IIRC, they were making decent-enough profits with the Osborne 1 at the beginning. It was never intended to be a loss-leader.
It was only after the Osborne 2 was announced (way too early) that existing orders got cancelled, and inventory was sold at fire-sale prices in sheer desperation to generate any value from the well they'd accidentally poisoned.
(For those who don't know, the company imploded before the Osborne 2 was finished.)
The three of us have a decent amount of years in adjacent fields, still this is more like a "trust me bro comment". Anyway, we came to a subscription price of 120-150 USD/mo and we did this 6 months ago when the world wasn't yet the chaos it is right now. If those number had to be adjusted, a quick calculation would put it already close to the 200 USD/mo mark so there a decent margin after taxes.
That said, of we are anywhere close to be correct on this, I think that increase the price of the product by 10x will drastically reduce the number of users which will then drastically reduce the hardware required.
And even if we are off by the double, it would still be a 5x price increase would cause similar effect.
Speculation on my part is that it needs to be cheap because they need as much as human generated content as possible as they are running out of data and the models have plateau'ed. We don't see that thing of models getting 10x smarter anymore and maybe we see they are getting smaller or more specialised.
Ofc, disruptive research might come up, but my guess is that this price is both a incentive and a requirement for this business to not break apart.
Terr_•1h ago
Hold up, "equivalent" how? It can't be based on "cost" of generation, or else it would be a 1x factor, by definition. Perhaps "costs" in this case refer to the unprofitable gap between revenues and expenses?
> Table 2
Weird, so it looks like some person just arbitrarily decided that 1K GPT-4 text tokens "is equivalent to" 10s of Sora 2 video?
That doesn't seem very rigorous.
PaulHoule•1h ago
Now personally I am not entertained by motion-for-the-sake-of-motion Instagram reels, they actually make me queasy despite having a cast iron stomach and having taught myself to not get sick in VR. So if that's 10s of entertainment, leave me out. I don't care if Tom Cruise is whaling on Brad Pitt or the other way around for that matter, but boy do I want to see the body thetans burst ouf of Cruise's body when OTIII goes horribly wrong.
My reaction to the article was funny. I mean, I saw that 160x thing and thought it was bogus, and of course it is all AI generated and poorly formatted to boot but I did like the overall message. It does remind me of the early 2010s when a lot of sites with photo-based content (including mine) were going out of business because the revenue wasn't enough to pay the hosting costs and a few newcomers like Instagram were survivors and Google was obviously cleaning up with video on YouTube. From the viewpoint of business models for AI video I think there are two questions:
(i) how many times can you get people to watch the same video, i mean, no matter how expensive it is, if you get enough views/ad impressions/other revenue you are OK
(ii) how does it compete with some other way to generate the video?
The picture that the $20 subscription costs $65 to serve doesn't sound too crazy to me. I mean, there might be somebody who can get 3x the value out of a 10s Sora video than somebody else or they could get the cost down by a factor of 1/3.
trillic•1h ago
CrzyLngPwd•25m ago
Just burn money.