August 12, 2019

Pricing Failure & VR

We've been talking about “pricing failure.” (See last two posts ) 

Fast-forwarding to virtual reality as we know it today, we don't need to look hard to see the same pricing failures, as greedy companies race to the highest price point for educational customers. And, frankly, schools simply cannot afford it. On the other hand, the ‘freemium’ pricing model is increasingly popular these days, where starting base of VR resources is free, but the best, the premium resources, have a price tag. And when we brush away the ‘free’ part of freemium, my oh my, that price is a hefty one. Sticker shock immediately sets in like concrete, preventing “the buy” or the reasonable scaling of virtual reality in the classroom. Especially when the offer comes as annual licensing as opposed to perpetual licensing.

Will a few greedy companies destroy this industry for the rest of us, before it has a chance to get legs? Just to make a killing? Strike gold? Since content is king, will content price failures undermine any hoped-for trajectory for hardware sales? Or will the freemium strategy, now increasing in frequency, pay off? One thing is for sure: if pricing failures get in the way of technologies reaching the educational market, then sic transit gloria mundi—“thus passes the glory of the world.” Or VR.

August 5, 2019

Pricing Failure (2)

We've been talking about “pricing failure.” (See last post for an introduction.)  

The opposite of “pricing success”, a “pricing failure” bursts on the scene when there isn’t a clear correlation between an item’s cost and its value/quality. It reminds me of a serious pricing failure, one I witnessed in the educational marketplace. Yes, I remember it distinctly, during the years of the initial stereo 3D explosion in film, displays, and projectors. A top-level manager from the DLP group at Texas Instruments whispered to me the hard truth: how the pricing set forth by just one or two educational 3D software producers was so rapacious, that those companies almost brought down the entire 3D industry/market in education—by steeply overpricing their content. I was there. I saw the gut-wrenching reaction of educational buyers. The pricing was, well, ridiculous. And this is still true about many promising technologies in education. Pricing failure is more common than one would think. 

Stay tuned for next week's conclusion about the potential for pricing failure in the expanding virtual reality world.