I Told Ya (Price Reduction)

[Rentahamster]

Too much to ask from what perspective?

Free service is no longer sustainable. What they're doing here is breaking even for keeping the service up.

That's not the point.

The point from the original thread is about the way in which total revenue can possibly be increased through a price reduction since more people will have crossed the threshold to wanting to pay.

I still think the equilibrium point for optimal revenue is still a little lower than $9.99, but hey.

[Betelgeuzah]

That's not the point.

The point from the original thread is about the way in which total revenue can possibly be increased through a price reduction since more people will have crossed the threshold to wanting to pay.

I still think the equilibrium point for optimal revenue is still a little lower than $9.99, but hey.

Even 9.99 means 25% more people would have to pay for the service as opposed from 12.99 fee.

Even that sounds far-fetched, much more-so when you keep lowering the fee. I think they are going to be on the losing end here to meet the customers at half-way (I guess for PR purposes). I don't think this reduction will result in 25% more subscribers than with a full price.

[Rentahamster]

I don't think this reduction will result in 25% more subscribers than with a full price.

That's because it's still probably too high for most people. There is a greater threshold for customer acceptability at a lower price point. You won't get the numbers you desire until you cross that threshold, and I don't think -25% will reach that threshold.

This isn't a linear relationship.

[Betelgeuzah]

That's because it's still probably too high for most people. There is a greater threshold for customer acceptability at a lower price point. You won't get the numbers you desire until you cross that threshold, and I don't think -25% will reach that threshold.

This isn't a linear relationship.

Yeah this isn't a linear relationship, but you're saying that they would get double the subscription numbers which they would need to get if they halved the fee. I don't believe that for one second. 6 dollars versus 13 is not so big of a deal for so many people, even if it was merely a principle.

They would have more subs, definitely, but not double. Hell no.

[Rentahamster]

Yeah this isn't a linear relationship, but you're saying that they would get double the subscription numbers which they would need to get if they halved the fee.

I didn't give numbers that specific.

All I'm saying is that there is a some amount of revenue they will get with their current plan of 10 bucks a month, and that it's possible that they could get more revenue at a plan that is less than 10 bucks a month.

[Betelgeuzah]

I didn't give numbers that specific.

All I'm saying is that there is a some amount of revenue they will get with their current plan of 10 bucks a month, and that it's possible that they could get more revenue at a plan that is less than 10 bucks a month.

I didn't imply that the numbers would have to be that specific. Pick a number from halved fee and full fee and my point still stands.

Your nor I really have not the sufficient knowledge required to make an informed guess either way however. Unless you are an expert in this particular field, and not just talking out of your ass with made up assumptions like I am.

They have experts working for them with much more information than we could possibly even dream of to make that call. And this is the result they came up with. I'm not exactly confident that you could do a better job than them, especially since you're not exactly in an unbiased position (as you're one of the people having to pay said the fee).