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David Poland

By David Poland poland@moviecitynews.com

Economies Of Scale

So, Conde Nast is going to turn its magazines, starting with next month’s GQ, into iPhone apps.
Great idea.
But then you see how these guys (“morons” seems so harsh) are pricing it. $2.99… per issue.
And now you understand, in a nutshell, why print media is dying. They just don’t seem to get it.
For $9.99 a season, I got incredible iPhone access for an entire season of MLB. Admittedly, the offered app went from $3.99 a season for simple updates to $9.99 for updates plus radio from every market for every game to offering a few free live streaming TV games on the phone each day to one free game a day and 99

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3 Responses to “Economies Of Scale”

  1. Foamy Squirrel says:

    Sigh.
    No. Content is NOT king. “Content” doesn’t explain why Transformers 2 is the #1 box office hit this year, why “Beverly Hills Chihuahua” does $100mil domestic while other movies languish, why LVMH can get people to pay thousands of dollars for a handbag or why McDonalds can sell millions of what are, to be honest, really shitty burgers.
    These are not anomalies. They happen every single day, and yet people – ESPECIALLY in the media industry – act as if all they need to do is get the product right and they will be a success. Bullshit.
    Consumers do not pay for a product or service, they pay for a package of values and attributes that are attached to a product or service. Even in traditional “commodities” such as coal there are ways to differentiate – power stations want coal of a certain quantity, delivered when they want, delivered how they want. You can have the best quality coal at the cheapest price, but if a competitor can deliver it this afternoon and you can’t guess who they’re going to choose?
    GQ is not just articles. Having copies of GQ on your desk says something different about you than having copies of Vogue or Details. A Vogue iPhone app by itself is no guarantee to be the hottest seller – a Vogue iPhone app that tells other users that this person has a Vogue subscription? THAT’S another story.
    GQ, like many other print companies, will go under if they think they are competing on content – you can get pretty much the same articles, if not exactly the same, for free on the internet. Their only hope is to deliver a user experience that becomes the “essence” of GQ. This is a lesson Apple learned long ago – they dominate not because they have the best technology (there are handhelds that have more features, better processors, better screens, better everything than iPhone), they dominate because they sell “Apple”. And that’s a valuable thing these days.

  2. David Poland says:

    Foamy… you’re right in detail… and dead wrong on a broad level.
    What makes iPhone, for instance, unassailable, is that it was first and that they built the apps store quick into a business with 10s of 1000s of easy to download and use apps, free and paid. None of the others come close to offering that.
    Yes, “Apple” is sexy. But it also dominates in delivering complexity that seems easy to use like no one else.
    As for magazines, yes, there is something about having mags out. But as we now know with DVD, in the end, people spend for function, not form. Only children remain as committed to the ego of image.
    There is no user experience that is the “essence of GQ.” The delivery system just isn’t that sophisticated.
    And I don’t even get the notion about Beverly Hills Chihuahua or Tranny 2. People went because they WANTED to go. Yes, shit movies. But shit that people sincerely wanted.
    I am not suggesting that GQ make a better magazine. Not the issue. But there are people who want to consume GQ. And how do you find a price point that works for them?
    Finally, if you don’t think people don’t share what apps they have – letting you know they have the Vogue app – then you don’t know people with iPhones. It would be the first thing I would expect to see, women saying “you have to see THIS” while handing their iPhone over to friends to show them the shoes that just showed up over the wireless.

  3. Foamy Squirrel says:

    Some good points, Dave, and certainly highlighting some weakpoints in my comment. I’ll try to make some clarifications to my argument, since it looks like I wasn’t as clear as I would like.
    I’m not talking about bullshit brand and marketing here – just as you have content producers dumping stuff on the market and wondering why their bank accounts aren’t too healthy, you have people trying to sell sizzle without the steak. So the notion that people buy iPhones just because they’re “Apple” doesn’t cover the whole story – it’s a package deal. You get a decent functional phone, a sexy brand/design, and a great network of both official and user-generated support. THAT’S what consumers are buying, not just one in isolation. It’s why competitors who focus on just one aspect, playback performance in the case of Rio mp3 players or user-generated content in the case of Android, don’t do as well.
    I would also argue that the DVD example does not support the “content” argument well either, as Iger has openly admitted that blu-ray sales are not what Disney hoped. There is a case that the price point, along with the economic downturn, have a lot to do with that – and I would agree – but at the end of the day you have a superior product that is underperforming. This was replicated when PS2 sales continued to outperform PS3 sales and when Wii overtook PS3 as well. Consumers will sometimes even pay more for worse products, a lesson harddrive manufacturers learned several times during the 70’s and 80’s when they went through several cycles of disruptive innovation and each time the leading manufacturers went out of business.
    “Tranny 2” is a spectacular example in this regard, because people went to see it expecting it to be a shit movie and came out with their suspicions confirmed – all the reviews and complaints say so. I don’t think you can argue that people “want” to see something they know is shit, but Michael Bay convinced millions of them to cough up money anyway. THAT’S a neat trick. It wasn’t about the movie, it was Michael Bay correctly positioning it in the market – something that he does exceptionally well time and time again.
    I’m not suggesting GQ spend millions on an ad campaign or on fancy web design. I am suggesting that they work out why people by GQ instead of other magazines and then build a system of products and services to support that. The minute they start competing solely on content/price is the minute they seal their fate. They can’t compete with free. They have to deliver a package deal that warrants a price point for them to stay in business, because I’m fairly sure they wont be able to continue in anything closely resembling GQ as we know it at a 25-50c price point.
    I think your comment about the Vogue app illustrates my point quite well – women want it to show to other people. They don’t want the pictures themselves, they want to be part of a (supposed) elite crowd at the forefront of fashion.

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It shows how out of it I was in trying to be in it, acknowledging that I was out of it to myself, and then thinking, “Okay, how do I stop being out of it? Well, I get some legitimate illogical narrative ideas” — some novel, you know?

So I decided on three writers that I might be able to option their material and get some producer, or myself as producer, and then get some writer to do a screenplay on it, and maybe make a movie.

And so the three projects were “Do Androids Dream of Electric Sheep,” “Naked Lunch” and a collection of Bukowski. Which, in 1975, forget it — I mean, that was nuts. Hollywood would not touch any of that, but I was looking for something commercial, and I thought that all of these things were coming.

There would be no Blade Runner if there was no Ray Bradbury. I couldn’t find Philip K. Dick. His agent didn’t even know where he was. And so I gave up.

I was walking down the street and I ran into Bradbury — he directed a play that I was going to do as an actor, so we know each other, but he yelled “hi” — and I’d forgot who he was.

So at my girlfriend Barbara Hershey’s urging — I was with her at that moment — she said, “Talk to him! That guy really wants to talk to you,” and I said “No, fuck him,” and keep walking.

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My friend paid my rent for a year while I wrote, because it turned out we couldn’t get a writer. My friends kept on me about, well, if you can’t get a writer, then you write.”
~ Hampton Fancher

“That was the most disappointing thing to me in how this thing was played. Is that I’m on the phone with you now, after all that’s been said, and the fundamental distinction between what James is dealing with in these other cases is not actually brought to the fore. The fundamental difference is that James Franco didn’t seek to use his position to have sex with anyone. There’s not a case of that. He wasn’t using his position or status to try to solicit a sexual favor from anyone. If he had — if that were what the accusation involved — the show would not have gone on. We would have folded up shop and we would have not completed the show. Because then it would have been the same as Harvey Weinstein, or Les Moonves, or any of these cases that are fundamental to this new paradigm. Did you not notice that? Why did you not notice that? Is that not something notable to say, journalistically? Because nobody could find the voice to say it. I’m not just being rhetorical. Why is it that you and the other critics, none of you could find the voice to say, “You know, it’s not this, it’s that”? Because — let me go on and speak further to this. If you go back to the L.A. Times piece, that’s what it lacked. That’s what they were not able to deliver. The one example in the five that involved an issue of a sexual act was between James and a woman he was dating, who he was not working with. There was no professional dynamic in any capacity.

~ David Simon