Please explain the high cost of digital backs

Discussion in 'Medium Format' started by gary_conrad|1, May 26, 2010.

  1. I am aware it is not merely a chip that like in a DSLR. I dont however understand why a 20 megapixel digital back is 3 times the cost of a 5D Mark II. What components are there that make it this expensive?
     
  2. When it comes to sensors, even a modest increase in the size of the surface greatly increases the number of manufactured sensors that won't pass QA (bad pixels, etc). When a sensor gets twice the size, only a fraction of them are usable at the factory. Combine that with the fact that only a very, very small number of people will be buying and using such sensors, and you lose almost all of the economy of scale that the normal DSLR makers enjoy.
     
  3. Pretty much the same reason why a Hummer H1 costs about 2-3x as much as a Hummer H2 and a Hummer H3. :)
     
  4. Design and tooling costs that can't be spread over a million or more units.
     
  5. And two sensor suppliers (Kodak and DALSA) who are used to supplying parts to people with aerospace budgets. They actually believe that the stuff they're making is "low cost".
     
  6. In addition to answers above, according to the Hasselblad salesperson, he stated to me that it also has to do with the economy of scale. There is not much demand for the medium format digital back. Therefore the cost is a lot higher--as the sensor gets larger.
     
  7. Several people described exactly what I was going to add. The companies that made the digital backs had to spend a couple million dollars designing and developing the product. They knew in advance that only about two dozen people would buy them, so they priced them at $2M divided by 24 to break even! LOL
     
  8. david_henderson

    david_henderson www.photography001.com

    The following in combination
    • Low volume , which keeps component and manufacturing prices high and high development costs per unit
    • A pricing model that tends to work in % uplift terms rather than adding on a reasonably calculated cash margin. Who said that you don't bank percentages?
    • A realisation , probably essentially correct, that reducing the prices by a lot wouldn't increase the volume that much, so there's no incentive to take risks.
     
  9. Because people will pay it. The buyer behavior always sets the price.
     
  10. Bob,

    Except...people aren't paying it, which is why the market is more or less collapsing.

    Your premise works with oil, which has production costs with very little direct correlation to the price we pay. On the contrary, for MFDB gear, production cost DIRECTLY and SIGNIFICANTLY drives the sales price up.

    I'm sure they'd love to lower prices to increase volume. Except, as noted above, by the time they lowered the price enough to make a noticeable increase in demand, they'd be losing money. You can't lose money on every unit you sell, but make up for it in volume....except in the joke. ;)
    As in my engimatic Hummer analogy...you can use advanced technology, equipment, and manufacturing techniques to make something with the best possible performance. But you'll be paying for it, as they did for the military HMMMV.
    Even if you try to recoup your non-recurring cost by reducing production cost as much as possible and selling it to the masses, your design limits your ability to reduce costs, which in turn reduces demand. And so forth.
    By going to a mass-produced chassis, they were able to get something similar, at least superficially, at a much lower cost. Analogously, this is what you get with a FF DSLR
     
  11. The correct answer is low volume.
    Not that many folks buy LF or MF backs.
    **They are 16 to 17 years old already; a known tiny market.
    Since the volume is low all those tooling costs are spread across 1/1000 t0 1/10,000 the units as a dRebel. Thus the tooling costs and support cost per unit is 1000 to 10,000 time higher.
    Go buy 100 cans of soup at the local grocery store. Then go out an buy 1 can of soup from 100 differnet stores.
    Does a bee 10,000 years ago vist 12 flowers on one bush or 1 flower on 12 bushes?
    With the drop in manufacturing base and increased amount of government workers these questions are tougher than in past eras.
    Most folks who buy MF or LF digital backs are pros. Amateurs have whined now for 17 years why they are so expensive. They want 100 buck MF backs; 50 buck metal lathes; 5 buck real Rolexes.
    The folks who make MF and LF backs are private companies; they have to set the sales price to pay off the development costs
    Questions of this nature arise all the time on Photo.net and go back to the beginning.
    Folks want to know why a digital rangefinder like a Epson RD-1 costs more than a dRebel.
    Folks on the wedding board ask even if they should charge for shooting a wedding.
    Talking about why stuff costs X and why one should charge Y are somewhat a taboo subject on Photo.net; since most all photos are shot for fun; most all cameras are bought for non pro usage.

    Folks that have a trust fund or are government workers tend to get confused about why stuff costs more than folks who run an actual business.

    If you are a secure college prof with tenure; the subject is confusing.

    If you are a NYC hot dog vendor; there is a better connection to considering costs and ones income.

    ****Ask yourself is it easier to shoot portraits of 1 senior at 1000 different schools versus 1000 seniors at 1 school.

    If you get paid by the photo/hotdog; the answer is easier than if you get paid by the hour/mile or if your job is to create bloat and waste and there are no concerns with costs.
    Dropping a MF back that sells for 6k down to 5K does NOT increase the sales enough to make more profit; it drops it. If the sales price is set to 4k that might be their cost and then there is no profit.

    What folks want is welfare; a handout; ie slacker. Makers cannot sell stuff below cost for too long; they go out of business. There is no umbilical cord like a tenured college prof has. In private jobs screwups cause folks to be fired.
    this question is asked all the time
     
  12. An example ...Ubiquitous supplier Digikey -
    Pick a typical part, let's say it costs $1.21 each (min buy 10 pieces).
    The price becomes $ 0.198 each (when buying min of 4,000 pieces).
    It may vary based on the part, but it's fairly close to 6 : 1 . And this is for parts made in the millions.
    That's what's mostly been said so far above.
    Deep Geek : http://www.micromagazine.com/archive/03/06/maynard.html
     
  13. I fail to understand how the reference (which is a gross generalisation, assumption and probably incorrect ), that people who have trust accounts or are government workers, etc....,addresses the original poster's question regarding the high cost of Digital Backs.
    Please explain
     
  14. For starters, the sensors are bigger. Bigger chips are exponentially more difficult to manufacture. The silicon chips come in big wafers. From these wafers they cut out the sensors (to put it simplisticly). So, if you as a manufacturer buy a wafer and out of this wafer can cut 10 APS-C sensors for your Nikon D90, then from a same size wafer you can cut 5 "full frame" sesnors for a D3X or just 1 645-sized sensor for a 645 back. Just do the math, APS-C is 17x25mm, 35mm/full frame is 24x36mm and 645 is 60x45mm. You also have rejects. If the wafer is imperfect or damaged then you might still be able to salvage a few APS-C sensors out of the 10 you could have had. On the other hand, it's a complete waste for your MF back as you could only get 1 sensor out of it anyway.
    Finally, as already said, it is low volumes. Canon and Hasselblad have similar design, research and manufacturing costs (this is a generalisation but bear with me) yet Canon can split these costs over the millions of products sold, while Hasselblad only sells a few thousand. So that greatly impacts the retail price. Think of it like this: if you want to sell hot dogs you need to buy the sausage and bun. If these cost 50c then you need to sell hot dogs for at least 50c to cover the ingredients. You then need to buy or rent the trolley to sell these out of and rent the curb space from the city hall. If the rent for the trolley and curbside space is $50/day and you want to earn $50/day to live, then your daily cost of business is $100. Plus the ingredients for each unit sold. So you can:
    - EITHER sell just one hot dog per day at the price of $100.50 ($50 for the rent + $50 for you + 50c for the ingredients)
    - OR sell 100 hotdogs for the price of $1.50 each. Because 50c from the $1.50 goes for the ingredients of that particular hot dog and the remaining $1 goes towards the rent and living (100 hotdogs x $1 = $100 for that day).
    And not just that, but if you buy 100 hot dogs/day from the supplier you can probably knock down the ingredients price to 25c due to volume discounts, hence you can sell 100 hot dogs for $1.25. And if you go for the first option, it is debateable whether anyone will find the one person a day willing to buy your $100.50 hot dog. Which then means that if you can only sell 1 expensive hot dog every other day, to sustain the same living wage you need to be selling a $200.50 hot dog every two days to survive. And this way you can see how you can quickly price yourself completely out of the market, because if you can only find one person every other day to buy a $100.50 hot dog, how many are there to pay twice as much?
     
  15. Colin;

    RE "I fail to understand how the reference (which is a gross generalisation, assumption and probably incorrect ), that people who have trust accounts or are government workers, etc....,addresses the original poster's question regarding the high cost of Digital Backs.
    Please explain"
    It is becausee if one runs an actual private business; ones livelyhood *depends* on having common street sense; ie understanding costs. The hot dog vendor with no education can grasp this. The more buns he buys; the less they cost per bun. If He buys too many; they go bad; thus scrap rises. If he only buys 1/2 days worth; his costs are a lot more; plus he looses sales when he has to close to go buy more.
    If somebody has a giant trust fund; or on welfare; they might have money flowing in automatically; even if they do not work. There is a lesser connection to costs sometimes; one has daddy or the government as the big nipple for cash flow.
    As far as government; lets take an example. They pave a road; then several months later close it and dig it all up and add new water lines. They they repave it. Then then decide to resurvey it. They then pay to design new sewers; then they tear up the road again and close it and add sewer lines; then repave it. They government does this type of super wastefull crap because of a few dumb clucks doing the planning. They have buddies in the paving business; ie kickbacks to do for getting them elected.
    The govenment often does things is a super wastefull way; they often do not have the business savy of a NYC hotdog vendor. Thus millions are pissed away in wastefull things; pet porkbarrel crap. The folks I deal with in government are often the cogs in the mechanism and seem many times just drones. Folks in purchasing often there often are harder to deal with as far as understanding basic stuff.
    If some customer item the government wants has price breaks at 1 unit, 4 units, 20 units, 80 units and 160 units because of packaging; the dumb government often wants 21 units; or 81 units when it is just stuff they use over the year. Thus I have to buy 81 and they pay more per unit than 80; since they are mentally not as wise as a NYC hotdog vendor. This happens all the time; thus your tax dollar are pissed away with this jackassery.
    The NYC hot dog vendor would not buy a 80 bun package and a single 1 bun package; he would buy 80, or 160 ie what ever saves money. People end to piss away money that is not theirs. In one 24x36" vellum custom form the government has me print; it is all settup cost for the first 100 sheets; 200 sheets does not double the price; nor does 3 triple it. About every 2 to 5 years I print these. I quote on 100, 200 and 300 etc sheets with a sliding scale.
    In *every* case for the last 20 years after 100 sheets they want the extra 100 sheets a week later; after the job is done and it is off the press; thus they pay me to reset it up. It is like going to the grocery store to buy 1 quarts of milk with 3 trips.
    They are not capable of figuring what they need; thus it is all settup costs. If I think they might need 200 sheets; it might in the old days print some extra; they sell it the next week; or 3 years later. If they change the form; I am screwed.
    Thus today I often run 3 of the same 100 sheet jobs in on month; and the 300 total sheets costs the government about twice to 2.5 times waht it would be with one 300 sheet order.
    The the quoted price is 200 for 100 units; and 250 for 200 units; and 300 for 300 units with ONE press run; they will always want top get an 100 sheets a week later for 50 dollars. But then I have to reset the press and run another 100 for 200 bucks. I have probably spent 1/2 man week on explaining y=mx+b to the purchasing agents over the last 20 years. Their brains cannot handle this; what a NYC hotdog vendor could grasp in seconds. If the hotdog vendoer delivers; it is probbaly cheaper to deliver 10 hotdogs to one place then 1 to 10 different buildings.
    A core tenet with the government is waste; or a government worker said to me "tear it up it is paid for; we will just buy another". Thus folks in the government cocoon often if just a drone are not impacted by waste; their livelyhoods are not impacted as much as a private business; ie no mass layoffs due to this jackassery of waste. The NYC hot dog vendor cannot be this wastefull; he will starve.
    When one sees and deals with the government and how they buy stuff' this comment comes off as comical:

    "I fail to understand how the reference (which is a gross generalisation, assumption and probably incorrect ),"
    since there is so much waste one deals with in the Goverments ways.It really is sad that more folks are not upset about tax dollars wasted; or how baffoons in goverment are defended. If ones life has one buying stuff with no concerns about prices; there is no way a government worker will understand why digtial backs cost more; if they cannot understand settup costs. ie y=mx+ b.
     
  16. Gregory - you are right, I was talking about price, not cost. Most of us who have run our own business learned early on that price and cost are only marginally related. Value pricing has been used successfully for years and years, and the buyer determines the value based on what he or she is willing to pay for the product or service. Cost is another matter entirely, and the cost-based discussions above were well stated.
     
  17. If you are a secure college prof with tenure; the subject is confusing.​
    Well I am one; and I don't find it remotely confusing. I think that picking on that particular profession is really adopting a particulary bad example to support your argument. Because in my business, I have to work my butt off to win paltry research budgets; and if I'm lucky enough to secure one, the funding agency will first lop off an arbitary 15% [even though my costings could not have been leaner and there was zero fat in my proposal]; and then I have to make it stretch a very long way, over typically 3 years. Out of this, I have to recruit a postgrad student; make sure the budget stretches to pay them for 3 years; make sure that I can pay for their travel to observatories, their IT gear, right down to their basic stationery. Do I know how to secure the best value for money on all these things? Hell yes! I have to be an advertising agent; a HR manager; an accountant; a travel agent; an IT purchaser; and oh yeah, a scientist.
    Furthermore, the waste I've seen in the public sector is NOTHING compared to the waste and excess I've seen in the private sector. I'm the guy taking buses, trains and multiple cheapo flights on point to point budget airlines, spending 28 hours in airports and airborne, to get to my conference; while the private business "suits" are flying 1 leg, business class, taking the premier service airline to get there in 5 hours. These guys know nothing about cost efficiencies.
    If somebody has a giant trust fund; or on welfare; they might have money flowing in automatically; even if they do not work. There is a lesser connection to costs sometimes; one has daddy or the government as the big nipple for cash flow.​
    Do you really think that life for someone on welfare is remotely like life for someone on daddy's trust fund? Who do you think buys those 20 cent loaves of plastic bread? Does the elderly widow in the freezing old house really regard the small government pension that keeps her alive as "the big nipple for cash flow"? C'mon, Kelly. Take the neo-con ideology blinkers off. I love your posts on photography but this stuff...I can't agree with at all.
     
  18. Another point not mentioned, is the demand curve. How do people's willingness to buy change with price?
    If 10,000 people are willing to pay $20,000 and 9,000 people are willing to pay $30,000, then they will likely charge $30,000.
    This is very evident in other new gadgets such as the iPhone. When it was released, it was $600. They get all the Apple drones to pay $600. Then it got lowered to $400 and the people only willing to pay $400 bought one. Now it's $97 at Walmart. If they immediately priced it at $97, Apple would loose all the profits from those willing to pay $400 and $600. Another consideration is production capability. It would be best for Apple to have a moderate steady production.
    If Apple set the price at $97 immediately, there would a huge demand, which would result in shortages or a huge production capability (with lots of workers), which then runs empty before you have a new product to launch.
    Digital backs may come down in price eventually as manufacturing processes get improved, better efficiency in quality silicone, and everyone willing to pay the big bucks already has one.
     
  19. Digital backs may come down in price eventually as manufacturing processes get
    improved, better efficiency in quality silicone, and everyone willing to pay
    the big bucks already has one.​
    This may apply in Econ 101, but completely discounts the realities of the MFDB market.
    1. Manufacturing processes are designed for smaller chips for computers. APS chips are built on the same equipment. FF and MF chips are not, and require special handling. There's almost no chance there will be any significant improvements in making these chips because there's no reason to invest in it. It's a Catch-22.
    2. The silicon isn't the problem.
    3. There is no waiting pool of buyers for MFDB like there is for an I-phone. These backs can ONLY be used by people who already have a MF camera, or are willing to pony up hundreds (if not thousands) of $$$ to buy in. I guesstimate for every 10,000 I-phone users, you may find ONE person looking for a MFDB, at any price. And that's being generous.
    An apropos analogy may be a thing called a Digisette. It was an MP3 player embedded in a cassette tape shell. You could play MP3's in your cassette player. Except, by the time the technology made it possible and cost-effective, the market was already gone. The chronology didn't line up. Anyone who wanted to play MP3's already had a compatible player.
    Similarly, many in the MFDB market have already bailed for FF, and by the time any of your proposed technological advances could make cheap MFDB possible, the FF market will be that much more advanced as well.
     
  20. RE
    "Digital backs may come down in price eventually as manufacturing processes get
    improved, better efficiency in quality silicone, and everyone willing to pay

    the big bucks already has one."
    ****The said thing is this dogma has been mentioned every year for the last 16 to 17 years.****
    Folks whined about MF backs prices for the Blad when they were 32mm square and 4 megapixels and cost as much small pickup and the Dow Jones was 3800.
    RE: (3). There is no waiting pool of buyers for MFDB like there is for an I-phone.
    There are a *mess of folks* on Photo.net who would buy a 100 to 400 buck MD digital back; or 100 dollar metal lathes; or folks who want 100 dollar weddings shot; or 5 dollar telephone bills; or 100 buck Noctiluxes; or 50 dollar Leica M3's; or 200 dollar riding mowers
    There *IS* a waitng pool for theses thing at these absurd low prices.
    It is you basic human quality wanting a quality item at below the cost to make them.
    The cave man probably wanted a good spear for a lump of dirt too.

    " XYZ may come down in price eventually as manufacturing processes get
    improved, better efficiency in quality ABC, and everyone willing to pay

    the big bucks already has one."
    XYZ can be new cars; health care; college textbooks; Noctiluxes; digital MF/LF backs too!
     
  21. The hot dog vendor knows why steak costs more than hotdogs.
    one has 17 years of folks "wanting" MF and LF backs to drop in price via magic.
    For those who like to ignore costs; you are still are going to be confused 17 years from now.
    Just because here is a demand for 200 buck MF backs or 200 buck riding mowers does not mean a fool will sell them to you at a loss.
    The constant whine on photo.net is why I cannot buy low cost MF/LF digital backs; why doesnt Kodak still make Kodachrome; why is verichrome gone. Why are there no low cost digital rangefinders. Most folks who learn street business sense learn it on the street and not in school.
    A private business has to risk money to make that 200 buck MF back or 200 buck riding mower that you want. Unless there is a kickback to al elected doofus; there is no bailout to support jackass poor projects. If the investment looks poor the private business is not going to make a 200 buck MF back or 200 riding mower.
    Ray It has been my experience the government workers are less concerned about costs and are often a wastefull lot; or their bosses are and they are just a cog. Ie a private business owner making a payroll; paying taxes; buying inventory has a greater feel for prices than a liberal college prof who thinks profits are evil. One person is supported by his own actions; the other through taxes.
     
  22. Kelly, I have worked in government and for "big business." As a consultant I've bid on projects for both. My experience is not at all consistent with your claims. Government has always been much more frugal.
     
  23. Dan; I think it depends on who one deals with in the government. Some of the ones I have had to deal with or known about have wasted some money and were not that frugal; or even had any cares if the product works
    Example: (1)
    (a)One product I once sold was sold by a Great brand and poor brand. A local school orders 34 of the poorer brand; I installed 34 of them and it was a rats nest of issues. The poorer brand was a clone of the great brand; and they screwed up the copy. I had to remove the lessor brand an eat all profit and install the great brand to fix the issue. This involved 2.5 days for the first sale and 2 days to swap out the bad stuff. About 1 man week of lost labor. Lesson learned is this slightly lower cost brand was a PITA for this one item; because it was a poor clone. Looking back I would have been better off sell the brand at cost or below cost and been ahead; WAY ahead. Stuff like this happens; the copy can be not really a value.
    (b) Another school and even a military base wants be to quote them on the ill/known/poor brand of the *same exact item* that has a design flaw that was a loss and embarrassment. I mention the known issue and quote the the radically better item at the poorer items price. *BOTH* government purchasing folks want the bad item. I asked the military guy what if it was can of oil for a military jet; and it had known issues like it ruined engines since the batch was full of acid. His reply; he has a part to buy; he doesnt give a &$#* damn; he just needs the stuff.
    Thus the mindless government worker really doesnt not care if the quart or gallon of oil is pure acid; he just has a item to buy. The idiot cannot connect me to the end user. Thus *BOTH* school and miltary places bought the poor items elsewhere and came screaming to me ( the closest dealer) to fix it. The fix was buying the better part and throwing other stuff in the trash; thus the school and base both pissed away money . Both got billed for labor to swap out the old and the new item. In a real business there is a more of a concern for pissing away hard earned cash. In a business a purchasing agent often is less of a mindless cog buying item #27.
    Example: (2)
    A while back a school has me Quote on an enlarger/lens/negative carriers that the three items will not work together. Lens wrong ; carriers do not fit this enlarger, You fire back a quick polite detailed fact filled letter to confirm the item numbers; mention too that theses three item do not go together. The government purchasing agent says just quote on all three; it is not my issue or his. So you did your Boy Scouts duty all you can and still you cannot get ahold of the end user; there is a drone purchasing agent in the loop crushing the attempts. Thus you quote on 2,5, 10 combos of the 3 items and they order 5 sets. When delivered you get a mad end user; whom was never contacted by the government purchasing agent. Thus you lend them a couple of old enlarging lens and used holders until another school year can pass for more money. Thus they scrap out 5 new lenses to the state school auctions and buy only 2 new lenses and 2 holders a year later.
    Example (3) Optical Unit come in from Spain; you check it out and cannot find anything wrong. Even after 6 years you have the unit from the miltary; with no contact still from the end user or way to get ahold of them.
    Example (4) You quote a job to shoot a mess of frail plats at a court house with 4x5 film; it is right after 9/11. All the prep work goes south after the government guards ruined all the sheet films. This happens on several shoots. The entire job costs 3 to 5 times more than a normal shoot due to the governments instance of checking the unexposed and exposed sheets for security. Thus all the meetings and warning get ignored.
    Example (5) Local government fire dept maps laminated; none of the maps are to scale. You spend give them the max size for each size of laminator. They give you several out of scale hundred maps all slightly larger than each roll size. Thus they pay for the next tier of prices; for no reason. The cost to laminate only is more that us printing and laminating since their prints are a mess of wrinkled and curled stuff on thin poor paper.
    Example (6) Local government brings in gear that is suppose to not work or is not calibrated but works just fine. They bring it in a week before major holidays'. Purchase agent wants it fixed; but it works fine. You ask him to have end user contact us; it never happens. They pick the unit up a month later; it was done in 2 days.
    Next time it comes in one week before a major holiday; the same unit doesnt not even turn on. You open it up and there is 1 wire cut (de milled). It is done 3 days later; they pick it up 1 month later.
    Next time it comes in one week before a major holiday; the same unit doesnt not even turn on. You open it up and there is several wires cut (de milled) and chips smashed; caps removed it is a mess. It looks like this time battery acid was used. Since the heart was ruined; it gets scrapped out and sent to the state auctions.
    Once it is now fall and cooler you get their new unit to align; a 7000 buck rig and they pick it up in a few days. By destroying the working 6000 buck older unit; they get the newer unit, It is not their money; it is the tax payers so who cares.
    They want be to install option #12 to recharge the internal battery with a cord; instead of removing it each time. This option was 55 bucks extra when bought new; but since a retrofit one tear the unit apart to install a board and a connector; this costs me 240 just for the PCB; it takes me 1.5 hours; you charge them 360 bucks. We had this option our quote; they bought it elsewhere; got it cheaper; but it had no option #12. Thus they end up paying more for the unit than my original quote; and got less accessories. Again; more common cases of government waste.
    Example (7) Local sherifs office is burning many cars each year. A local shop I know is always fixing them. The cops add gobs of extra lights and sirens; with no relays no fuses no fusable links. When a car burns up they get another. Another friend quits the government repair pool over seeing too much stuff purposely ruined to get new toys.
    Example (8) Local LEO get a program were a portion of drug grabbed goes toward their own retirement fund. A bad area of town has folks call in tips; where stuff is happening and there is no police. They will not show up; they want their pot to be giant. Totally pissed off mothers get tired of the LEO not responding. The mothers make 8.5x11 signs saying who is involved with the drugs; ALL names and print many reams worth of copies; several thousands of flyers. They cluster bomb the area with flyers one night; and the next day all the scum is long gone. The news calls it interferring; yea interferring with that big reward.
    Example (9) Local government oursources a huge scan job with any bids or prices; it is to government guys buddy; his brother in another state. Each scan they did was charged 10 times what I charge; but theirs today are mostly unreadable. They even used oddball formats; no tiff; no pcx; their own proprietry crap, Their viewer was a POS and they leased it. Several folks go to jail; but the chaps house are protected; in a state shields houses. They paid themselves as mostly retirement; it is shielded. The mess of missing plats and lost money still lingers; all due to a less frugal government purchasing agent that used his relatives; had no bidding; royal mess.
     
  24. ...plus Canon has to have money from all sales to promote the football game images seen on the TV advertisements! Those Rebel snaps convince all the Moms and Dads that anything is possible from the stands (sitting up 15 rows) and they continue to try to get action shots of Junior at the local high school night game.
    Marketing is not cheap....
     
  25. Furthermore, the waste I've seen in the public sector is NOTHING compared to the waste and excess I've seen in the private sector. I'm the guy taking buses, trains and multiple cheapo flights on point to point budget airlines, spending 28 hours in airports and airborne, to get to my conference; while the private business "suits" are flying 1 leg, business class, taking the premier service airline to get there in 5 hours. These guys know nothing about cost efficiencies.​
    As you should, since your salary is funded by taxes, no? 28 hours vs 5, to me that seems wasteful, or your time isnt worth much.
     
  26. I think the % increase at each step in the chain of distribution and sales is one big reason. The manufacturing cost of the sensor is miniscule compared to the cost of the camera at store - no reason to blame that.
    Now, why are the percentages taken in each step by people who don't actually do anything real so high? It's because the clientele allows it - those who buy MF backs buy them irrespective of price, and the rest of us don't, even if a 40MP back were $5000 - because the convenience of operation of these cameras is not good, the high ISO image quality is not competitive, lenses are big and expensive, and there are few zooms available. The exquisite detail and deep tones at base ISO are not so important to most people as convenience of operation, as long as the quality from the smaller formats looks good in print, better than people are used to.
    With 35mm film, the grain was obvious at larger print sizes than A5, so there was a significant reason why a lot of people wanted medium format - it was needed. Today you can get clean prints with good tonality from smaller size sensors than what used to be the case with color film. So FX is closer to what MF used to be in terms of user and applications base, and DX what 35mm used to be, though this is a bit of a simplification since 35mm/FX still have most comprehensive dedicated lens base (excluding slow zooms). For me, I'm staying with FX simply because of the lens line and versatility. I have applications where I could use MF digital, but I don't want to invest in a new lens system that I could use for 5-10% of what I do even after significant investment. There is so much improvement potential even with FX that I don't foresee myself being interested in going to a larger format.
     
  27. As learned as posters may be about photography on this site, there is a whole lot of questionable economics posted here. In a competitive market--and it doesn't necessarily take more than two participants (or potential participants) to be competitive--cost will largely drive price. There are numerous posts that say the price of medium format digital backs is high because of fixed costs (research, etc.) spread over low volume. But these posts are starting analysis in the wrong place. The question is: why is there low volume? After all, if the manufacturers anticipated that by lowering the price they would see a large increase in sales, they would lower the price and then have a higher volume over which to spread the fixed costs. (Imagine the sales increase if a Hasselblad H4D back sold for the price of a Nikon D700. Would inconvenience of MF use keep sales down anyway? If so, then what I say here is wrong, but I doubt it, personally. )
    So why are digital backs so expensive? Collusion between the manufacturers is a possibility, though I doubt this. (Phase One and Hasselblad seem to be at one another's throats and there are other sellers in the market.) The more likely explanation, I think, is the one given by the posters who gave what seem to me to be knowledgeable answers about the manufacturing process: the failure rate of producing large sensors makes them expensive to produce on a per-unit basis and this puts a floor under the per-unit price, which in turn yields a potential demand too small over which to spread significant fixed costs. As is typically the case in economic analysis truth here likely rests in the basic technology of production rather than in any abstract theory.
     
  28. As you should, since your salary is funded by taxes, no?​
    Absolutely, I agree: so I should, and so I do; and so they should; but sadly, so they don't.
    Because who pays their salaries and expenses? The people who buy their goods and services. People: consumers, citizens, taxpayers; call them what you will. What's the difference?
    28 hours vs 5, to me that seems wasteful, or your time isnt worth much.​
    Multitasking, my dear boy. In that time I work on my laptop, read research papers, analyse data...
     
  29. I'm new here and I have to say I am still confused. The original question, the way I understand it, is:
    Why is a 20mb digital back for a medium format camera way more expensive then a 20mb (or similar) digital slr camera?
    The relevant responses, after sorting through all the BS about hot dog vendors, professors, people on daddy's trust fund, people on welfare, people on social security, government workers, on and on ad nauseum, are as follows:
    1. High rejection rate for large digital sensor chips increases cost per chip. Rejections are caused by dead or malfunctioning pixels. (Why wouldn't this same argument apply to the 20mb dslr?? Same number of pixels, same chances for dead or malfunctioning pixels. This one doesn't seem to explain the cost difference.)
    2. Reduced market for medium format digital backs. (This one does make sense on the surface. If you can't spread your costs out over a bigger market then you have to charge more. But, why not use similar chips in both medium format digital backs and in the dslr you are selling? This opens up the market allowing you to reduce cost for each chip. Obviously this tactic won't work for some medium format companies because they lose the catchet of having a special product...that they in turn can charge more the consumer higher prices to buy... But this tactic appears to be self defeating and reduces the potential market rather then growing it, as most companies try to do. So, again, this reason doesn't really hold water.)
    The reasons identified above, as well as others I may have missed, are just excuses really. It would seem to me that the real reason has to do with market differentiation. Nikon, Canon, all the camera companies are great at this. I sell one product for a low price, but performance is low as well. If the customer wants more performance, they have to buy the next product up the line, which costs more. This holds true all the way through the product line until you get to full-frame and medium format. The full frame and medium format cameras are at the top of the heap performance-wise, and they usually incorporate cutting edge technology, so these cameras cost a lot more. Pentax is doing this exact thing right now with their new 645D. Instead of building a full frame 35mm equivalent, where the market is starting to get a little crowded, they moved directly into digital medium format. But that medium format Pentax 645D is still more expensive then the rest of the Pentax cameras available because it is the top of the heap. (But, interestingly, it is less expensive then a lot of digital medium format backs. So maybe there is hope that the price of medium format digital backs will start to come down.)
    Don't misunderstand me, I don't see anything wrong with this. All manufacturers do it. Car manufacturers use product differentiation in the same method. Although it may seem unfair or unreasonable, the truth is that everyone benefits, even us poor camera buyers. The upper product category has to get better, so the old technology, that was once cutting edge, is pushed down into the lower product categories, and the company's less expensive offerings become better then they were last year, or the year before. This doesn't necessarily mean that I can buy a medium format digital back for any less this year then I could last year. This is still near the top of the chain. I can't buy a new Porche for any less this year then last (in comparison to other makes), and I wouldn't expect to. Why would I expect to buy a medium format digital back for less this year?
    But there is still a real benefit for me and you. We can buy a better entry or mid-level dslr this year then we could last year, or the year before. Why? Because the technology that was in the "Porsche" digital back a few years ago is now being used in my new dslr. Or, if we're willing, we can buy used. We can buy a used Porsche for far less then we can buy a new one (as long as we stay away from the classics.) Likewise, we can buy a used full frame digital camera or medium format digital back for less then we can buy a new one. I currently own and love a beautiful used Canon EOS-1 Ds full frame that I could never have afforded when it was new. But, since that route is not for everyone, you can still be assured that our new, mid-level, APS-C sized, Rebel dslr probably takes just as nice a picture as that used Canon full frame did when it was new, as long as we do our part.
    So..in my humble opinion...the reason that medium format digital backs are far more expensive then the equivalent dslr has more to do with product differentiation then it has to do with anything else. And they will always be more expensive, until something brand new radically shakes up the photography world and changes our perceptions. Right now there are many people in this world that will happily pay the going price for the newest medium format digital back. Some of them are probably professionals who really are trying to use the best possible tool for their work, and can write the cost off as a tax deduction. But I would be willing to bet, if I could see the camera company's sales records, most of the people buying that equipment are rich amateurs who can afford to have the best possible performing camera, just like they can afford to own the best performing automobile.
     
  30. Lobalobo and the group:
    *** The MF and LF digital backs are an extremely old products; about really older than Photonet.
    They were around when TOP CPU was a pentium and Pentiums were the 3000 to 4000 dollar computer and most still used 386's and some used 486's.
    This the whine goes back to the Photoshop 2.5 days; when Photoshop just came out for the PC.
    *** This WHINE goes back to:

    when Bill Clinton was first in office;
    WTC Bombing;
    Waco;
    Janet Reno;
    Window NT's birth;
    Windows 3.11 birth;
    Thus ponder why in the hell have they these MF and LF backs always been expensive; and amateurs still ponder why?
    17 years of amateur wanting something for nothing; the handout; the welfare.
    (1)The reason there is low volume it that required sale price versus units is
    why up in the many many thousands; and the other curve of what slackers want is in the hundreds to 12 grand range.
    The *want* versus *required* are an order of magnitude apart in pricing.
    Since few folks here like to consider real life tooling costs; why they cost so much is always confusing.
    Makers are not stupid; they are not going to make 100,000 units that cost 3000 bucks to make when slackers want then for 1000 bucks.
    Business and pricing is understood by a NYC hotdog vendor who is illiterate; but is beyond understanding of most folks who want 1000 buck MF and LF backs.
    The whine of MF and LF backs belong expensive is a 17 year old whine.
    Unless one considers costs; you will be confused why stuff "costs so much".

    Ask yourself why you do not sell you goods at less than cost; if you want others to do the welfare gig.
    Prices are confusing to amateurs; you shoot photos for fun; fix toilets for fun; dig ditches for fun,
     
  31. Yeah, the politics was getting a little heady. ;-)
    1. Defects are proportional to surface area, not just # of pixels. This is due to both the material itself and the number of passes it takes to build the chip. APS chips can be done with a single mask, but the larger ones need to be aligned and remasked. A few nanometers off and...poof.
    2. How could you use a DSLR chip in a MFDB?? It would be too small.
    I think your thoughts on product differentiation could be valid, but in my opinion, they don't directly apply. A MFDB is not a status symbol. Leica...sure. Hasselblad...okay. But not MFDB.
    These guys would prefer to move more product to make more money. I don't see them sitting back and saying "We sell enough...no need to lower our profit margins to increase sales". (Like Cadillac did...tarnishing their image).
    I'm sure they'd have realized their ranks were vanishing quickly from FF competition and competed on price if they could have. But I don't have access to their financial records, so it's just a guess.
     
  32. Dan;
    Re: "The relevant responses, after sorting through all the BS about hot dog vendors, professors, people on daddy's trust fund, people on welfare, people on social security, government workers, on and on ad nauseum, are as follows:"
    ***Look at Photo.net:

    Folks on photo.net are ***always confused*** about

    (1) "why stuff costs so much" and
    (2) "what do I charge XYZ photo" or
    (3) " Do I even charge for shooting a wedding, portrait, or party"

    Photo.net is dominated by amateurs; they shoot images for fun. Many are artsy types that believe a profit is evil. Those who sell their stuff often do not even make enough to break even. Only a tiny fraction of folks on photo.net support themselves via photography.
    Few folks on photo.net are engineers who have worked in high volume consumer products.
    Thus pricing of photos and MF/LF digital backs is not a strong suite with the bulk of folks on photo.net.
    Most all have no clients; most all never signed off high volume consumer production items.
    Thus one has 17 years worth of whining that MF and LF backs cost alot.
    Most Folks have zero experience in making consumer items; and want the common "something for nothing" welware of items sold below cost.
    Ponder that a NYC hotdog vendor or plumber charges for their work; but folks on photo.net ask if they should charge to shoot a wedding.
    One finds more starving artists than plumbers ; and both often work in manure.
    ****The real BS is the lack of folks wanting to consider costs; the darn CORE tenet of running any business.
    ****What is really BS here is the slacker lack of understanding of costs; that is why folks are confused; lack of street sense.
    One can go back 5000 years ago and oddball items cost more. The dumbing down and slacker lack of street sense makes costs difficult to fathom for many folks; somebody else is supporting you.

    ****Unless you rally want to look at **ALL**costs; you will be confused lost souls in business and pricing stuff.
    Thus one has 17 years worth of whining that MF and LF backs cost alot; next year it will be 18 years.
     
  33. Yeah, but it can be fun to speculate.
    I find the entire thing somewhat interesting primarily for the reason that seems to frustrate Kelly. The price on these digital backs have stayed very high for quite some time, 17 to 18 years based on Kelly's response. That is a very long time in the digital camera business. In that interim the quality level on the smaller sensors has continued to improve, while the quality level of the digital backs has not increased as fast. As a result, the differences in image quality between the small sensor and the larger sensor has definitely narrowed. I personally think we are very close to the point, if we aren't already there, where there really isn't much reason to even own a medium format digital back. In fact, and this is undoubtedly outside the the original purpose of this post, I am beginning to believe that, unless you are actually shooting film, the terms "medium format" or "35mm equivalent" are about to become meaningless for the majority of the population, if they aren't already.
    Maybe the real question here is; "Why is there such a price gap between medium format digital and full frame digital when the image quality gap no longer justifies it?"
     
  34. The BULK of folks waiting and whining "why LF or MF backs cost so much" have *ALREADY* leapfroged and gone to high end Full Frame dlsrs.


    Thus one has a *Declining* market for LF and MF backs.


    Our 35 and 50 megapixel LF backs are from the mid 1990's; for smaller stuff'; today I use a highend FF dlsr.


    As FF dslrs have matured; sales of LF and MF backs have declined


    MF and LF backs are like film scanners; declining mature products that with time have less users; thus fewer new players want to enter the dodo market.
     
  35. Dan, the MFDB quality has increased quite a lot. However the same issues that keep the prices high also slow the development process.

    We have come from a few MP to 40+MP backs. Size increased. We have touch screen displays, multiple tethering options, better batery life, beter ISO performance and the list goes on. Maybe the progress is not that fast as on DSLRs, but the market for MFDBs has different requirements.

    If you take into account the manufacturing costs of the larger surface area then it should be clear development is also much more expensive than with smaller chips. Your dev samples cost more to produce.
     
  36. Lens circa 1942; cost used 5 dollars in early 1960's
    4x5 camera circa 1947
    Computer circa early 1995 Pentium 90 Mhz
    OS Win 3.11
    LF scan back circa 1996
    35 Megapixel image shot 13 years ago.
    [​IMG]

    [​IMG]

    [​IMG]
     
  37. @Kelly Flannigan
    I think that you are entirely off base with your comments. Whether an amateur photographer has an economics background or technical knowledge in the manufacturing process to understand pricing on high end electronics should not come along with insults launched in every direction. I am a professor, I do understand pricing and economics, and from the sound of it a lot more than you do. You may sell hot dogs on a street corner (or what ever the hell you sell) but you don't know squat about pricing. Pricing does not have anything to do with manufacturing or development costs. It is a complex voodoo that even those who do it profess a sense of mystery and wonder. Certainly I know enough about it from years of working on it that a question about pricing does not require a condescending and pig-headed response. So you don't like academics or governmental workers. So what? I think that you need to take your reactionary comments elsewhere. This is a photo site.
     
  38. "Pricing does not have anything to do with manufacturing or development costs."
    Really. Ever hear of the word "amortization"? Something cannot be sold for less than it takes to bring it to market, if the goal is to make any money doing it.
    Pricing does not necessarily closely follow manufacturing and development costs, if you're someone like say, Nike, who can charge the same high price for a shoe no matter if those costs are a large or small part of their cost. Or say Coke, who sell what amounts to caffeinated sugar water. Those companies rely on marketing to create demand.
    But try being a vendor to Walmart, as they squeeze you yet again.
    Pricing is not always a "complex voodoo". It can be very straightforward.
     
  39. You've just spent one million dollars to develop a product. You are confident that you can sell 100,000 of them. That means that in order to recoup your development costs, you need to add ten dollars to the price of the product. This is in addition to what it cost to manufacture, market, and service the unit, manage and pay employees, pay for your utilities and manufacturing and office space, plus interest to the bank that lent you the million bucks in the first place. So, maybe you charge $100 per unit. You sell lots of them and all of those expenses are covered and hopefully you make a little money at the end of the day.
    Okay, now you develop another product for another $1,000,000. But this is a specialized product and you're only going to be able to sell about 2,000 of them. That means that R&D works out to $500 per unit. Can you sell this product for $100 each? Heck no! You'd go broke. The price needs to cover that $500 plus all of your other expenses. Maybe you'll charge $2,500 apiece.
    A customer calls you one day. "Hey, why is Product B so expensive? I thought it would be cheap like Product A."
    "Sorry, sir," you reply as you explain that it takes much more to cover the cost of development of a product that isn't sold in large quantities.
     
  40. I can't resist bringing my own small contribution to the off topic controversy which has flourished in this thread : certainly government wastes vast amounts of taxpayer money, for instance when it bails out banks at the cost of hundreds of billions of dollars ; banks which certainly have the common sense, elementary knowledge and sense of thrift needed to run stable, long term profits…
    Oh well, maybe we should all stick to the original topic !
    One point not menionned here, if I'm not mistaken is the installed base. Digital backs are useful to the extent you have a body to use them. When MFDB manufacturers did the math to figure out how they could spread their costs, they certainly factored in current sales of MF bodies + legacy systems which could be used with their digital backs. The total represented the upper limit of the theoretical market, and of course only a fraction of that total represented the real potential market.
    Comparatively, when Nikon and Canon began to turn out DSLRs, in addition to lower costs (smaller sensors) they were contemplating a much larger installed base : people already owning their systems. Sales anticipations were much bigger, allowing for muich thinner spreading of costs.
    I did not find worldwide statistics, but this is what I found for the French market, after a quick search :
    In 2009, DSLRs and interchangeable lens cameras : 495 000 units
    In 2008, MF cameras with digital backs : 334 units
    Of course, the ratio will be different in other countries, but this gives an idea of how small the MF market is compared with the DSLR market.
     
  41. I agree that we should keep to the original topic. Pricing is not amortization. Anyone thinking that pricing is straight forward should try to buy airline tickets online. The price can change minute to minute. Nearly everyone on a plane pays a different price. I am sure that there are multiple prices for MF sensors too.
    Where I lose my cool is when people of a certain political bent start to froth at the mouth over how stupid government people and academics are. Was that on topic? I think not. I have known a great many government workers who work under difficult conditions with little pay and no thanks for what they do. Likewise with academics. @Kelly Flannigan you have a strange vision of what academic life is like. We have been under a crisis and collapse for a decade and a half. No one is "comfortable".
    Yes, let's do keep on topic, and keep the insults and the political blather off of this forum. It does nothing to inform us of anything. I don't come here for pundits and jingoism. I come here for photography.
     
  42. Pricing is not amortization. Anyone thinking that pricing is straight forward should try to buy airline tickets online. The price can change minute to minute. Nearly everyone on a plane pays a different price. I am sure that there are multiple prices for MF sensors too.​
    Trying to compare prices for technology items to airline tickets, are we now? That's about as absurd as Kelly's ramblings. ;-)
     
  43. Look at the simple facts:
    (1) Digital MF and LF backs have been on the market for 17 years.
    (2) Amateur have alway whined that they cost alot
    (3) Digital MF and LF backs are a mature old product; around 85 % of digital 20 year run.
    (4) Digital MF and LF backs are a declining market; many whiners/wisher have jumped to FF35mm.
    (5) Whiners want makers MF/LF back makers to sell them their products below cost.
    (6) Statement (5) is wanting a handout; welfare; something for nothing.
    The 17 year want by amateurs of products to be sold below cost is a handout. The required sales price versus units solds makes the sales price to be many many thousands; not what folks want;.
    *****There is a big WIDE gap in amateurs willing price they want to pay; and the sellers required sales prices versus volume,
    Since there is such a WIDE gap; you sit on the sidelines and hope and dream that MF and LF backs will be magically cheaper in year 18 in 2011. We as humans all want this; gold for 100 per ounce; Noctiluxes for 100 bucks; riding mowers for 200 bucks.
    (A) This WIDE gap in Bid versus Asking price is 17 years old with MF and LF backs; folks want to pay 1/3 to 1/5 of a producers cost.
    (B) Most buyers of MF/LF backs for the last 17 years are pros. They weigh the cost versus labor saved. Since they have actual clients; they can consider whether to punt, rent or buy a MF/LF back. The same goes with bulldozers; pros tend to buy bulldozers.
    (C) The Folks who do not understand why MF/LF backs cost a lot do *NOT* understand costs. This is real sad; it reflects the drop in understanding of basic Business. One has confused lost folks for 17 years wanting to ignore development, tooling and production costs. These costs are real.
    (D) The WIDE impass of Bid versus Ask prices means sales are super low. The main question is one of welfare; many folks here want a maker to sell their gizmo at 1/3 their real costs. But the seller as street sense; like a NYC hotdog vendor; thus the seller is not going to sell below costs.
    (E) Ponder why the whine is high here on this thread from College types about understanding product costs. They are not involved in high volume manfacturing; thus with ignorance they like to ignore all the many many horrid costs we engineers actually consider on a product. You can call me pig-headed to consider amortization, flying to China to firefight production issues, consider yields, consider software issues, consider warranty costs, consider tooling repairs; consider field service; consider *every darn cost.*
    (F) Workers who are not directly involved with costs in their jobs often have *less road feel* as to why stuff costs X or Y.
    There *is* a market for MF and LF backs at BELOW cost pricing; that is what folks want that are confused.
    This thread points to why more and more manufacturing is moved out of the USA; huge groups of folks cannot figure costs anymore. Just bringing up costs gets many folks saying that many of the real world costs do not exist.
    Your own model to sell widgets can be a truncated college one and ignore gobs of things; and thus the breakeven cost is radically lower. In the real world; our livelyhoods depends on a products success. Our models are often an order of magnitude more complex than the college business model.
    Our model is fine tuned for our own industry; and we know all the internal costs of screwups and labor costs; environmental costs; dealing with the lay publics cost. We have no secure paycheck. We have to roll the dice to look at the Internal rate of return/IRR on a mess of possible new products.
    Some the better IRR ones might look great; but *we do not have the capital* to float Project #39; thus we go for Project #23 with a slightly less IRR but one we can self finance. Even with all the modeling; there are still big risks. We have a world recession; buyers with less ammo to buy stuff; less folks lending. About thee only folks buying stuff in some industries is the government; a ballooning sector with pet projects.
    Why stuff COSTS so much and how to PRICE stuff is a core tenet of *ANY*business. If you mention to a prospective employer that costs do not matter; you are less of a value; you have no street sense. Many millionaires started from little.
    It is sad that college profs are saying on this thread:
    " I am a professor, I do understand pricing and economics, and from the sound of it a lot more than you do. You may sell hot dogs on a street corner (or what ever the hell you sell) but you don't know squat about pricing. Pricing does not have anything to do with manufacturing or development costs "
    it points to a total lack of understanding basic business
    We have college profs teaching our young folks:
    ****" Pricing does not have anything to do with manufacturing or development costs "****
    Thus this points to why many folks cannot fathom why things are priced; they do not consider costs; like a NYC hot dog vendor does.
    Ponder whether a college prof could survive *ONLY* selling hotdogs if real world costs are ignored.
    Here I am not holding my breath that MF or LF backs are going to radically drop in pricing. It *COULD* happen; but it might be when New Orleans or LA gets 1 foot of snow too. If some giant sensor becomes available; a low cost LF or MF back might come out. Folks have been saying thay tune since the 14.4 Modem was new and cost 250 bucks; thus the dream goes on as we wait for Santa Claus.
    ***Folks who want to ignore costs are going to get hurt in Business; or on threads and real life meetings. This is because some of us with real world experience are going to inject the other elephant costs; thus we are party pooper for injecting reality. ie considering actual costs; not best case stuff.
    One is going to get conflicts like this in homeowners associations; goverment; snow cone/hot dog stand management; or with your husband or wife or with you bank loan officer. Or in Acme MF/LF digital back maker too. Most all businesses fail due to lack of capital in a year or two. Folks step on land mines; costs are higher than the simple model; you burn through cash and are bankrupt.
    Unless you have somebody else injecting cash into your business; you have to someday look at actual costs or you may go bankrupt. Costs and fundamental to any business; learn what they are.
    ***The simple reason why MF and LF backs have a high sales price is they cost a lot to make***
    **Why ask about why a photo item's cost on a photo board if you do not want to consider the products real life costs by the folks who make it?
    There is a reason this is confusing to most all; you ignore the makers costs.
    If you think it is so easy; get your neighborhood to cash in their 401k's and sell their houses to make that profitable 1000 buck MF back. But all your assets up; so your own hide is directly related to the success or failure of the low cost back. That is what some of us have done on some items we launched; our hide is in it.
     
  44. ***The simple reason why MF and LF backs have a high sales price is they cost a lot to make***

    No. The buyer base will get them irrespective of price so there is a big artificial profit margin embedded in them, and this translates also to full-frame (24x36) DSLRs. Nikon simply said in answer to why the D3X is so expensive along the lines of "It competes with medium format digital and is priced accordingly. We have no plans of going into a price war with Canon (1Ds Mk III)."
    Hasselblad's importer in Finland said very clearly to me that the price of the H series digital cameras has nothing at all to do with the cost of manufacture. I take this to mean that he takes a nice cut from every camera sold.
     
  45. There is a HUGE WIDE gap in BID and ASK prices on MF/LF backs:
    (1) The folks who want low cost few grand MF/LF backs believe the college profs comments of:
    "Pricing does not have anything to do with manufacturing or development costs "
    (2) Other folks like me who have worked in high volume high tech products have to consider all costs; or get fired; or go bankrupt. Thus all the costs are sweated and accounted for and our numbers are a lot higher than camp #1.
    Folks in Camp #1 use a subset of costs than Camp #2; thus they get confused "why stuff costs so much".
    ****Thus the question posted does create a difference in viewpoint.
    The folks who have been to war releasing a high tech product know it is a bloody mess and the pricing *HAS* to be high enough to make a profit to keep the game going another round.
    The folks who are on the sidelines candy coat costs; best case them. The cost of dealing with a 1000+ page govenment document on environmental stuff is counted as nil; when we might as a maker transfer the whole line overseas than deal with 100 to 250k worth of redtape and studies.
    In some states the tooling is taxed; whether it is mothballed or not. Thus one in a low production volume item product has one making it in batches; and the tax man is taxing the tooling even if it sits idle for 1 year. Thus many times you ship the product overseas; or you kill the product and crush teh tooling to get it off the tax rolls. Thus the governments taxes are a concern; one has taxes on tooling going on every year whether one is making any parts. If volume on the product drops in half; the tooling tax per unit doubles; thus ones profits drop unless one raises prices.
    In California the anti business stance of government means many high tech lines are moved overseas; this has been going on for several decades. Once one gets the bugs out in prototype/small production; you move it overseas to drop ones costs.
    This whole thing brings up all the elephant costs things folks really *do not want to talk about*.
    ie environmental costs; unions; health care costs; taxes; labor costs, liability insurance, taxes on tooling; costs of firing workers; costs of an overseas plant; costs of flying folks overseas; dealing with regional materail issues overseas.
    All these taboo things are considered on actual products and are actually costs folks consider on products.
    The main conflict is that folks who ignore costs have in their minds that MF/LF backs can be sold at 1/3 to 1/5 of the 17 year long selling prices of these products.
    Thus their confusion is due to costs they ignore.
    Their simple model has a lower B in y=MX +B; thus their selling price model is way less.
    Without any details ponder why with so many camera makers; why are MF and LF backs so expensive still after 17 years?
    One has dozens of players who with dumb luck could have captured the want here of the 1000 buck MF back or 200 buck riding mower; but it has not happened yet.
    Today with a major world recession; costs on products are sweated even more than in earlier eras.
    Cost due matter on products. If you ignore some costs you can sell it a a low price until you go bankrupt.
    ***
    ***Illka; if these backs have such a high profit margin;

    why are there so few players?

    Why is it a small market?

    Why are amateurs still whinging after 17 years and confused?

    If it is such a great market why is it small and pricy?
     
  46. If there really was a high profit margin on MF and LF back after 17 years there would be radical pricing drops as new players came in the market.
    This really has not happened.
    ***Thus the typical photo.net saga goes on; folks confused why items cost so much.***
    Folks asking it they should charge anything to shoot a wedding.
    Folks asking why Nikon is dropping the 9000 scanner
    Folks asking why an Epson RD-1 or Leica M8/M9 costs more than a dRebel.
    Folks asking why MF or LF backs cost so much
    ****The main core fundamental tenet of amateurs confusion about these issues is ignoring costs;
    Folks think products have zero product, environmental, health, freight; tolls; customs; labor, insurance, taxes costs and thus and thus want the gizmo sold at below cost pricing.
    The super WIDE gap is due to folks ignoring actual costs;
    that is why most new businesses fail in short order; no street sense; costs are ignored.
    ***The simple reason why MF and LF backs have a high sales price is they cost a lot to make***
     
  47. Unless folks really want to consider what things cost in life; you set up a lifelong state of confusion.
    You buy the car and count taxes; tires; gasoline, insurance, interest.
    Or maybe it is daddys car thus those wedding shoots 100 miles away each weekend have a zero commute cost; instead of say 60 to 100 bucks.
    Thus the 400 to 500 buck wedding shooter might use daddys camera, computer and car; or it is paid for with ones own hide/blood.
    One can get radically different break-even's and profits by ignoring costs; or having others footing the bills.
    The 500 buck wedding shooter can not declare the income and all ones expenses are paid by daddy thus the profit can be a lot.
    Or the 500 buck wedding shooter can fork out for use taxes; business taxes; car, computer and camera costs and the 500 buck pure profit goes to about zip; ie nothing.
    Without considring costs amateurs remain confused in business matters and why stuff costs XYZ.
     
  48. Besides the low production and high reject rate of chips, medium format digital backs are geared to the most demanding users, for which they have largely replaced medium and large format film photography.
    While expensive by amateur standards, medium format digital is obviously justified according to the needs of professionals. Material cost savings account for a significant part of the justification. However, the image quality must be there for this revolution to occur. Several backs have been reviewed in www.luminous-landscape.com, including direct comparisions with film where they fare favorably against 4x5 results, much less medium and small format film. In my own experience, the image quality of a low-end Hasselblad CFV-16 back is stunning, compared to that from a D3. This is best seen in editing or in print, and hard to demonstrate on the web's meager resources.
    Most current MFD backs deliver a full 16 bits/channel color depth with a 12-13 stop dynamic range. No small format DSLR comes even close (the useable dynamic range is typically 7-9 stops. DXO test results are exaggerated, and unduly biased by noise reduction). That doesn't happen by accident. It requires careful design, component selection and fabrication. All this adds to the cost, which must be distributed over a much smaller sales number than any DSLR.
    Along with Kelly, I find the insinuations of "corporate conspiracy" and "price gouging" tiresome and (unfortunately) predictable. I do not find the concurrence of an economics professor particularly convincing.
     
  49. Kelly is foolishly confusing wishful desire with entitlement. In other words, his rant here is entirely unfounded. Sure, some people would love to be able to buy a 100MP full-frame 4x5" weatherproof digital back with a useful ISO range of 50 to 6400 and 500GB of internal storage for $1000 (while retaining the size and weight of a Fuji Quickload holder, by the way), but the majority of those same people never expect that dream to be a reality. It is something they wish were true, but it is not an expectation.
    Kelly, no one should be attacked for simply expressing a wish. If someone went on a tirade expressing their outrage the that the government didn't have a program to ensure that every interested party was provided a gratis Leica S2 outfit, you might have a point. In the real world, you don't.
    Oh, and there are plenty of career government employees and tenured university professors who are extraordinarily responsible professionals, and who work as hard as anyone. There are plenty of private-sector employees who are inefficient, overpaid, wasteful, and who feel entitled to their position. That which you spout is dogmatic claptrap.
     
  50. Well, Ricardo, I did not say that pricing is amortization. But amortization is a part of pricing.
    Airline ticket pricing is hardly a good analogy to anything else. Their pricing is usually characterized by ordinary folks as "crazy".
    Airlines deal in a highly perishable product and high fixed costs. They are in a constant guessing game. They don't "win" with every flight. Overall, though, they need to amortize their fixed costs through seat sales and cargo. Note also that Southwest, one of the most consistently profitable airlines, has done very well with low, flat-rate pricing.
    The cost to produce something and bring it to market does not affect the highest price it can be sold at, but it does determine the lowest price it can be sold at and not lose money. That's why I disagreed with your blanket statement regarding pricing in relation to production costs.
    I said that pricing can be very straightforward. I didn't say it is always straightforward.
     
  51. "I dont however understand why a 20 megapixel digital back is 3 times the cost of a 5D Mark II. "


    Maybe some new revolution in photography will change all that and the prices will start dropping like crazy, but I dont see that happening in the near future. On the other hand, do you realize that a Canon EOS- 3(AF film camera) was selling for close to $1800 about 8 years ago and now they are selling for peanuts on eBay ! I wonder what happened to all those Production Costs.
     
  52. Because sufficient numbers of pros would pay more, once-upon-a-time, and the $50K cost of a MFDB was less than what they were paying for film and lab costs if they were doing high-volume production work. It was an economic decision more than an aesthetic one for most pros who bought them.
    3MP DSLRs cobbled together out of Nikon F5's once cost $40K too. They were the fastest Ferrari's of the day when street cars wouldn't go 200 MPH (in those days it was the instantaneous feedback loop, not ISO's, that works with the speed analogy).
    To continue with an auto racing metaphor, MF digital is cratering because the few that truly need a Formula One car to compete either have one already, or simply came to the realization that it's a bad business model without deep-pocket sponsors.
     
  53. Look at CD Burners compared to LF/MF digital backs:
    The first CD Burner here was a 2X speed and cost about 550 bucks. Today they come with every Walmart 400 buck computer as a CD/DVD Burner. The units cost is about say 10 to 15 bucks to the OEM guys.
    The First used LF scan back here was about 10 grand; that was about in 1997. It was a used one 35 megapixels. A new one was about 20 to 25K.
    Today a Betterlight Model 6000E-HS is 9495 dollars; it shoots a 6000x8000 pixel image; 137 Megs
    http://www.betterlight.com/products4X5.html
    The second Phase One 4x5 scan back here shoots a 6000x8400 pixel image; 144 megs in photoshop It is from about 1998ish as was bought used for 4000 bucks.
    These LF/MF digital backs have never really dropped in pricing in a radical way.
    Ponder *WHY* things like CD burners cost 1/20th of what they cost eons ago; and burn 20 times faster.
    Ponder *WHY* things like a MF/LF digital backs have dropped only about 1/2 in pricing.
    Pull out all the stoppers; is it a big conspriracy? labor? insurance? some weird patent? That folks not shop around? Maybe it is LF and MF digital back buyers do not mailorder; or do the internet; ie they are sold door to door by the Fuller Brush man?
    Both of my LF 4x5 digital backs here will work on a 1940 Speed Graphic with spring back; or a more modern one with a Grafloc back. There is no patent issue with making accessories that fit a 70 year old camera's back.
    Both MF and LF backs have been made long enough the patents if any are about expired; ie 17 years.
    Maybe pricing is high due to some big conspiracy by processing labs; or by film makers. Maybe these two groups bought up all the patents; like Detroit did with those 100 MPG carbs for cars.
    Ponder why 220 and Kodachrome's plugs got pulled; it by gosh cannot be costs; it is a big conspiracy by the digital camera folks!
     
  54. @Jeff Livacich
    True. The discussion that ensued was much more interesting than @kelly flannigan was willing to admit.
     
  55. Well, Ivan, at least they don't have to deal with Bernie Ecclestone!
     

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