The Loss Of Loss Leaders?

Remember "Loss Leaders" in the world of tech and gizmos?  Have CD's and DVD's that are marked down insanely low, hope you sell, and get people to buy other stuff.  It's a historical practice, and probably one that doesn't get enough attention.

This was something Best Buy and some electronic stories try or tried because they want you to buy expensive stuff. In fact, last time I headed to a Best Buy, I thought about the fact I see a lot less CD's and DVD's there.*  Sure there were some, but not many, and they seemed to be cheap stuff, recent stuff, and expensive sets.  I'm guessing the latter is the only guaranteed profit maker.

Loss leaders aren't working like they used to.

Come to think of it, the answer seems pretty obvious: The Internet and The Economy.

First let's address the economy, which sucks and means we want to buy less stuff, especially stuff that we really don't need.  Sure it's marked down, but if we don't really need it anyway, then why buy it in tough times?  The economy clearly didn't help.

But then there's the Internet.

The obvious way the Internet kills off Loss Leaders is that simply you can get their contents online through Netflix, discounted sellers, used copies, or simple piracy.  Why buy them at a store when you can do it cheaper or free?

But there's other reasons.  Previews of things seen on the internet, reviews, and so forth can make you more picky and better informed.  You're used to looking for, well, crap, used to researching.  You know what you want, you seek it, and you're less likely to be tempted at a store.

Put it all together, and there's a loss of Loss Leaders.  We don't want to buy them, we don't need them.

I have to wonder how many companies have to struggle with this loss . . .

Steven Savage

 

* In my defense, I now usually go to Fry's.

 

Quick ACTA UPDATE

Germany and Latvia delay ratification of ACTA. This may increase the ability for ACTA to also die slowly. Note there's a lot of resistance in the Slavic countries.

TAKEAWAYS:

  • This thing is a long way from done, or approved, and with protests gearing up I don't think it's going to happen.
  • Also, national issues and feelings may be a big boundary ("why should I do what THAT country says.").
  • Unifited world protests oper these bills is a definite possibility.  It could lead to some strange alliances and interesting political repercussions.

Steven Savage

Doublefine Raises Triple Their Goal With Kickstarter

Double Fine, Tim Schafer use Kickstarter to raise $1.3 million for a new game. Yes, Million. Game developers take note – though obviously we're not all Tim Schafer, this may be a viable future model.

TAKEAWAYS:

  • $1.3 million. Damn.
  • This is money used for the game, not counting profits from the game. Though there will be some money lost to swag, preorder issues, and others, it's still quite an impressive achievement. Or in short, more money to be made.
  • Yes, this may be hard to apply to people starting out, but if you worked on a big game and got enough rep, or built up, Kickstarter may be a viable way to raise money.
  • Everyone is watching this.

Steven Savage