By davidleetodd on Aug 09, 2007
Management consultants have a saying: "The last iceman always makes money." The last company in a dying industry has a very profitable niche for a long while. There was a neat article in the Los Angeles Times Thursday about the last US manufacturer of cassette tapes. They're making money, even though sales of music on cassette only amount to about 700,000 tapes a year, down from 442 million in 1990. The company, Lenco-PMC Inc., actually makes 22 million cassettes a year. It seems that they have advantages over CDs that make them quite popular among certain segments of the population, for reasons you might not think of. Blind people like them for talking books, because they can be labeled in Braille, something you can't do with a CD. Also, for any user of an audio book, they have the great advantage that they start in the same place they stopped when you move from one player to another. They're also popular with court reporters and religious publishers.
This is the same reason that I advocate supporting old releases of software much longer than conventional wisdom dictates. If a customer keeps using an antiquated piece of software, there must be a powerful reason that may not be readily apparent. Why not keep cashing their support checks? The last iceman always makes money.