Priced to Die

“Why We Should Fear Ourselves More Than Pirates”

So now that I’m seeing reports of SOPA and PIPA having been defeated by overwhelming negative opinion many are breathing sighs of relief. And others are cursing violently (but generally silently).

Among game developers and writers, my two primary areas of interaction, opinions are mixed.

Many are worried about piracy eating into their revenues. For freelance writers and indie game developers it does not take a lot of piracy to put a stranglehold on their revenue stream.

Still I think there’s a larger concern than pirates for content creators.

Why We Should Fear The $0.99 App and Novel

One interesting thing I’ve noticed since promoting my writing on various forums is the almost insatiable demand for novels that readers seem to have. While at first this is incredibly encouraging I quickly realized that for many this demand was paired with the reader’s demanding incredibly low prices, or even free work.

I’m not talking about people who think eBooks should be cheaper than print books. I’m in that camp. The prices on some titles are ridiculous. I’m talking about what appears to be a large number of vocal consumers who will not spend more than $0.99 for a novel or game.

Indie writers and developers have been praising the App store or Kindle self publishing because these tools have given them more exposure than they could have gotten a few years ago. This is a good thing in my opinion.

What’s not good is that to get consumer attention there seems to be a mad rush to have low prices and often free content. In the short term this seems to benefit authors, game developers, readers and game players.

But it will not last.

Why Not?

I am asked occasionally why I do not start up my own indie game development firm. I have over ten years of experience on AAA titles as well as experience on smaller projects. I have art, design, sound and programming contacts.

But it is incredibly unlikely that I would ever start an indie firm up because I doubt, unless we lucked out and created a blockbuster, that it would ever be profitable. And that’s gambling; I don’t gamble.

For every major and moderate success with the Apple’s App store I suspect there are thousand of complete failures. And not all of these failures are crap titles, they are high quality goods that are not being noticed and cannot be noticed unless priced too low to be profitable.

To be blunt I doubt I would be able to pay my employees the money they would deserve.

Likewise I’m skeptical how many self publishing successes we are going to see in the realm of self publishing.

What’s Gonna Happen?

App developers and those self publishing for low prices are creating an expectation in the consumer that these prices reflect the effort put into creating the content. As the years pass this expectation will become even more pronounced.

For both books and games I suspect we will start seeing more copying and less originality. Both authors and game developers, in an attempt to be profitable at such low price points, will try to minimize risk. To do this they will copy tried and trued gameplay and narrative and flavor it just enough that it is not a blatant rip off.

If I were creating a title entirely on my own and with no expectation of making money I might risk being original. If I had a team depending on success to feed their families I’d copy an existing design and try to improve on it.

Of course nobody knows what will really happen but I think content creators of the future are going to have to find other ways to subsidize their product. This might mean advertising or blogging revenue or something more creative.

I’m considering carving my next novel in the walls of a cave and charging people admission to come and read it.


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  • James Paten

    What I am surprised we don’t see more of in the marketplace is a Pay-By-Chapter/Section. While a full novel’s worth of work should never be priced for under a dollar, consumers fear putting in too much to wind up paying for a dud story.

    If a reader can read the first, say, four chapters of a book for $0.79, and determine if they are hooked or not, they can pay for the next section of content, and so forth.

    In fact, this could help the author determine which storylines have the greatest potential for success without having to put 100% of the effort in. There runs the risk of writing yourself into a corner, of course, but with some forethought and discipline, I don’t know why that model couldn’t succeed in either books or gaming.

  • http://blog.brentknowles.com Brent Knowles

    I’m curious if anybody has tried this. The general consensus among writers I’ve talked to is that series work — a low price first book leads to readers paying for more expensive sequel.
    So technically the idea of serializing, as you suggest, a single novel, could work. I have seen this approach used with App store games so far; don’t know if it is succeeding.

  • Robert

    I’m not sure that theory is perfectly suited to the writing industry. It’s obviously not possible to mass produce novels, and there is no market for ‘quality’ in the sense that people recognize it and pay a premium it. We all have preferred authors, but I could not say that mine were “premium”. I also could not be tempted to buy a “non premium” author for -70% discount. I also don’t think the market has yet to undergo further segmentation on a wide scale.

    The first problem at the heart of low prices/low innovation I think is the busy, noisy, 24/7 world we live in, that has meant that most consumers prefer quick, passive, popular entertainment – or if they do buy books, they need to be at a price that won’t make them feel bad about shelving them “for later” when they “have time”.

    The second issue is Free Sample’ Syndrome. This is affecting everyone. Students are under pressure to work as unpaid interns for endless years. Financial advisers have to produce more “evaluation” pieces (ie free advice) before getting one “lucrative” (ie normally paid) assignment, authors have to keep producing free short stories. This ties in to the whole economic slowdown situation we’re in, I think.

    The third issue is piracy. Although it is as morally reprehensible to steal physical goods as it is to steal IP, somehow most people think that everything which can be digitized should be free. Paying $20 for something which can simply be taken from rapidshare can make an honest person feel foolish.

    I agree with Brent – the current low prices mean that you need huge volume to make a sure profit. Huge volume = tried and tested. Until we get out of the economic “slowdown” and people are willing to spend on new things they might not like (as opposed to having a tight budget which must go on things they know will be OK) this will persist. Either that or you need a huge marketing monster to tell people that they *will* like this new innovation you’re testing…

  • http://blog.brentknowles.com Brent Knowles

    Very good points Robert. Thanks.
    The piracy point is especially interesting, I had not directly thought of this as a pressure point but I see that it very might be.  If something is cheap enough then the incentive to pirate it might be less than if it is very expensive.
    So maybe the pirates are a problem here too.
    – Brent

  • Some guy named Dave

    $0.99 might be viable for iOS, but it’s completely unreasonable on Android and Windows Phone 7.  Check out some articles by/about Elbert Perez. He is a reasonably successful independent developer of Windows Phone 7 games. All of his games are free and comparable in quality to what you or I can make. He normally publishes a game every 6-8 weeks and of the $60K he made last year, most of it was generated by 2 somewhat successful titles (i.e. cracked the top 10 list). He is has argued convincingly (to me at least) that free games are the way to go when it comes to mobile – all of his income is generated from ad revenue. His business strategy seems the most realistic to me and the one that I am most inclined to emulate. 

  • http://blog.brentknowles.com Brent Knowles

    Thanks for the comment. I’ll go and look for those articles.

    That’s impressive that he made 60K! But as you mentioned he had to crack
    the top 10, twice. That will become more and more difficult to do as more and
    more content is created. This gets to my gambling point earlier… do
    you throw all your time, effort and money at the *chance* of hitting a
    top 10 list to get the exposure you need for advertising views?

    I’d be curious if there are middle/low-end developers (those who never hit the top or featured lists) that are making a living a from ad revenue?

    While it makes sense that ad revenue would be a way for games to supplement (or replace) earnings I’m not sure if a similar model could work for selling novels though… at least not in a pleasant way.

    Thanks again! Interesting discussion.

  • Ted Chen

    At the time, I was thinking journalism and technical trade publications.  Journalism has the WSJ, NYTimes, and Economist.  Each of which have erected pretty high paywalls.  None of them are cheap compared to the norm.  ACM operates it own portal, as does Wiley & Sons.  Safari Books Online is a partnership between several publishers.

    But these are like I say, niche.  They’re operable because they require a high fixed cost (in house analysts, conferences, expertise) that forms its own barrier of entry.  Of course, you can always wait for Popular Science to distill the content down later for much cheaper, but there is a loss in translation and timeliness.

    Novels are different.  And for that, I know of no cure.