Pilot Light

Inferno is a PR consultancy. This is not. This is Inferno’s blog.

Archive for May 2007

Cutting loose from Razors and Blades

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Indeed…

There has been a lot of talk recently about Kodak’s revised entry into the printer business.  Despite the patronisingly silly brand name (EasyShare sounds like it could be a double packed chocolate bar or a load of any other things) it actually represents a major challenge to a classic business model: ‘razors and blades’.  For any non-armchair economists out there, this means that the main product is sold for the lowest price possible (sometimes even at a loss) but the bits that make it work have fat enough margins to more than make up the difference.  Aircraft, jet engines, games consoles, razors, electric toothbrushes and inkjet printers are all sold on this basis.  This is a very, very successful model despite structurally meaning that the biggest consumers subsidise the dabblers (which may seem unfair).  It also opens up opportunities for brave competitors.

You can easily make a case to a business customer that to pay a bit more for a thing at the start in exchange for much lower running costs over its useful life makes a lot of sense, but this is a harder concept for consumers to ‘get’. 

I once drove to PC World in Croydon just to get a midrange photo printer that was on clearance for £50.  I took me about 18 months to work out I had been conned as the thing consumed more ink than an LA tattoo parlour, making it a £350+ purchase in no time.  I moved on to a wonderful Canon PIXMA with its single ink tanks, but it still costs something like £50 to re-ink the thing totally (no I don’t use nasty refilled or unofficial cartridges – they gum up printers). The new Kodak models cost £17 to re-ink, but are dearer up front.  Stateside, they have embarked on all kinds of obvious but effective consumer PR tactics (are you an ink miser? Do you sneakily print colour in the office?  Do you stop your kids printing in colour? Etc) to underline the point.  Interestingly, Kodak have also been shifty with press about what the actual dpi resolution of the printers is, just like Intel and AMD have sometimes tried (and failed) to de-emphasise the clockspeeds of their processors.  Megapixels, dpi and Ghz are spouted as fighting words by fanboys but actually are deeply misleading and mean little once you get beyond a certain baseline.  

A bold move on the whole, which may give them a niche amongst the thrifty at worst or a place at the top table of printer brands at best. There are occasional backlashes against the fact that by volume printer ink is one of the most expensive liquids on Earth.

However, razors and blades works for a simple reason – consumers like low prices, even if they are an illusion.  This will be a real marketing challenge to watch. 

J

Written by pilotlight

25/05/2007 at 11:49 am

Posted in marketing, PR, Tech

Tagged with

Illicit Innovations

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The GunBoy Double Super Joy

I do not own a games console and have not done since I had a Sega Mega Drive with its expensive and insultingly useless CD-ROM attachment. The trouble for me with games today is not only do they seem expensive but are too good, too immersive. I just want to jump around, blow things up, race, fight or compete for a few minutes in a non-committal way. A friend of mine has an XBOX 360 and no games except those he rents (and probably Gears of War) which seems a wise choice.

 

What I do have are two joysticks with built in old games – one that is a Commodore 64 with 30 titles (and the nice analogue synth sounds) and another that is 5 old Namco games including the peerless Galaga and Ms. Pac-Man. These things were a hot retro gift a while back and it took a while for me to catch on. In fact, one of the big aspects of the Wii is that it has the ability to play old school console games as well as the new guff.

 

This was yet another tech market pioneered by the illicit innovations of the grey market and various legally dubious chancers. PCs have had wildly popular arcade and console emulators for a very, very long time. These rely on the usual indifference of games publishers to old IP and dodgy downloading by punters. The idea of sticking a bunch of old games in a cheap, simple device that plugs into a TV directly is also not new. PRC pirates copied and shrunk the innards of a Nintendo Entertainment System to just a single illegal chip ages ago. Thus third world markets have long been flooded with the comical ‘Gunboy’, ‘PolyStation III’ et al. There are hundreds of variants. For the kids that get these, piracy will be further regularised and contact with the brands that need to reach them as they become more affluent will be limited. This seems like a wasted opportunity to me.

 

The lesson for tech and content companies is simple – just watch what the grey and black markets are doing if some new ideas are needed. Don’t be afraid – copy them back.

J

Written by pilotlight

22/05/2007 at 5:00 pm

Posted in Gaming, Tech

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Disclaim…er??

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We thought we would do due diligence when starting a blog and get some legal advice on disclaimers and so on. Maybe a line or two about “these views are those of the writer and not the company” if needed (and we suspected it would not be needed at all). Amazingly, this is what we got back. When we had stopped laughing at its sheer inappropriateness, we thought we would post it unaltered in all its gruesome glory. Public relations and the legal profession have always mixed together as well as joggers and wet cement and it seems blogging is no different. The sort of conversations we hope to have on this blog would simply never happen if we kept to these sort of terms. So our approach is simple really – ridicule. The more we mock, the less often this kind of legal straightjacket will be imposed.  Just to be sure, we made a few careful alterations before deciding to ignore the thing.

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1. To the extent permitted by law, we do not accept responsibility for any statement in material published. You must not rely on any statement published without first taking professional advice. Preferably from us.

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Written by pilotlight

22/05/2007 at 4:46 pm

Posted in Uncategorized

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