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> a big budget movie has to make back its gigantic capital investment, and each unit of consumption has to pay its share. I don't dispute that, but a the marginal cost of a digital copy is electricity + bandwidth, where as a physical copy costs materials, manufacturing labor, shipping and distribution costs, and because you can't print a physical DVD on-demand, you have to cover unsold inventory, which requires an additional capital investment which you may potentially not recoup. Apple already sells new release movies via iTunes (I pulled the $20 number from the Edge of Tomorrow listing), but the problem is that the pricing for digital movies hasn't kept pace with consumer expectations. We buy our software and music for pennies on the dollar compared to what we used to; paying 1996 prices for digital movies isn't something anyone is in a rush to do. Valve has found that game prices are highly elastic - you can move them all over the place and still retain roughly the same gross revenue, because you're hitting multiple brackets of consumers. Add in bonus sales that call attention to a title, and you can put revenues through the roof. If Google Play or iTunes regularly ran weekly sales on fresh content where I could get a copy of some movie for X% off this week only, I would be constantly engaged! Judging by Steam's success, the studios would see tremendously increased sales and tremendously reduced piracy. Instead, I go there only as a last resort. The distribution sucks, and the pricing sucks. It's not that I'm not willing to pay for movies - I am more than willing to - but if you ask me to pay 200% of my monthly Netflix expenditure to watch a single movie, I'm going to laugh at you and go find something to watch on Netflix. |
At release: Movies are 12 bucks a person a view at the theatre. Games cost 60 bucks.
After a while: You can rent a movie for 4 bucks or buy it for 15 bucks on DVD. Games cost 30 bucks.
Year + later: It's on HBO, cable, network TV or netflix. Games cost 5-10 bucks ON SALE!
Maybe movies could be sold for super cheap after a year, but for the most part there isn't much interest in the movie.