Pricing Models for entertainment.
There was a time when movie studios were charging $99 to sell a VHS tape:
“There would typically be a two- to three-month delay between the time a movie was available for rental, and when the movie could be purchased by the consumer. In reality, the video was available, but priced for rental shops and film enthusiasts who wanted to own a copy of the film at the earliest opportunity. The pricing was between $70 and $130” [wikipedia]
The era under discussion would be 1985-1995 – after rental became big business, but prior to the introduction of DVD in 1996. So that “$70” in 1995 would be equal to $105 in 2012; “$70” in 1985 is closer to $145. “$130” for the rental-only version would be $200 or more in today’s dollars.
[inflation calculator at westegg.com]
How dare the movie studios charge a rental place $100 or $200 for a movie that has already had a theatrical release when we all know the video tape only costs $1.80 to manufacture! The gall!
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Of course the consumer didn’t see that price: the investment was borne by the rental place. They did calculations that over the lifetime of the tape, they would be able to rent it out 100 times or more before the tape died; and obviously not every tape was purchased at a premium. And Eventually: the number of customers grew, the market matured, consumers became more informed and more discerning, and actual demand for titles began to set the price.
…Which is why DVD sets for Game of Thrones cost [approximately] two arms, a leg, and the still warm corpse of a Stark. DVDs changed the game anyway: By 1996, Blockbuster was in a position to dictate terms to the studios, rather than the other way around. Additionally, by the late 1990s the movie and TV studios had already figured out that the home market was in many ways more valuable than the first-run showings, and release delays and exclusivity windows shrank alongside the prices. And that was fine, too, for a while [I look back on it as a golden age of sorts for DVD] until online streaming and blu-ray further clouded the picture and led to the current situation (i.e. “a mess”).
There are series that are only streaming digitally where I’d actually prefer to have a DVD set. There are a couple (anime licensed expired) where there used to be a DVD but it’s no longer being manufactured and isn’t online anywhere* and so good luck with ebay, mate.
For those who aren’t anime fans, and who have no sympathy — indeed, no context — I have two words for you: Disney Vault.
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Pricing nonsense is not new, and if folks didn’t raise a royal fit in 1988 over $100 VHS tapes I don’t see why a library (that is to say: rental-only) copy of an ebook at $89 is a deal breaker. Additionally, if a publisher wants to charge $24.99 for an ebook — as many note, all but free to manufacture, just like those $1.80 cassettes and 17¢ plastic discs with a bit of foil in ‘em — if that particular ebook is brand new and hasn’t earned back it’s advance, editorial overhead, marketing budget, with a pinch of profit besides than there should be no more complaint than the $11.50 we have to pay for a one-time showing of a movie that is eventually going to be in the $4.99 bin.
It’s all business. Movies have costs past the $2,000 or so it takes to make a print and ship it to your local cineplex. We all know this, and happily pay the $11.50 plus $6 for a popcorn to see a ‘first run’ movie in theaters.
Books have costs, too. Sure, a book doesn’t have a $200 million production budget, but a book is much more likely to just sell 5000 copies – not 11 million tickets. And just like movie studios have hits and flops, publishers have bestsellers and… everything else. Just because the scale is smaller doesn’t make the business easier, or even substantially different.
And just like the home video rental business has changed—radically—over the past 25 years, the ebook business will eventually become relatively sane (more or less) given time as well.
This post is technically a link, that (under the old program) I would have tweeted without commentary:
“For years we’ve discussed the ridiculousness of ebook pricing, where some publishers seem to think that sky high prices for ebooks (often higher than physical copies) makes sense, despite the lack of printing, packaging, shipping and inventory costs. And, of course, we won’t even get into the question of the price fixing debacle”
The Good And Bad In Chaotic eBook Pricing : http://www.epublishabook.com/2013/10/25/chaotic-ebook-pricing/ – via the ebookPorn tumblr.
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* footnote: yes, I know "unavailable anywhere" is a relative term, given the options available to those both morally flexible and technically savvy, and let's leave it at that.
