Quote:
Originally Posted by HarryT
In many cases, lowering prices will not significantly increase sales
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For digital items, this has been proven false many times. It's that whole "marginal cost" thing again, digital items are where it really shines, because the supply is infinite, so the only thing affecting demand is the price.
The Steam sales on games have game authors reporting things like a 50% reduction in the end-user price results in 10 to 20 times as many sales as during the same time period when the game is not on sale. Since the game has already been written, that means that the author puts 5x as much money in their pocket as before.
Music is the same...at $0.99/track, Apple sold 2-3 times as much as when the track was priced at $1.29. That has to do with one of those weird things in human behavior...the price threshold.
As for ebooks, have you looked at the Amazon "best seller" lists lately? The top 100 is now dominated by sub-$5 books, and that is all because they sell far more than twice as many copies as the $10 ebooks. Again, part of that is because of the price thresholds that everyone sets in their own mind, but $5 is a big one for a lot of people.