"If the current price is $60, and you drop it to $40, in order to make the same net money you have to sell at least 50% more units - and that is assuming that you can somehow trim your costs by the same percentage, leaving you with similar net money."
You are absolutely, positively wrong on that.
"Lowering the price may lead to less piracy, but does it lead to enough of a decrease in piracy to fill the bottom line?"
This is a confirmed yes.
-----------------------------
Both of these q's are answered through a look at the digital market. Now I admit, I'm a Valve Fanboy, but I'm also interested in the economics of piracy and how you use them.
Your unit thinking is a throwback to the days of retail sales. What was included in the final price was the cost of shelf space, brokerage fees, among a number of different variables that are not issues in the digital space. You don't have to sell more to make less, as your math seems to imply. You can increase sales by dropping the price temporarily, which increases the numbers by a substantial amount.
In fact, it looks like a big part of the problem facing the industry is that they charge way too much for their products. Here are the numbers Newell shared from Valve's experiments with "sale" pricing:
10% off = 35% increase in sales (real dollars, not units shipped)
25% off = 245% increase in sales
50% off = 320% increase in sales
75% off = 1470% increase in sales
Something that just caught my eye on this article is how Mike said he can't figure out the math involved. I submitted this as an article a while back, but it seems that Mike didn't run it (The Youtube, not the giantbomb link). However, here is a very good write up on insight into how Valve's marketing plan works, and how the market can bear a cheaper price. In particular, I would suggest paying attention to the 07:20 - 09:37 section.
This is where Gabe describes the elasticity of price. What Gabe tells his partners is to knock as much off the game as possible. So a game at 75% off in a retail store would cannibalize your sales, hurting your profits, and wouldn't do much to help you. Online, however, you see your gross revenue increase, generating 40x as much revenue. Then, when the price returns to normal, more people buy the game at the new price. How this works is increasing demand for the game.
My guess is that most people felt the game was worth it at the cheaper price. They might buy it for friends, or tell friends that "this game is a good one for you to play".
There's more I can say, but the second link is probably the best at explaining how to compete with piracy.
Having the government fight for established artists over up and coming artists is the problem.
Then let's not forget this. Should Muddy Waters be protected from Led Zeppelin? The Rolling Stones from Led Zeppelin? Oh, but when the Rolling Stones sued Verve for doing exactly what they did, that's somehow wrong. Then they sell the right to the song to Nike.
"But if your "better model" can't compete without using, tagging along, and eventually sucking the blood out of the existing business, then you have failed."
"I'm sure nothing would make you happier than to take the spotlight off of freeloaders."
It's called marketing. I'm sure that you've come to realize through all this that people pay for various ways to access content. The Newzbin case shows that people pay for more convenience, more selection and fewer restrictions. Then there's the fact that fair use does more for the economy than copyright. But I guess data showing that piracy is the industry's fault is also lost on you, judging by how you continuously go right back to the same talking points.
"The feckless social engineers of the UN. And it's not even anything more than some drivel from a "Special Rapporteur" like these:"
So no context for these issues? They're merely dismissed because...?
"That is an answer? The question was whether the GPS in my car required the internet to function. I'm pretty sure it only needs satellite reception."
Not entirely sure on numbers, but most smartphones have GPS capabilities. While not all GPS have internet capabilities, some actually have the capability to surf the web. So it would depend on exactly your type model, but chances are, you already have one. Just need an app.
"I can't imagine why you'd defend such a preposterous, self-important douchebag. Unless he's in your LARP league or something."
He's more than capable of defending himself. You, however, always go through the same routine. Present "piracy is killing industries" argument, ad hom attacks, rebuttal, slink into shadows when proven wrong or move on to next thread to repeat the pattern. And seriously, the insults aren't even that good. As I said, it's just funny to watch you not back up your argument.
"Don't worry about my position, because reading the political winds, I'd say your position is far more tenuous."
Nah, While PIPA is passed, and you get that added bonus, I'm secure that it won't cause a massive influx of money to the ones that paid you to propagate your position. I'm pretty sure that people will figure out ways around the legal system, because that's already occurring. Meanwhile, people like Chris Dodd or Mitch Glazier don't realize that the younger artists are doing without them. They're making their own distribution channels, keeping the copyrights, and the trade industries are losing money to newer innovations. Kind of sad when you think about it, but hey, not my battle. Mine is all about making sure I don't buy one thing from them and give my money to those that make it worth my time.
Now if you'll excuse me, Valve is having another sale.
Awww look, he's losing his temper. It's kinda cute.
So far, I haven't heard any competent governing body declare internet access to be a human right. At lest[sic] not one with any particular gravitas.
Of course now, I'm sure the loophole is that they have no actual power of the US, correct?
So I guess when they put up a report about how the drug policy has failed globally, you won't acknowledge that either. *sigh*
The GPS in my car needs the internet?
Ever heard of Google Maps?
Underserved customers who don't want to pay.
So why not focus on the ones that do?
I know Halloween is right around the corner, and hope that you're warming up for the occasion and you're not really such a pathetic loser in real life.
Wow, you can't go two seconds without trying to be insulting. If your position really isn't that secure, sit down, relax, take a deep breath. Then think about ways to make it better. Say... figuring out that there is more evidence by the day proving you're wrong? But attacking others is really just weakening your position. Just sayin.
Ah, Ad Hom attacks... The sign of a losing argument.
Funny how you can never look at links and see why it was the very definition of prior restraint, but continues ad hom attacks when you can't argue with someone.
"Hate to burst your bubble, but the govt can stop you from downloading Debian or anyting else they want, just ask the people in China about their internet access."
The government can't stop people from downloading a song. Nor can it stop filesharing. But you think it can stop internet access?
I'm beginning to think that you don't work for a software company...
Anyway this:
" no piracy = no DRM"
is dumb.
Even when piracy carried a death penalty, it didn't stop people from copying. So now you're trying to stop people from actually discussing media because it hurts someone's feelings. Yeah, good luck buddy.
"Sourcing TechDirt as a reference for IP concerns is like asking a heroine addict about federal drug policy"
Funny, there were two links up there where I've shown the difference of infringement and theft. Or maybe you're closing your mind to the fact that plenty of people can tell that distinction.
"It says right there: "music and movies". You're all addicted to recorded music, movies and TV shows. And everyone knows it. You're not fooling one single person."
Fact is, with more games coming out, there is more demand for people to play them and review them. There's older games to build material from. And yet, in this incredible need to feel that people are "addicted to recorded music and movies" you ignore this phenomenon that could explain the lost sales...
"Try reading reviews."
Which are based on an opinion, and inflated to give better scores so that they can pad the numbers. And the reviews still don't explain how Rikuo might like the game or not based on her preferences.
On the post: New Research Brings Much Needed Objectivity To Game Piracy Numbers
Valve Fanboy Part II
You are absolutely, positively wrong on that.
"Lowering the price may lead to less piracy, but does it lead to enough of a decrease in piracy to fill the bottom line?"
This is a confirmed yes.
-----------------------------
Both of these q's are answered through a look at the digital market. Now I admit, I'm a Valve Fanboy, but I'm also interested in the economics of piracy and how you use them.
Your unit thinking is a throwback to the days of retail sales. What was included in the final price was the cost of shelf space, brokerage fees, among a number of different variables that are not issues in the digital space. You don't have to sell more to make less, as your math seems to imply. You can increase sales by dropping the price temporarily, which increases the numbers by a substantial amount.
Something that just caught my eye on this article is how Mike said he can't figure out the math involved. I submitted this as an article a while back, but it seems that Mike didn't run it (The Youtube, not the giantbomb link). However, here is a very good write up on insight into how Valve's marketing plan works, and how the market can bear a cheaper price. In particular, I would suggest paying attention to the 07:20 - 09:37 section.
This is where Gabe describes the elasticity of price. What Gabe tells his partners is to knock as much off the game as possible. So a game at 75% off in a retail store would cannibalize your sales, hurting your profits, and wouldn't do much to help you. Online, however, you see your gross revenue increase, generating 40x as much revenue. Then, when the price returns to normal, more people buy the game at the new price. How this works is increasing demand for the game.
My guess is that most people felt the game was worth it at the cheaper price. They might buy it for friends, or tell friends that "this game is a good one for you to play".
There's more I can say, but the second link is probably the best at explaining how to compete with piracy.
On the post: New Research Brings Much Needed Objectivity To Game Piracy Numbers
Re: Re:
On the post: Free Justin Bieber: Do We Really Want Congress To Make Bieber A Felon?
Re:
How about Jay-Z? How about Dolly Parton?
Having the government fight for established artists over up and coming artists is the problem.
Then let's not forget this. Should Muddy Waters be protected from Led Zeppelin? The Rolling Stones from Led Zeppelin? Oh, but when the Rolling Stones sued Verve for doing exactly what they did, that's somehow wrong. Then they sell the right to the song to Nike.
When the song was a folk song in the first place.
On the post: PayPal Freezes Diaspora's Account
Paypal still sucks
Link
On the post: Free Justin Bieber: Do We Really Want Congress To Make Bieber A Felon?
Re: Don't Tempt Me
On the post: Wyden: PROTECT IP Act Is About Letting The Content Sector Attack The Innovation Sector
Re: Re: Re: Re: Re: Re: Re:
On the post: Wyden: PROTECT IP Act Is About Letting The Content Sector Attack The Innovation Sector
Re: Re: Re: Re:
I guess Hulu has failed by your logic...
On the post: New Research Brings Much Needed Objectivity To Game Piracy Numbers
Re:
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
It's called marketing. I'm sure that you've come to realize through all this that people pay for various ways to access content. The Newzbin case shows that people pay for more convenience, more selection and fewer restrictions. Then there's the fact that fair use does more for the economy than copyright. But I guess data showing that piracy is the industry's fault is also lost on you, judging by how you continuously go right back to the same talking points.
"The feckless social engineers of the UN. And it's not even anything more than some drivel from a "Special Rapporteur" like these:"
So no context for these issues? They're merely dismissed because...?
"That is an answer? The question was whether the GPS in my car required the internet to function. I'm pretty sure it only needs satellite reception."
Not entirely sure on numbers, but most smartphones have GPS capabilities. While not all GPS have internet capabilities, some actually have the capability to surf the web. So it would depend on exactly your type model, but chances are, you already have one. Just need an app.
"I can't imagine why you'd defend such a preposterous, self-important douchebag. Unless he's in your LARP league or something."
He's more than capable of defending himself. You, however, always go through the same routine. Present "piracy is killing industries" argument, ad hom attacks, rebuttal, slink into shadows when proven wrong or move on to next thread to repeat the pattern. And seriously, the insults aren't even that good. As I said, it's just funny to watch you not back up your argument.
"Don't worry about my position, because reading the political winds, I'd say your position is far more tenuous."
Nah, While PIPA is passed, and you get that added bonus, I'm secure that it won't cause a massive influx of money to the ones that paid you to propagate your position. I'm pretty sure that people will figure out ways around the legal system, because that's already occurring. Meanwhile, people like Chris Dodd or Mitch Glazier don't realize that the younger artists are doing without them. They're making their own distribution channels, keeping the copyrights, and the trade industries are losing money to newer innovations. Kind of sad when you think about it, but hey, not my battle. Mine is all about making sure I don't buy one thing from them and give my money to those that make it worth my time.
Now if you'll excuse me, Valve is having another sale.
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
So far, I haven't heard any competent governing body declare internet access to be a human right. At lest[sic] not one with any particular gravitas.
Of course now, I'm sure the loophole is that they have no actual power of the US, correct?
So I guess when they put up a report about how the drug policy has failed globally, you won't acknowledge that either. *sigh*
The GPS in my car needs the internet?
Ever heard of Google Maps?
Underserved customers who don't want to pay.
So why not focus on the ones that do?
I know Halloween is right around the corner, and hope that you're warming up for the occasion and you're not really such a pathetic loser in real life.
Wow, you can't go two seconds without trying to be insulting. If your position really isn't that secure, sit down, relax, take a deep breath. Then think about ways to make it better. Say... figuring out that there is more evidence by the day proving you're wrong? But attacking others is really just weakening your position. Just sayin.
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
Re: Re:
"... if it wasn't for piracy the UK movie industry would be in a Platinum age."
[citation needed]
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
Re: Re: Re: Re: Re: Re: Re: Re:
Funny how you can never look at links and see why it was the very definition of prior restraint, but continues ad hom attacks when you can't argue with someone.
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
Re: Re: Re: Re: Re: Re: Re: Re: Re:
The government can't stop people from downloading a song. Nor can it stop filesharing. But you think it can stop internet access?
You're a riot a minute.
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
Re: Re: Re: Re: Re: Re: Re: Re:
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
Re: Re: Re: Re: Re: Re: Re: Re:
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
Re: Re: Re: Re: Re: Re: Re: Re:
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
Re: Re: Re: Re: Re: Re: Re: Re:
Anyway this:
" no piracy = no DRM"
is dumb.
Even when piracy carried a death penalty, it didn't stop people from copying. So now you're trying to stop people from actually discussing media because it hurts someone's feelings. Yeah, good luck buddy.
"Sourcing TechDirt as a reference for IP concerns is like asking a heroine addict about federal drug policy"
Funny, there were two links up there where I've shown the difference of infringement and theft. Or maybe you're closing your mind to the fact that plenty of people can tell that distinction.
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
Re: Re: Re: Re: Re:
The fact that gaming has potential to make more than Movies and music combined is obviously lost on you...
Fact is, with more games coming out, there is more demand for people to play them and review them. There's older games to build material from. And yet, in this incredible need to feel that people are "addicted to recorded music and movies" you ignore this phenomenon that could explain the lost sales...
Competition for people's time.
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
Re: Re: Re: Re: Re: Re:
Which are based on an opinion, and inflated to give better scores so that they can pad the numbers. And the reviews still don't explain how Rikuo might like the game or not based on her preferences.
On the post: 'British Cinema's Golden Age Is Now': So Where's The 'Serious Problem' Of Copyright Infringement?
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