Mark Cuban continues to make the argument that in digital products it makes no sense to promote and sell a product twice. Case in point: Hollywood studios should run one marketing campaign for new movies, and then release in theater and on DVD simultaneously, albeit charging much more for the DVD version:
[Mark Cuban and Todd Wagner] also are refining a strategy for releasing films simultaneously in several media, rather than adhering to the industry practice of sequential release in cinemas, then airplanes, then DVDs, and so on. They’re working with big-name directors such as Steven Soderbergh, whose most recent film was ”Ocean’s 12.” Cuban wants to make movies available in formats consumers like, as soon as they come out, whether that means DVD, cable pay-per-view, or a keychain USB drive.
”If you want it, and you’ve got kids and can’t make it out, but you still want to talk about it around the water cooler at work — we enable you to do it,” Cuban says, adding that a DVD might be priced at $34.95 on the day a movie debuts, compared to an $8 movie ticket.
”Why not have one single, efficient advertising campaign?” Wagner says. ”Today, advertising is done twice. Once to get people to the theater, and again five months later to get them to buy the DVD.
”This is a digital world,” Wagner says. ”Either you get on the opportunity, or somebody else will do it for you.”
It is a fun idea in digital markets, and one that need not be limited to movies — but it doesn’t work everywhere. Consider books, where while you could sell paperbacks and hardcovers at the same time, it’s not clear why many (any?) people would choose the more expensive over the less. Seeing a movie in theaters and seeing it at home are very different experiences, ones worthy of differential pricing; reading a book with stiff covers versus soft covers are not nearly so separable experiences. Yes, some collectors prefer hardcovers, but they aren’t much of a market.