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Thursday, February 19, 2004

Winning an iTunes Song? A Question of Economics. 



Thanks to the folks at MacMerc, many people in the blogging community are now well versed in the art of picking a winner in the Pepsi iTunes contest. However, we here at Standard Deviance believe that a key issue has been overlooked and wanted to bring it to your attention before you go out buying Pepsi bottles willy-nilly: Do you even want the Pepsi?

I know the idea of a sure win seems like a no brainer - look under the cap, buy the winner, get a free song. However, you have to ask yourself, do you want the Pepsi in the first place? According to our unscientific study, a 12oz Pepsi in New York City can cost you up to $1.25, and we certainly haven't seen one for less than $1 in a very long time. An song off of iTunes costs $0.99. Lets say you don't particularly like Pepsi, but you want a free mp3. Using our example, the Pepsi you consume must be worth at least $0.26 to you for it to make sense to buy the soda for the mp3. Otherwise you should just log on to the Apple website and buy the song for the regular $0.99. If you hate Pepsi and are just going to pour it down the drain and keep the cap you'd be absolutely crazy to buy the Pepsi for the free song.

Also, you have to think of the opportunity cost of redeeming the cap. By opportunity cost we mean how much is the time worth to you that you will spend redeeming this prize. First off you have to make sure you don't throw it away. Then you have to not lose it before the next time you get a chance to get on the computer. Also, are you an iTunes user? If not you will have to download the iTunes software, install it, and then enter the iTunes code from the cap into the system. Finally, all the Pepsi iTunes credits have to be redeemed by April 30, 2004. If you leave the cap to collect dust in your bag for a few months you may forget to redeem it before it expires. Are you willing to pay $0.26 for a free song that entails this much of a hassle?

If you were going to buy the Pepsi anyway, this is a boon. You get a soda you wanted plus a free song. However, if you are even slightly motivated to buy the Pepsi for the free song, let Standard Deviance give you some advice: Buy a Coke. It tastes better, and you can still download the song off of Kazaa for free.


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