Interesting article, and there's a lot to think about here for people involved in media creation (like me).
Two minor but related points, however:
1) It's important to realise that when you say "here's how you get me to give you money: do X, Y and Z thing and sell at price P", you are in fact offering the content industries a choice.
You are not saying "if you don't, no-one will buy your product." You're saying "If you don't, people like me won't buy your product - so do you want to make movies/books/games for people like me?"
Speaking as a content creator in both text and video, one of the major aspects I consider when planning a project is the target audience, and how much money they feel comfortable spending. An audience that is willing to spend a lot of money (say, partner-level accountants) is, all else being equal, a lot more likely to get the green light than an audience that isn't (free culture anarchists).
That means if you're not willing to pay much money for a product, and no-one else like you is either, stuff that's of interest to you is less likely to get made. Making a product for an audience that might love it, but won't pay, is a rookie mistake, and most producers learn from it the first time and don't do it again.
So if you want stuff that speaks to you, features characters like you in sympathetic roles, and talks about how you experience the world, being willing to spend more money on it actively increases the chances it'll get made.
(Why do you think there are so many "family-friendly" movies made every year? Because that's a demographic that buys.)
2) When you say "A DVD / game / book should cost X", you either a:
a) are able to describe in detail the target audience, including demographic information, likely points of contact and awareness routes, and of course size, purchasing budget and likely penetration for the media product in question, and also produce a line-item budget for creating the entire piece of work, including marketing budget, professional fees, and so on, that an expert in the field would find plausible,
or
b) Are talking out of your arse.
Media pricing is more complicated than "Well, I'm only willing to pay $5 for a game, so game developers should just make them cheaper." or even "Well, paperback books cost $7 and most of that must be printing and distribution costs."
> Well, I'm only willing to pay $5 for a game, so game developers should just make them cheaper.
No, it's not very complicated. You are better off letting the demand-offer forces of the market work, with elastic prices just like for the humble bundle or steam sales. A fixed-price is like a big car: you won't satisfy everyone. People have a fairly good idea of how much they have in their pockets and how much they CAN spend on stuff. As a content creator, your goal should be to maximize your audience, therefore making available to the maximum of people. That should push prices down, not up. So, if most people value "games" at 5$, that's your market price. You have to live with it, and no elaborate strategy is going to change anything about it.
Marketing to the mainstream is a strategy, but it's not the only strategy or necessarily the most successful.
Targetting niches and charging higher prices can work well too - I know more than a few people making reasonably good money off doing so.
You use the phrase "most people" there. A content creator doesn't care what "most people" will pay for a hypothetical generic product - he or she cares what the audience for his potential product will pay for that product. And that number can be wildly higher or lower depending on the audience and the product.
Agree mainstream is only A strategy, but look at all other markets-products-businesses: you won't find many examples where an industry has had tremendous growth while still keeping its price away from the mainstream.
Every business that wants to grow can do so by reaching to more clients. Cars became popular when they became cheap enough to buy (Ford T). Computers became popular not because the Apple II was great and expensive, but when the C64 was cheap enough everyone could buy it. I could go on for hours, it's something you find in every industry.
Of course, Ferrari, Louis Vuiton, Hermes, all those brands appeal to only a niche of customers. And they are still very profitable. But they won't grow much.
Games are not particularly price-elastic. You can drop the price of a $70 game to $30 and not see a significant increase in sales. That's why they're priced the way they are.
Time-limited bargains like the Humble Bundle and Steam sales work spectacularly well, however.
> You can drop the price of a $70 game to $30 and not see a significant increase in sales
That's because that's still way beyond what most people are willing to pay to play games. You do not reach the threshold at 30 $ where you maximize your audience. It's like saying, "This sports car was 2 million dollars, I am selling it half price and still nobody buys it".
That's precisely why the humble bundle and the steam sales work well. Because they offer you games at a price most people WANT to pay.
A retail game is considered a failure if it sells less than 1m units at $50-70 but the Humble Indie Bundle sold only 450,000 units at an average of just under $6. Clearly there is a market for full-priced games.
Both Steam sales and the Humble Bundle are vehicles for games that have already sold at a higher price and the sales curve is tailing off.
Two minor but related points, however:
1) It's important to realise that when you say "here's how you get me to give you money: do X, Y and Z thing and sell at price P", you are in fact offering the content industries a choice.
You are not saying "if you don't, no-one will buy your product." You're saying "If you don't, people like me won't buy your product - so do you want to make movies/books/games for people like me?"
Speaking as a content creator in both text and video, one of the major aspects I consider when planning a project is the target audience, and how much money they feel comfortable spending. An audience that is willing to spend a lot of money (say, partner-level accountants) is, all else being equal, a lot more likely to get the green light than an audience that isn't (free culture anarchists).
That means if you're not willing to pay much money for a product, and no-one else like you is either, stuff that's of interest to you is less likely to get made. Making a product for an audience that might love it, but won't pay, is a rookie mistake, and most producers learn from it the first time and don't do it again.
So if you want stuff that speaks to you, features characters like you in sympathetic roles, and talks about how you experience the world, being willing to spend more money on it actively increases the chances it'll get made.
(Why do you think there are so many "family-friendly" movies made every year? Because that's a demographic that buys.)
2) When you say "A DVD / game / book should cost X", you either a:
a) are able to describe in detail the target audience, including demographic information, likely points of contact and awareness routes, and of course size, purchasing budget and likely penetration for the media product in question, and also produce a line-item budget for creating the entire piece of work, including marketing budget, professional fees, and so on, that an expert in the field would find plausible,
or
b) Are talking out of your arse.
Media pricing is more complicated than "Well, I'm only willing to pay $5 for a game, so game developers should just make them cheaper." or even "Well, paperback books cost $7 and most of that must be printing and distribution costs."