Research: Pirates Will Buy If The Price Is Right

'Buy music' on iMac

By Kevin Anderson: The music, film and video game industries are pricing themselves out the market, according to new research from Ipsos MORI. It found that creative industries could increase their sales if they addressed a gap in what the industries are charging and what the majority of people are willing to pay.

“It’s a bit of a wake-up call,” said Ian Bramley, director of the entertainment unit within Ipsos MediaCT. It tested more than 30 digital content distribution models for music, movies and video games in interviews more than 1,000 people over the age of 16.

While there was interest in free models supported by advertising and subscription models, across film, music and the latest generation of console video games, people preferred to download content to own.

One of the most common complaints from the creative industries is that people won’t pay for content online when they can get the content for free through a range of illegal file-sharing services, but the Ipsos study found that two-thirds of people they interviewed who pirated music would switch to official distribution channels if the price was right. “This is a huge opportunity, but it depends on how hard they want to battle against the pirates,” Bramley said.

Drop prices to entice music pirates: Currently, Apple (NSDQ: AAPL) charges £0.79 per track on its iTunes store. Only about 10 percent of respondents were interested in buying tracks at that rate, but interest rose to 32 percent when the price dropped to £0.45. Music fans also want tracks without DRM – digital rights management – so that they can shift the music to the device or format they want.

Movies popular at £3: For older movies and classic games, the industry and consumers are closer to each other in price, but download prices are too high for new releases. Movie and TV programme download service Blinkbox charges £12 pounds for new releases, but only £2.50 for older films from studios catalogue. The Ipsos survey found that £3 was the “optimal price” for downloaded films, with 36% of respondents say they would be interested at paying for downloaded films at that price.

One of the challenges for video downloads isn’t down to pricing but problems with the technology. People are unwilling to pay higher prices when they can only watch the video on a computer. However, connected TVs are on the horizon, due to hit the market next year. “Those are things that will open up the market,” Bramley said.

In the meantime, the movie industry is facing a challenge to close that yawning chasm between what they are charging and what consumers are willing to pay. To close that gap, the movie industry either needs to reconsider their pricing or add extra value to their digital offerings such as the extras bundled with DVD collections. But for gaming and films, Ipsos sees the most opportunity in looking to the past, releasing classic games and films from studios’ vaults at the prices consumers are willing to pay.

This article originally appeared in © Guardian News & Media Ltd..

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