Futurebook: How to make money and thrive in an environment where Free is the normal price
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The digital tsunami is about to engulf books. Publishers will add less value in the future as the Internet makes distributing content that its price will trend to zero. Successful publishers and content creators will embrace the power of free AND use the power of the Internet to crete profitable, one-to-one relationships with their biggest fans
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Futurebook: How to make money and thrive in an environment where Free is the normal price
- 1. 'How to make money and thrive in an environment where Free is the normal price Nicholas Lovell GAMESbrief Futurebook December 5th, 2011
- 2. Nicholas Lovell, GAMESbrief • Author, How to Publish a Game • Director, GAMESbrief • Clients include Atari, Channel 4, Channelflip, Firefly, IPC, nDreams, Rebellion and Square Enix • @nicholaslovell / @gamesbrief
- 3. Subscribe to the blog
- 5. Mythbuster: Publishing is about content Books 10% 90% Newspapers 15% 85% Games $50m $200m • Publishers add value through DISTRIBUTION
- 6. Publishers add value used to add value through distribution
- 7. Publishers add value used to add value through distribution
- 8. Publishers add value used to add value through distribution
- 9. The Internet has made distribution easy
- 10. Great news for content creators • Content distributors, not so much • Ballpark, I estimate 50% of people in content distribution will be out of work over the next decade • BUT many more content creators will be able to make a living from producing and distributing their own content
- 11. Show me the money
- 12. The price/demand curve • In an era of physical PRICE distribution, you need to set a single price • For games, around $40 “It’s great value, I’d have paid much more” “That’s too expensive for me” Demand
- 13. Now we let users set the price • Hypothesis: Allow users to choose how PRICE much they spend on your product, and your revenues will go up DDO revenues up 500% DCUO revenues up 700% $ 3$ $ 5$ 5$ $ $10 MMO 1 $ 5 $3 $ $ $ subscription 3 3 3 1 5 Demand
- 14. WRONG!
- 15. Allowing users to choose how little to pay is not the secret • We all knew that 95% of users played for PRICE free • We now know that 80-90% of revenues come from 0.5% of users Spending $50 - $10,000 or more Demand Paying: 5% Free: 95% 80-90% of revenue from 0.5% of users
- 16. The Nine Inch Nails Example Ghosts I – IV Ultra Deluxe Edition: $300 PRICE Ghosts I – IV Deluxe Edition: $75 Ghosts I – IV physical: $10 Ghosts I – IV digital: $5 Ghosts I: $0 Demand
- 17. The conclusion
- 18. One-size-fits-all pricing is dead PRICE Revenue opportunity Marketing opportunity Demand
- 19. Thank you nicholas@gamesbrief.com Follow my blog www.gamesbrief.com Buy my books