How to make money and thrive in anenvironment where Free is the normal               price               Nicholas Lovell  ...
Nicholas Lovell, GAMESbrief             • Author, How to Publish a Game             • Director, GAMESbrief             • C...
Subscribe to the blog
WHAT IS PUBLISHING?
Mythbuster: Publishing is about content  Books               10%                  90%Newspapers            15%            ...
Publishers add value used to add valuethrough distribution
Publishers add value used to add valuethrough distribution
Publishers add value used to add valuethrough distribution
The Internet has made distribution               easy
Great news for content creators• Content distributors, not so much• Ballpark, I estimate 50% of people in content distribu...
Show me the money
The price/demand curve                                    • In an era of physicalPRICE                                    ...
Now we let users set the price              • Hypothesis: Allow users to choose howPRICE               much they spend on ...
WRONG!
Allowing users to choose how little to payis not the secret                       • We all knew that 95% of users played f...
The Nine Inch Nails Example        Ghosts I – IV Ultra Deluxe Edition: $300PRICE                      Ghosts I – IV Deluxe...
The conclusion
One-size-fits-all pricing is deadPRICE   Revenue        opportunity                      Marketing opportunity            ...
Thank younicholas@gamesbrief.com    Follow my blog  www.gamesbrief.com     Buy my books
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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

Published in: Business, Technology
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Futurebook: How to make money and thrive in an environment where Free is the normal price

  1. 1. How to make money and thrive in anenvironment where Free is the normal price Nicholas Lovell GAMESbrief Futurebook December 5th, 2011
  2. 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. 3. Subscribe to the blog
  4. 4. WHAT IS PUBLISHING?
  5. 5. Mythbuster: Publishing is about content Books 10% 90%Newspapers 15% 85% Games $50m $200m • Publishers add value through DISTRIBUTION
  6. 6. Publishers add value used to add valuethrough distribution
  7. 7. Publishers add value used to add valuethrough distribution
  8. 8. Publishers add value used to add valuethrough distribution
  9. 9. The Internet has made distribution easy
  10. 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. 11. Show me the money
  12. 12. The price/demand curve • In an era of physicalPRICE 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. 13. Now we let users set the price • Hypothesis: Allow users to choose howPRICE 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. 14. WRONG!
  15. 15. Allowing users to choose how little to payis not the secret • We all knew that 95% of users played forPRICE 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. 16. The Nine Inch Nails Example Ghosts I – IV Ultra Deluxe Edition: $300PRICE Ghosts I – IV Deluxe Edition: $75 Ghosts I – IV physical: $10 Ghosts I – IV digital: $5 Ghosts I: $0 Demand
  17. 17. The conclusion
  18. 18. One-size-fits-all pricing is deadPRICE Revenue opportunity Marketing opportunity Demand
  19. 19. Thank younicholas@gamesbrief.com Follow my blog www.gamesbrief.com Buy my books

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