On the face of it this is just a piece about the gaming industry, though a fascinating one. In fact this article raises issues for all content industries from games, to books, to newspapers, magazines and music.
It covers the gamut, the explosion of content, the role of market makers (in this case Apple – though to a lesser mentioned extent, Google), the use of price as a lever and the challenges of making money in markets that have become so large, diverse and saturated.
I’m reminded of two realities most forcefully when reading it, firstly that while digital unleashes greater freedom to create and make content of all kinds available, thus empowering the creator relative to the middlemen and women of the previous era, it also (in its current guise by power of platform) shackles them to the power of another middle-person (for books, mostly Amazon) AND makes a sustainable career even less likely because of the huge increase of content such freedom unleashes. Secondly, I am reminded of just how little information is publicly available to those looking at the book trade. Consider the information in this article about the nature of games sales in the iOS store and ponder how different our conversations might be about ebooks if these facts were more openly shared (some notable exceptions on that front would be Smashwords who share quite a lot of data).
Getting people to play your game in a market of 150,000 alternatives requires a different kind of marketing. For example, if the user can choose to pay $0.99 for your app, or pay zero for another app that’s probably just as fun, they’ll pick the free one. The result follows: 90% of apps are free in 2013 when weighted by monthly average users. And when you look only at those apps that use an experiment/test/data-driven approach for their pricing, you see a strong upward trend in more free apps. So the pricing experiments that these developers are running (you know, actual flipping research, not just speculating baselessly in an HN comment) are telling them it’s better to go free.
via How in-app purchase is not really destroying the games industry | Sealed Abstract.
It has been clear for some time that probably only full-scale retailers have the capacity to respond to Amazon, Google, Apple and other digital giants. They have the advantages of scale, access to capital, direct customer interaction and customer inertia working in their favour.
Of course, those advantages are threatened by online retailers like Amazon and by the shift to digital consumption of media. It makes sense then that really forward-looking retailers will attempt to move into the digital distribution and retail space. Many of them have been offering online grocery shopping effectively for some time, long before Amazon or other newer entrants. Tesco has been making what look like smart moves in digital media for a while. It will be intriguing to see if this forthcoming tablet play works.
Success, however, cannot be measured by units sold alone. A good sign of it working would be of the company sells lots of tablets AND signs lots of people up to its digital content services. At the kind of price point the articles on the tablet are talking about, content sales and customer acquisition for the digital services are the goal in the short and medium term.
The question that arises for me is what’s the longer term play for Tesco? How can it build on success in the UK (if it materializes) and can it compete with the giants even if it does succeed in the UK. The costs of such competition can be quite hefty, as B&N has learnt to its cost:
Tesco might be able to hit the £99 price using a cashback-style promotion, Wood suggests: “I can see Tesco using substantial discounts on other services such as bundled media from Blinkbox, or vouchers for discounts on petrol or groceries through its ClubCard loyalty scheme.”
The tablet would take on competitors from the likes of Apple, Google and Amazon, and will be tailored to online shopping and video viewing – both areas where Tesco is looking to capitalise on its position.
via Tesco tablet expected on 23 September – and may be very low-priced | Technology | The Guardian.
Lurking in a seemingly not related post about how the iconic Apple product is slowly becoming less important to Apple, is a great few lines about the nature of the music business and, more generally, the content business at a meta level:
One could argue that trying to charge a little extra and make more profit is more trouble than it’s worth for Google or Apple (or even profit-hungry Amazon) – better to offer it at cost or thereabouts to enhance the value of the broader platform, which is where the real money comes from (advertising and devices respectively).
The same thing is happening in books and video – content is a condition of entry to the platform game that you provide at cost. This obviously makes life pretty tough for startups – it’s hard to try to build your own ebook store or download-to-own music store right now when any device your customers might use probably already has an at-cost service built-in. The one place this might be different is in video, since in that business it is actually possible to have unique content – but of course this is very expensive.
via iPod eclipse — Benedict Evans.
These issues are of concern to everyone in the content business, from authors to publishers. That doesn’t mean we’ll be impacted equally!
Interesting and smart stuff:
In the same way that making automobiles smartphone-compatible has proven to be vastly superior (and more cost-effective) than reinventing smartphone functionality and building it into every car’s dashboard, the television set paradigm has just shifted. Why pay extra for expensive technology built into your screen when you can bring your own bell and whistle to any screen you want?
That’s exactly what Google is saying with Chromecast.
While an arms race among television makers has been mustering over the development of “smart TV” that lets people use the Internet on the biggest screen in the house, Chromecast is like Dropbox for TV. Everywhere you go, you can have your stuff, on any screen, doesn’t matter if it’s “smart”, dumb, big, or small. And you can use your frigging phone or mouse instead of a remote. I think it’s one of the smartest moves the company has made in some time.
via Like Dropbox For TV, Chromecast Changes The Game | LinkedIn.
Really nice post from Philip Jones over on FutureBook:
Yet I can’t help feel that the BBC is being unfairly pilloried, partly because it overpaid, and partly because it was, well, the BBC, and therefore unable to complete its vision. We do not see the financial performance of LP, but it won’t be pretty given what the write-down says about its costs, and the decline in the travel-book market, even though LP remains the market leader. But we do know that it was making the transition to digital, through its e-books, apps, and most importantly via its website. When it was bought by the BBC LonelyPlanet.com said it received 4.3 million visitors a month, that figure has since trebled.
Most crucially, though we may baulk at how it played out, the vision of putting the BBC and LP under one virtual roof still looks compelling. Combining the BBC’s digital know-how, its wealth of content, historical and up-to-date reports from across the globe, with Lonely Planet’s brand, its publishing nous and its reach, still looks unbeatable. The entity could have offered a true unbiased constantly updated window on the world, powered by trusted content and embellished by social interaction from the many travellers and observers attracted to such a portal. Were Google to pull off something similar, we would all be applauding.
via The loneliness of the overvalued publisher | FutureBook.