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matters is that someone other than the creator of the information will value having access to it.

Information Creation, Distribution, and Consumption


The single most important feature of information products is that the creation of the original information content is what economists call a pure public good: The cost of generating new information is independent of how many people eventually gain access to it. The information creation stage involves all the activities necessary to develop a new information product to the point that it can be distributed to others. For example, in written expression, the creation stage might include conducting necessary research; writing the various drafts of a book, story, or essay; and preparing the final manuscript for publication (whether as printed or electronic text). The costs of carrying out these activities do not depend on how many people will eventually read the product. In publishing, these costs are called "first-copy costs" and refer to all the costs incurred in preparing to print and distribute copies of the original expression.


Distribution costs are the costs of delivering the information product to consumers. Historically, this activity entails two main steps: reproducing the physical embodiment of the expression and then delivering it to the consumer. For some popular entertainment, such as music CDs, novels, and magazines, the duplication stage consists of manufacturing a large number of copies of the physical embodiment of the information for distribution by mail or retail stores. With the widespread use of digital networks, however, information products are increasingly being distributed (or otherwise made accessible) electronically. In the case of live theatrical performances or broadcasts, the product need only be produced once but is simultaneously delivered to everyone in the audience. For theatrical performances, the duplication and delivery costs consist of the rental cost of the theater facilities and the salaries of nonperforming theater personnel. For broadcasts, the duplication and delivery costs are the costs associated with distributing the program to television or radio stations around the country and then transmitting the program in each community to its audiences.

Distribution costs vary widely according to the nature of the medium. In many cases, such as printed material and audio and video recordings,

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