Cost doesn’t come down because a product gets better. Cost comes down over time as you simplify a process or as you streamline and edit it to be faster and cheaper. When it’s faster/cheaper/simpler to make a product you don’t spend as much on production and therefore can sell it more cheaply.
The other alternative is to make it cheaper by subsidizing the cost with something else like data collection or ads (this is what happened with televisions). This sort of loss leadership is already what’s happening with Generative AI. They started off offering it free to get people in the door, offered more features for a paid plan to hook companies, and now the costs keep going up and they want to add in ads on top of the data collection they were already doing.
Cost doesn’t come down because a product gets better. Cost comes down over time as you simplify a process or as you streamline and edit it to be faster and cheaper. When it’s faster/cheaper/simpler to make a product you don’t spend as much on production and therefore can sell it more cheaply.
The other alternative is to make it cheaper by subsidizing the cost with something else like data collection or ads (this is what happened with televisions). This sort of loss leadership is already what’s happening with Generative AI. They started off offering it free to get people in the door, offered more features for a paid plan to hook companies, and now the costs keep going up and they want to add in ads on top of the data collection they were already doing.