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Originally Posted by Nautilus
We're not selling it for pennies. $30-40 is not that cheap at all. You can regret you're not getting $5 you want for every video you sell, and even more so when you have huge 2000+ content library you're selling for the same $30-40, but again, be reasonable. Customers do not have unlimited budgets, they're not going to pay you $10K for your entire collection. Even $100-200 will be a tough nut to shell.
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How do you figure? Say you have 20 videos. Your membership is $20/mo. You just sold that video for $1. The more videos you have, the less their individual value.
I do hear what you're saying about consumers not having unlimited budgets and I get that. But, why should they get sooooooo much for such a small monthly fee?
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Originally Posted by Nautilus
Well that's normal, as time goes by customers want more for the same amount of money. Average computer is still worth about $1000, but modern computers are 100x more powerful than those that were sold 20 years ago. Does that mean manufactures should charge $100K for them? I do not think so.
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LOL..I'm not saying they should pay that. Good point though. But, the cost of production remains the same, hence the little difference in price for a better product. BUT, if I want more memory, a faster processor, a better graphics card, the price goes up. What I"m trying to say, is at a certain point extra, bleeding edge, benefits should cost more. Overtime the cost of those additional benefits will drop and you make them part of the monthly fee, but they would be replaced by the next wave of benefits. Just like a computer or a car.
Quote:
Originally Posted by Nautilus
Loss is the keyword. They gained online, but not enough to make up for their losses elsewhere. Why haven't they made enough from their online sales? Obviously because their business model is flawed. If they offered their entire library plus updates for $20-30/month, and opened up an affiliate program, they'd have 10 million members in no time - and that's 2 billion of found money in just one year. And they still have box office, DVD/CD sales, TV rights etc etc. Demand is there, they just do not see it, or keep dreaming about charging customers with crazy amount of money they never going to pay.
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Loss...not necessarily. How about profit margin? As soon as you implement a subscription model your profit margin decreases and continues to decrease with every new song/movie you add. Sure you hope to offset that by selling more subscriptions, but at some point that growth is going to level off or become minimal. Then what? In the long run the subscription model's profitability declines. I definitely don't see their business model as flawed. Just different and in my opinion, more profitable.
Regardless, the subscription model is probably always going to be the primary model in this industry unless there's some huge issue that causes a change. And I certainly don't think the movie/music industry will ever embrace a subscription model. Who knows!
ah...I think we've just about beat this into a pulp. I would love to hear some other opinions, but it's time for me to get my drink on and watch the Halloween shit show!
Have a fun and safe Halloween