Time is Quality?

A thought came to me about the price of goods.

Presumably, you have at some point purchased a marginally expensive semipermanent product. For example, a car, or a cell phone, or a lamp, or a movie or something. Something you buy and plan on keeping.

Now, what happens when you see the product a few weeks later for half price? You think, "damn! I was cheated!"

The thing is, price reflects value. Always has, always will. If people are willing to pay $50 for a movie DVD, it must be a good movie! If they're only willing to pay $10, maybe not so much. This is usually pretty accurate, and most people think this way to some extent.

But in today's world of planned obsolescence, prices will always drop so long as a comparable product is being newly produced. Buying an old movie is cheaper than buying a new movie, even if the old movie is three times better. The fact that most such products - from cars to music - are price-fixed to a standard "release price" means that even crappy products have a high initial price. In this case, price does not reflect value.

What really reflects value is not price, but the price drop over time.

For example, "Bruce Gigolo" was originally sold for a price roughly the same as other release movies. Now you can easily find it for $5 - and it's been there for a while. It dropped like a rock, because the movie was worthless.

On the other hand, "Valkyrie Profile", a PS1 game, debuted at a comparable price to other games. Now, five years later, the price has doubled.

Sure enough, as expected, Valkyrie Profile is a top-notch game.

This is kind of obvious when you think about it. The market determines the real price of a product, regardless of your original price fixing, regardless of your planned obsolescence.

But it isn't the price that matters. It's not even the price relative to other goods of the same type: lots of companies get away with charging more for shitty products because of their position in the market and their billion-dollar advertising campaigns.

What matters is the price change over time.

(For free products, I would imagine it's churn: the less churn in percentage of total users, the higher quality the product.)