In my earlier note I claimed that I had found Caroline Howlett's message
from 21 Apr 1997 unconvincing, and I think that I should explain why:
>As for our pricing policy, we have been told more than once that if we
>had priced PLD at one-tenth of the price, we would have sold ten times
>as many. Would we really have made fifty sales in Austria, rather than
>five; forty in Sweden, rather than four; or three hundred in Germany,
>rather than thirty? It seems unlikely. We looked at many ways of
>pricing the database but the model we adopted was the only one which
>would enable us to cover our costs.
By selling to institutions only, C-H has chosen to sell to a closed marked
where demand will be satisfied by a few hundred sales within a couple of
years, and this will be the end of the business, unless C-H can make some
additional money by selling support, upgrading the search engine, etc. Or
unless C-H decides to lower the price from time to time in order to win
also smaller institutions as clients. In this case their first clients
would probably be unpleased to see the value of their investion decreasing
progressively.
By selling to institutions *and* to individual scholars, C-H would have
chosen to sell on a market with continous demand, because new generations
of scholars and students will always have new demand for the product. If a
product priced $ 45.000 (I am not sure what the current price for the PLD
is, but let's assume this figure) can be sold five times in Austria within
*two* years, what will be the total after *twenty* years: six, or seven, or
maybe eight sales? Reducing the price to $ 4.500 would probably not make a
big difference, because this would still be too much for the budget of the
average student and scholar specializing in patristic/medieval studies. But
I suppose that if the price was $ 450 there would be a good chance to place
enough PLD's each year in Austria to overcome, after twenty years, the
maximum of six, seven or maybe eight times $ 45.000.
Otfried
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