More from Ramon Casadesus-Masanell…

April 30, 2007

I was rereading the interview with Ramon Casadesus-Masanell (an assistant professor in the Strategy unit at Harvard) on the HBS Working Knowledge website and found some more interesting statements that I want to add here.

“Our analysis reveals that, contrary to intuition, prices low enough to “kill” p2p are not optimal in large markets. The industry is better off setting higher prices and attracting those consumers ready to pay due to congestion. Coexistence with p2p, however, does result in lower prices than would otherwise be observed.”

I agree with him in the area of “pay per download” cause the “legal” distribution costs are too high to make a very intersting price for “illegal” p2p downloader. In the “subscription service” area I’m not sure if there isn’t a way to compete on the “price” level.

But later on he said a more important thing:

“Finally, to compete effectively against p2p, online digital distribution must strive to become accessible and attractive to consumers. Online content providers are in a unique position to optimize and deliver new experiences to consumers that cannot be easily matched by decentralized, self-sustained peer-to-peer networks. ITunes provides a better customer experience than file sharing networks for similar content, and this allows record companies to charge positive prices and make a profit.”

Customer experience and the brand, those are the keywords!


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