tag:blogger.com,1999:blog-19034584.post4296555944932344528..comments2023-12-30T19:09:57.035-08:00Comments on A Curious Life: One Million Screwdrivers: Ripple Effects (Part 3 of 5)Ross Prudenhttp://www.blogger.com/profile/14674352553567302954noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-19034584.post-43077915958775258842010-03-24T21:41:48.287-07:002010-03-24T21:41:48.287-07:00Funny you should post this today...
I've been...Funny you should post this today...<br /><br />I've been looking into virtual goods - trying to get my head around why there is a multibillion industry that involves people paying real dollars for something that isn't 'real.' <br /><br />Why would someone pay something for nothing?<br /><br />Anyway, read some interesting stuff this morning <br />http://virtual-economy.org/<br />http://info.tse.fi/julkaisut/vk/Ae11_2009.pdf <br /><br />And, reading this post now - it's all a lot clearer: <br /><br />* 'Value' is completely in the mind of the beholder. Different people have different notions of 'Value for Money': a person purchasing a virtual chair for their virtual apartment values that more than the money spent on it, while someone (like me!) values the money more than the virtual item.<br /><br />* The perceived 'Value' of an item shifts over time. E.g. a dvd rental has one price when it is newly released, and another price once it goes to 'weekly'... even though it is the same dvd. The reverse price change can also occur - when concert tickets sell out, scalpers resell for a huge profit. <br /><br />* Money itself is a 'virtual' currency: the value of one unit varies from country to country, goes up and down depending on the health of the 'economy', interest rates, stocks, shares, gold etc. <br /><br />* While filmmakers have limited ability to minimise cost of production, we can ensure that what we create is of enough Value to our audience that they will pay above the cost to us - via one strategy or another.<br /><br />This means we need to better understand what exactly it is audiences value, and our pricing strategies needs to reflect customer notion of 'value' over time.<br /><br />For an unknown 'high risk' indie film, this may well mean having a low entry point initially, till positive word of mouth increases the perceived value of the film, then the price can go up.<br /><br />In a digital world where the file itself is easily copied, it also means looking at additional revenue streams that are not so easily replicated. <br /><br />Mind you, it's also important to note that the reason why the screwdrivers were considered a bargain when sold for 1 cent was in part because there was competition selling the same product for 50c.<br /><br />If we drop our price for first entry, we need to make sure consumers realise this is a 'discount' price, so that they perceive the value of the deal.<br /><br />Todd Sattersten wrote a great free ebook that looks at pricing strategies for the 21st century - well worth the read. http://toddsattersten.com/2010/02/fixed-to-flexible---the-ebook.htmlLucihttps://www.blogger.com/profile/15269188988389385008noreply@blogger.com