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Is the age of discounts over?
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<blockquote data-quote="Felix" data-source="post: 3616844" data-attributes="member: 3929"><p>Assume: </p><p style="margin-left: 20px">Hobby stores grow the market demographic.</p> <p style="margin-left: 20px">Discount retailers do not grow the market demographic.</p><p></p><p>The publisher would care about the retail price because its future revenue growth is ensured by a growing market demographic. The publisher might get paid the same amount per book sold by the retailer, but if they can form contracts that keep their product out of retailers that don't grow the market, they funnel revenue through retailers that will grow the market. In the long run the market will grow, and the publisher will have higher revenues from retailers ordering more inventory for the growing market.</p><p></p><p>They expect to lose the customers who purchased only discounted material; they hope to gain new customers that will enter the hobby stores, who would not have been gamers had the hobby store gone out of business. This is predicated upon how accurate those assumptions are. I imagine publishers have put some time into finding out if they're true.</p><p></p><p></p><p>EDIT:</p><p></p><p></p><p>My analysis suggests that this strategy is a long-term, not a short-term one. They don't mind that large-scale or internet retailers can reduce fixed costs to sell cheaper; they care that this industry is nurtured best in a small scale FLGS environment.</p></blockquote><p></p>
[QUOTE="Felix, post: 3616844, member: 3929"] Assume: [indent]Hobby stores grow the market demographic. Discount retailers do not grow the market demographic.[/indent] The publisher would care about the retail price because its future revenue growth is ensured by a growing market demographic. The publisher might get paid the same amount per book sold by the retailer, but if they can form contracts that keep their product out of retailers that don't grow the market, they funnel revenue through retailers that will grow the market. In the long run the market will grow, and the publisher will have higher revenues from retailers ordering more inventory for the growing market. They expect to lose the customers who purchased only discounted material; they hope to gain new customers that will enter the hobby stores, who would not have been gamers had the hobby store gone out of business. This is predicated upon how accurate those assumptions are. I imagine publishers have put some time into finding out if they're true. EDIT: My analysis suggests that this strategy is a long-term, not a short-term one. They don't mind that large-scale or internet retailers can reduce fixed costs to sell cheaper; they care that this industry is nurtured best in a small scale FLGS environment. [/QUOTE]
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