Although the concept and its proverbial example "Give 'em the razor; sell 'em the blades" are widely credited to King Camp Gillette , the inventor of the disposable safety razor and founder of Gillette Safety Razor Company, [1] Gillette did not originate this model. The urban legend about Gillette is that he realized that a disposable razor blade would not only be convenient, but also generate a continuous revenue stream. To foster that stream, he sold razors at an artificially low price to create the market for the blades.
This model has been used in several businesses for many years. The Gillette company still uses this approach, often sending disposable safety razors in the mail to young men near their 18th birthday, or packaging them as giveaways at public events that Gillette has sponsored.
Rockefeller , looked to China to expand their business. Representatives of Standard Oil gave away eight million kerosene lamps for free or sold them at greatly reduced prices to increase the demand for kerosene. Among American businessmen, this gave rise to the catchphrase "Oil for the lamps of China.
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Comcast often gives away DVRs to its subscribing customers. In its decades as the dominant photographic film producer in the United States, Kodak sold its cameras at low prices and enjoyed large profit margins on the consumables of the trade, such as film, printing supplies, and processing chemicals.
While this strategy worked for many years, it was challenged in the late 20th century when a rival, Fujifilm , introduced more economical film and processing methods. Finally, digital photography made the strategy obsolete, as it needs minimal consumables. The razor and blades model may be threatened if competition forces down the price of the consumable item. For such a market to be successful the company must have an effective monopoly on the corresponding goods. Predatory pricing to destroy a smaller competitor is not covered here. This can make the practice illegal [ where?
Computer printer manufacturers have gone through extensive efforts to make sure that their printers are incompatible with lower cost after-market ink cartridges and refilled cartridges.
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This is because the printers are often sold at or below cost to generate sales of proprietary cartridges which will generate profits for the company over the life of the equipment. In fact, in certain cases, the cost of replacing disposable ink or toner may even approach the cost of buying new equipment with included cartridges. Methods of vendor lock-in include designing the cartridges in a way that makes it possible to patent certain parts or aspects, or invoking the Digital Millennium Copyright Act [7] to prohibit reverse engineering by third-party ink manufacturers.
Another method entails completely disabling the printer when a non-proprietary ink cartridge is placed into the machine, instead of merely issuing an ignorable message that a non-genuine yet still fully functional cartridge was installed. In Lexmark Int'l v.
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On the other hand, in August , Lexmark won a case in the United States that allows them to sue certain large customers for violating their boxwrap license. Atari had a similar problem in the s with Atari games.
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PlayStation 4
In addition, each PlayStation Network customer will either receive 30 days of PlayStation Plus , Sony's value-added subscription gaming service that offers free downloads and game trials. Those that already subscribe to PlayStation Plus will receive 30 additional days for free, the same deal that subscribers to Sony's Qriocity cloud-music service will receive. If a user doesn't subscribe to Qriocity, however, he or she will not receive a free subscription.
Sony said that there is "no evidence at this time" that credit-card data was taken.
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Still, the company described several steps that it will take to boost its network security. Sony's online network has been down since April 20 , when the company took down the PlayStation Network and the related Qriocity cloud music service due to a external intrusion, or hack into the network.
Sony has since been sued over the hack, accusing the company of failing to adequately protect, encrypt, and secure its customer data. The suit seeks damages for the data loss and PlayStation Network downtime. Sony Network Entertainment International said that it had engaged multiple expert information security firms since the intrusion, which have conducted extensive tests of the Sony network.
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Sony also created the position of chief information security officer, reporting to Shinji Hasejima, the chief information officer of Sony. The new position will be responsible for overseeing security measures including additional software monitoring and configuration management to defend against new attacks; enhanced levels of data protection and encryption; enhanced ability to detect software intrusions, unauthorized network and unusual activity; and implementation of additional firewalls.
Sony also said that it would move into a new data center, an expected but expedited transition because of the hack. As might be expected, the company said it was working with law enforcement.