We Need Better Pricing for Movies and Television

What Is Video Content Really Worth?

Today there is more premium content available instantly than a human being could watch in several lifetimes. Yet, beyond all-you-can-eat subscriptions, little has been done to innovate how that content is actually priced and sold. The experience you can expect from all the major retailers selling digital video content is essentially identical. Browse a list of thumbnails. Watch a trailer. Rent for one price, buy for another. Repeat. There is little sense of curation beyond the front page, and despite the increasing number of customers, almost no sense of a communal experience.

Beyond a few cookie-cutter promotions like 99¢ rentals, there is a dearth of creativity or effort being put into driving transactional sales of video content. Rather, more effort seems to be made to preserve old models, behavior, and artificially high prices (see: UltraViolet). Beyond the actual delivery mechanism (streaming), we’re essentially seeing the same experience popularized by Blockbuster in the 1980s. Is this really the best we can do? Between SVOD and piracy there are simply too many alternatives available to fans to pretend it’s that simple to assume everything should be priced uniformly.

There are a lot of great movies and television shows available on the Internet. There are also a lot of…not so great ones. Why are they priced the same? Why am I meant to believe that they are all of equal value when I have so many reasons not to purchase or rent?

“With social media, you can no longer hide the goods.”
— Michael Lynton, CEO, Sony Pictures Entertainment

What Is A Bad Movie Worth?
I know — or at least I expect — “After Earth” to be a bad movie. That’s entirely unfair since I haven’t seen it, but everything I read and see in my life has already told me it’s bad. So why should I pay more to rent than “Elysium”, one of the most acclaimed movies of last year? Is it really worth more just because it’s a movie that happened to come out recently?

“After Earth” and “Elysium” prices on iTunes.

There should not be a gap between perceived value of content and price.

Enter SVOD

Over this past holiday break, my wife and I watched a lot (like, a lot) of “The Good Wife” on Amazon Prime. Between both Rokus in our apartment, and the Amazon Instant Video iPad app, we easily dispatched with the first two seasons and are well on our way to catching up. Needless to say, we like this show. Each time we open an episode on our Roku, we’re presented with the following menu:

“The Good Wife” on Roku

Why would I pay for an episode or a full season? So I can “always” have access or sync it to my device? Is that really the best incentive? My remote is in my hand and I’m ready to watch. If Amazon knows I’m addicted to this show, which they no doubt do, they could take advantage of this by getting me to buy the current or next season at a deep discount, or by incentivizing me to bundle it with another show I’ve been watching. This is done with other types of products all the time. I have a relationship with this show, and a valuable opportunity to “level up” that relationship is being missed here.

Games Lead The Way — Again.

This is not a new idea. Lots of other content businesses take advantage of elastic pricing, some in a drastic way. The most compelling example is video games. If you’ve ever bought games from Steam or The Humble Bundle, you’ll know what I’m talking about.

Holiday Sale on Steam.

Dozens of games are made available at tremendous discounts — often as high as 75% — for a limited time. Many games are fairly new. Valve, who runs Steam, knows when the sales curve of a game has tapered off to the extent where a sale might beneficial. Steam lets customers set a Wishlist so they can keep tabs on when the games go on sale. It’s become so frequent that many Steam users only wait for sales to top off on games. We should look at video content the same way. I would happily buy digital versions of movies if I knew I could keep them forever and if the price was right. Myself and millions of other fans already did this ten years ago with DVDs. Just don’t pretend we’re still willing to pay $20 for them.

Transaction Vs. Relationship

At the root of this is how publishers view their relationship with their fans. The old way of thinking is to treat the transaction as the conclusion of the relationship. Once a sale has occurred, there’s nothing left to do. But if we’ve learned anything from the current age of abundance and how audiences are behaving online, its that the act of consuming is actually the beginning of the relationship. Publishers need to nurture and grow that relationship in order to succeed. Not doing so will likely lead to a further commoditization of movies and television online, and possibly worse, fans doing themselves, without ever paying at all.

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