More music for download as Nokia opens online store

The Straits Times

April 29, 2008

Bold --> Comments

By Alfred Siew

CELLPHONE maker Nokia opened possibly the largest online music store here on Tuesday, serving up a catalogue that includes songs from both global acts like U2 and local singer Hady Mirza.

Hint of an oligopoly where the industry is dominated by a small number of sellers (oligopolists). Because there are few participants in this type of market, each oligopolist is aware of the actions of the others. The decisions of one firm influence, and are influenced by the decisions of other firms. Strategic planning by oligopolists always involves taking into account the likely responses of the other market participants.

The latest sign that the CD is on the way out, the store lets users download songs to their PC at home or to cellphones over the air.

Change in Taste and Preference: Fall in demand of CDs, rise in demand of MP3s

With a catalogue containing 'millions of songs', it will compete with existing stores from Soundbuzz and StarHub, for years the main sources for online music here.

Companies are probably making supernormal or normal profit, for the industry to attract cellphone giant Nokia.

Internal Economies of Scale: Risk Bearing – Diversification into provision of online music possible due to large size of Nokia

Nokia's songs sell for $2 each - comparable with offerings from Soundbuzz and StarHub - and albums go for about $16.

Highly positive elastic cross elasticity of demand between songs sold online by Nokia, Soundbuzz and Starhub.

Songs sold are almost identical and therefore close substitutes because they are produced by the same recording company, though they may differ slightly in quality (bitrate) and licensing mechanisms (Digital Rights Management to restrict copying of songs or playback on some devices)

Users can also use a streaming service that lets them play the entire collection online without downloading the tracks. This costs $16 a month.

Service differentiation by Nokia to decrease the substitutability of service. Users may prefer to subscribe to such a streaming service since most homes are connected by broadband anyway so it will give rise to significant cost savings as compared to per song / album download

Unique service which may give rise to monopoly power

Nokia Singapore general manager Grant McBeath said it opened a store here, despite the small market, because users are tech-savvy.

Expectations of demand to rise in the future due to population being tech-savvy and the increased awareness of intellectual property theft.

The Singapore store is the second to open in the region, after Australia.

Its aim is to replicate the success of Apple's iTunes store, which has sold four billion songs in five years. iTunes is available in more than 20 countries but not Singapore.

Perfect opportunity to enter Singapore market using Apple’s business model since Apple has yet to open iTunes locally.

The growth of such stores has been fuelled by digital downloads of songs, which users can transfer directly to an MP3 player or cut into a CD.

Reasons for growth of such stores

1. · Rise in demand of MP3s
2. · Rise in ownership of MP3 players
3. · Rise in number of homes with broadband connections
4. · Low cost of CD-R discs

In the United States, iTunes has started to outsell major CD retailers like WalMart from the first two months of this year.

Musicians, too, are turning to digital downloads, to stay in step with a new generation of fans bred on the instant gratification offered by the Internet and cellphones.

Madonna, whose first albums were out on cassettes and vinyl records in the 1980s, started selling songs on her latest album Hard Candy via cellphones before the CD hit stores this week.

Nokia's Mr McBeath said its songs will help sell more of its phones, many of which come with music functions like those on MP3 players.

Negative cross elasticity of demand between songs and Nokia music phones. Increase in price of songs will lead to decrease in demand of Nokia music phones.

By controlling the online songs industry as well, Nokia has a better chance at increasing total revenue from Nokia music phones since it can now decide the price of songs.

http://www.straitstimes.com/Latest%2BNews/Singapore/STIStory_232303.html

CHENCHI

Here's an article...not really related to economics, but quite interesting nevertheless:

Feet, dollars and inches
Apr 3rd 2008
From The Economist print edition
The intriguing relationship between height and income
http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=348918&story_id=10958949


“PALE and haggard faces, lank and bony figures...boys of stunted growth, and others whose long meagre legs would hardly bear their stooping bodies.” Charles Dickens's wrenching accounts of child labour helped to inspire a series of factory laws in 19th-century Britain. Indeed, by the 1870s factory owners claimed that it was they who were stooping under the burden of regulation. The new laws required a medical inspector to certify that a child was old enough and strong enough to work. Unhappy about the cost of these examinations, the manufacturers proposed a cheaper shortcut: a quick measure of a child's height to establish his age and stamina.

In 1876 Charles Roberts, an inspector, reported the statures of about 10,000 children, drawn from the registers of London military hospitals and his own tallies in Lancashire, Yorkshire and Cheshire. It was one of the first sophisticated statistical inquiries into the economics of height. Later scholars have explored the economic determinants of height (rich people are taller, on average), its economic consequences (tall people are richer, on average), and the clues it gives about a society's standard of living.

But Mr Roberts's results disappointed the Victorian bosses. Yes, taller children were older and stronger on average. But he found eight-year-olds as tall as 13-year-olds, and boys of ten who weighed twice as much as others the same age. This distribution was viewed by the 19th-century Belgian mathematician Adolphe Quetelet as God's “curve of error”, as if the tall and the short were deviations from a correctly proportioned “homme moyen”, or average man. The variation meant that you could not use the mean to infer anything about an individual: Mr Roberts could say that the average height of 11-year-old boys was 52½ inches, but not that this boy of 52½ inches was 11.

Nonetheless, manufacturers were right to suspect that taller people, on average, were more employable. Surprisingly, this remains true in the knowledge economy of today's America and not just the factory economy of Victorian Britain. The tallest quarter of the population earns 9-10% more than the shortest quarter, according to two recent studies. Nicola Persico and Andrew Postlewaite of the University of Pennsylvania and Dan Silverman of the University of Michigan think this is because height gives adolescents self-confidence and helps them learn valuable social skills. Anne Case and Christina Paxson of Princeton University, on the other hand, argue that people who grow to their full potential are smarter, on average. Both brains and build depend on the care and nourishment a child receives.

Height adds to income, income also adds to height. In countries languishing at a real income of $4,000 per head (in 1985 dollars), boys average less than 145cm. In places that are $6,000 a head richer, boys are 4cm taller, according to calculations by Richard Steckel of Ohio State University. Likewise, Angus Deaton of Princeton University reports that Indian men of 20 are about 1cm taller than 40-year olds, partly because the country was substantially richer when they were born. In India adults still look up to their parents. But only figuratively.

The relationship between dollars and inches is not, however, straightforward. Uganda, for example, is both poorer and taller than India, where almost half of children under five are stunted, according to United Nations figures. Americans born in the 1880s, as the country's industrial revolution gathered pace, were both richer and shorter than their forebears.

What explains these enigmas? Height rises with prosperity, but at a diminishing rate. It traces an arc, not a straight line, as income increases. Otherwise, Mr Steckel points out, Bill Gates would be a giant. Earning enough to buy plentiful calories and protein makes a big difference to stature. But once a person has enough money to free himself from thin gruel and hard labour, extra income has less to add. “Stature,” Mr Steckel writes, “is a good measure of deprivation but not of opulence.”

Tall men are created equal
This arc has an interesting implication: the stature of society may reflect equality as well as prosperity. Extra resources add more to poor people's growth than they add to rich people's. So if two societies, with the same income per head, were to line up next to each other, the more egalitarian society should be taller.

This may be one explanation among many for the shrinking America of the 19th century. Tax records show that wealth gaps widened in America as industrialisation took hold. From 1820 to 1900, the Gini coefficient (a standard measure of inequality) in Massachusetts rose by 24%, according to Mr Steckel. Even as average heights fell, the stature of senior students at Yale and Amherst rose from 171cm to 173cm.

In India the starkest divisions are sometimes within the household. Indian women tend to have less clout than their African counterparts. Their claim on a family's resources may be weak, even as the demands made on them are heavy. Many women are consequently underfed or overworked during pregnancy. Their offspring, especially their daughters, are also undernourished during infancy. India may be growing taller as it grows richer. But, Mr Deaton shows, the average height of Indian men is rising three times faster than that of Indian women.

Some Indians deny this enigma, writes Meera Shekar of the World Bank. If Indians fall short of standard heights, they say, those standards must be an alien imposition, based on foreign populations. But the genetic differences between populations count for much less than the genetic differences within them. The grandchildren of American immigrants, for example, reach similar statures, whatever their ancestry. James Tanner, a giant among growth scholars, puts it this way: the great variation in human height, he writes, is “not a curve of God's errors, but of everyone's possibilities.”

Well, we now know that we must stick to JPong. :D

It's not a very economics-like article, but I'll try to source for some that are both relevant and comprehensible. :D

Oil @ $114.00!!!

Oil @ $114.00, AT&T laying off 1.5 % of work force, Citibank 5.1 Billion in the red for the first qtr, and the market goes up over 200 points?! What is really going on here? Anyone care to comment?

Sample of Article Review

This is a sample of an article review that Miss How posted on SMB. Use this as a guideline when you are doing your article review for the econs blog.

Participate in Wanted! to Earn CASH, Participation Points, GNA$, etc

Dear all,

You are strongly encouraged to join the Wanted! Competition! We are extending the deadline till as long as the blog competition is on!

As long as I see some good stuff you have put up and stand a chance of $50 cash, I will alert you and ask you to participate.

Also, it's already mid of 3 terms in which you are graded for 5% participation points..... well, by posting article reviews on this blog will entitled you to gain some class participation points, and also to stand a chance to win best blog - $200 cash, etc. Why not?

You will be given more details on how to score higher for your participation points.

Mr Chris Ho

Bill Gates

i am not sure if this is really about econs but i will be the 1st good econs boy to add a post

its about billgates, its also in the class blog...so just read through, u can try to identify some economic terms if u wanna be a even more hardworking boy

1. Bill Gates earns US$250 every SECOND, that's about US$20 Million a DAY and US$7.8 Billion a YEAR!
2. If he drops a thousand dollar, he won't even bother to pick it up coz by the 4 seconds he picks it, he would've already earned it back.
3. The US national debt is about 5.62 trillion, if Bill Gates were to pay the debt by himself; he will finish it in less then 10 years.
4. He can donate US$15 to everyone on earth but still be left with US$5 Million for his pocket money.
5. Michael Jordan is the highest paid athlete in US. If he doesn't drink and eat, and keeps up his annual income i.e. US$30 Million, he'll have to wait for 277 years to become as rich as Bill Gates is now.
6. If Bill Gates was a country, he would be the 37th richest country on earth.
7. If you change all of Bill Gate's money to US$1 notes, you can make a road from earth to mo! on, 14 times back and forth. But you have to make that road non-stop for 1,400 years, and use a total of 713 BOEING 747 planes to transport all the money.
8. Bill Gates is 40 this year. If we assume that he will live for another 35 years, he has to spend US$6.78 Million per day to finish all his money before he can go to heaven. Last but not the least : If Microsoft Windows' users can claim US$1 for every time their computers hang because of Microsoft Windows, Bill Gates will be bankrupt in 3 years.

hooray for money

Ford + GM = Gord?

Indecent Proposal? What a Ford/GM Merger Could Mean

Would Americans Buy Cars From A Company Called 'Gord'?

By DAN ARNALL
Sept. 18, 2006 —

Times are so tough in the American auto industry that the country's two biggest nameplates have actually talked about a massive combination. Reports out of Detroit suggest that GM and Ford had discussions about the possibility of a merger or alliance.

"It's a joke, there's no real meat on that bone," said Kevin Tynan, senior auto analyst at Argus Research Company. "They need to get smaller, not bigger. They need to be more flexible, not continue in their old way of doing business."

But the tantilizing possibility of a mega merger has many industry experts rubbing their eyes in disbelief, wondering if these two icons could actually find a way to marry, and if they did, how that would change the auto industry landscape.

"Does it become General Ford? Gord? Ford Motors?" asked Karl Brauer, editor-in-chief of auto web site Edmunds.com. "That's actually one of the strengths of a merger -- they'd be combining two of the world's most recognized brands."

Combined, Ford and General Motors would be a force to be reckoned with.

Based on their most recent sales reports, a merged company would have accounted for more than 4.6 million cars and trucks sold in the United States so far this year. That's an astounding 41 percent of the U.S. auto market and almost three times the size of Toyota's slice of the auto pie.

That new sizable company would have leverage with suppliers that neither has enjoyed for decades. Experts say a combination could allow for better deals on everything from steel components to tires, air conditioners to ad time.

But in this case, size doesn't necessarily make for success in the car business.

Today the companies are too big, with expensive plants that are not running and thousands of union workers they have to pay even when they do not need them. Combine that with the financial burden of pensions and providing health care to workers and their families, and you see that size can, in fact, hurt a company.

"Even if a merger happened, they'd still face these costs," said Brauer. "Becoming a single company doesn't reduce their obligations to the UAW or their health care costs. Unless they made these issues a part of the alliance negotiations and included the unions in whatever deal they struck."

Asian competitors Toyota and Honda -- both of which have made big headway in grabbing market share from GM and Ford in recent years -- have a younger work force, which means lower pension obligations and less expensive health care costs. Those foreign competitors have used those lower financial burdens to make cars in the United States for less than their American competitors.

A merger would allow the combined company to negotiate simultaneously with its unions about cost reducing moves, but GM is already a few steps ahead of Ford in cutting these costs with aggressive hourly-worker buyouts and layoffs of salaried managers.

GM chief Rick Wagoner says that the company's restructuring plan, announced late last year, has already succeeded in cutting some $9 billion out of the struggling company's expenses. Ford's recent acceleration of its "Way Forward" plan is taking a line from GM's script, offering one-time payouts of up to $140,000 to workers willing to walk away from their jobs and drop corporate health insurance in their retirement years.

But success is not just about reducing costs. It is about making cars and trucks that people want to buy.

"You could easily end up with a stronger line-up of vehicles and nameplates," said Bauer. He says both GM and Ford have brands that they could jettison without having a negative effect on their bottom lines. Losing the car and truck nameplates that haven't found a place in the marketplace would make the overall car market stronger; a Darwinian thinning of the herd. A big auto merger like the one reportedly discussed by GM and Ford has happened before. The $38 billion combination of Chrysler with German auto giant Daimler-Benz in 1998 offers a precedent. It took years and a shift in top management to get the merger to work.

"The real challenge will be getting somebody that can actually manage it and make it stronger, instead of just creating an unwieldy monster," said Bauer. "It would take a hell of a management effort."

But the speculation about a merged GM/Ford is just that: speculation.

Most analysts are not confident that a GM/Ford marriage is in the offing, pointing out that there's no real financial benefit to either company that would justify the Herculean effort of pulling off a combination.

http://abcnews.go.com/Business/IndustryInfo/story?id=2459206