Right but that means you're not paying full price, since the ads subsidise it. So to modify the OP's point, people are going to need to be prepared to pay more for content and IMO we're already at price saturation point now.
Not necessarily - it's what the market will bear, not the cost itself. This just means the target market will tolerate the ads, not that they are subsidizing the cost of the TV. The extra revenue could just as easily be gravy - especially because this is probably the result of some implicit collusion.
This is my expectation of the market, based on at least the following two points:
1) Video games are sold at full price and still include ads and microtransactions
2) Cable TV was originally ad free (and marketed as such), until they realized they could include ads and make even more money.
I hold the opinion that executives at many of these companies hold the view, "Why only get some of our customer's money when we can get all of it?" (though they probably word it differently, something about recurring revenue and monetizing the existing customer base).
> Cable TV was originally ad free (and marketed as such), until they realized they could include ads and make even more money.
This is why I laugh whenever some new ad-free service launches. People forget history and then are surprised when it repeats itself. Any service that touts itself as "the ad-free version of X," will eventually be stuffed full of ads.
Video games are not sold at full price. 20 years ago the average game price was $50. The price point was universally increased to $60. In Europe the price point has scaled beyond that but in the USA the price has stayed $60. 20 years of inflation has not be accounted for in that price. 20 years of technology improvements leading to increased art team demands, etc.
And to top that off, the frequent mass sale events on popular game distribution channels have led to a culture of people not purchasing games UNLESS they are on sale.
I'm not a fan of the implementations they have selected to make up for that, but it's a bit disingenuous to imply that all money making on top of the $60 cost is profiteering.
> 20 years of inflation has not be accounted for in that price
With all due respect, the inflation argument sounds good but is not based in the reality of the market. Other folks have gone into a lot more detail on why this argument is badly flawed.
But to pick a single argument: if the inflation argument was valid, companies - both AAA and indy - would be unable to make a profit without selling microtransactions. But those games and companies they are turning profits. Even companies selling games with microtransactions are getting record profits when you discount recurring revenue - microtransactions.
Yeah but look at how large the market is, and how much it has grown since then. I'd imagine it's at least 10x the size and it costs virtually nothing to sell to all those additional customers. That's the real reason video game prices haven't kept pace with inflation.
Valve has proven with lots of data that holding deep discount sales actually greatly increases revenue. It took a long time for the industry to fully realize this.
They are not simply trying to cover costs. It's indeed charging what the market will bear. Which I have nothing against, I'm more upset that gamers fork over cash for all these micro-transactions. But that is another topic.
Where does the myth that cable TV was ad free come from? Cable TV was never as free. Cable was first introduced to bring broadcast TV - with ads to places that couldn’t get reception.
Then the “Superstations” like TBS and WGN came to cable. They were local broadcast channels that used satellites to broadcast nationwide to cable companies.
Then came cable TV channels like CNN, ESPN, MTV etc with ads.
Also, there were some Cable TV channels, sometimes bundled with other channels, that explicitly did not have ads (HBO, to name one), just to complicate things further.
> Although cable television was never conceived of as television without commercial interruption…
HBO has always been a premium add on to basic cable. Just like it is today and it still doesn’t have ads.
> But scores of big companies, including General Foods, American Express, Procter & Gamble and Pepsico, are already cable advertisers, along with innumerable used-car dealers and other local businesses that can afford cable's relatively low rates.
> Many cable channels have yet to begin operating, and those now running commercials, such as Ted Turner's 24-hour Cable News Network or U.S.A. Network's ''You'' program for women, carry 30-second and one-minute commercials that are a standard feature of regular television.
Even that doesn't really work. I'm "not paying full price" only because they force upon me hundreds of channels that I don't want, including really pricey ones like every sport. The bullshit I actually watch, I'd be shocked if I'm not paying more than full price for.
The real problem is that content creation/disribution industries are addicted to ridiculous pricing and distribution policies. Nobody can buy what they want, at reasonable terms, we're stuck with them playing stupid games that hurt everyone (likely including themselves).
Strong disagree on this one. I'm pretty sure someone looks at the service that lacks (to their mind) sufficient advertising and is making decent revenue and thinks something like "Wow, a couple (more) ads and this could make a lot more money!" And then (more) ads are added.
Unless there's some dis-incentive we can expect to see more ads in more places. People abandoning the service doesn't seem to be enough, I suspect the longer someone has a particular service the more they become accustomed to it and the more pain it takes to get them to move to another service.
Even if you are paying full price, inevitably the complany will have some brilliant CEO who figures out that not showing ads constantly is leaving money on the table.