05.30.08
iTunes Dynamic Pricing – It’s a Good Thing
There’s been some speculation about whether or not Apple will make some video content available on iTunes on a dynamic pricing model or not. Personally, I think it’s a good idea.
Now I know what you’re thinking – “Hey Bob, WTF – doesn’t that mean we’ll be paying more for all that gooey video goodness?” Yes and no.
Think about it for a second – if everything was $1.99 per download – then the studios would say “it’s not enough” and would limit the content. On the flip side, if the studios thought $4.99 was a better price, say, for an episode of The Sopranos then people could vote with their feet and just not buy it. Once the numbers trailed off – the studio could then lower the price back to $2.99 and see what happens.
Sure, there will be some pissed off people who bought the $4.99 episode when the price goes down to $2.99 – but if it was worth $4.99 when you downloaded it – it’s probably actually worth $4.99 to you now.
Just have a look at the iPhone. It came out at a higher price, and then they lowered the price (much to the chagrin of those early adopters) to boost demand. And – it WORKED.
So you may not be enough of a fan of a show to fork over $2.99 for an episode, but what if they dropped the price (for a limited time – or for a couple of pilot episodes) to $0.49? Would you be interested then? Maybe.
And that’s good for everyone. You get a “deal” on a show that you’ve never seen – or one that sounds interesting that you would have never really watched – and the studios then have to “earn” your viewership of future episodes by keeping the quality of the show high.
I’ll admit – there is still something sort of FUD factor when an episode of 24 goes for $1.99 one day, then $2.14 the next and $1.61 the next. But the point is – as a series becomes more popular, then the studios have a bigger upside and they can test market prices – or aggressively try to stimulate demand for a new series or movie – by playing with the prices.
In the end, that whole market-driven thing is good for everyone.
