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

1. 'How to make money and thrive in an
environment where Free is the normal
price
Nicholas Lovell
GAMESbrief
Futurebook
December 5th, 2011

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

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4. WHAT IS PUBLISHING?

5. Mythbuster: Publishing is about content
Books 10% 90%
Newspapers 15% 85%
Games $50m $200m
• Publishers add value through DISTRIBUTION

6. Publishers add value used to add value
through distribution

7. Publishers add value used to add value
through distribution

8. Publishers add value used to add value
through distribution

9. The Internet has made distribution
easy

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. Show me the money

12. The price/demand curve
• In an era of physical
PRICE
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. Now we let users set the price
• Hypothesis: Allow users to choose how
PRICE
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. WRONG!

15. Allowing users to choose how little to pay
is not the secret
• We all knew that 95% of users played for
PRICE 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. The Nine Inch Nails Example
Ghosts I – IV Ultra Deluxe Edition: $300
PRICE
Ghosts I – IV Deluxe Edition: $75
Ghosts I – IV physical: $10
Ghosts I – IV digital: $5
Ghosts I: $0
Demand

17. The conclusion

18. One-size-fits-all pricing is dead
PRICE Revenue
opportunity
Marketing opportunity
Demand

19. Thank you
nicholas@gamesbrief.com
Follow my blog
www.gamesbrief.com
Buy my books