wholesale price of X. The core of the issue is “wholesale transfer pricing” (WTP). That there was a feud between Lil Wayne and Birdman and another feud with the record label which has distributed Weezy’s music is well known. That’s that cash money vasectomy.” From the song : Grateful.