GUBA Slashes Prices
Even since its June deal with Warner Brothers, the performance of online film content provider Guba’s movie downloading service, much like that of CinemaNow and Movielink, has failed to impress. As a result, Guba has developed a new promotional pricing structure designed to attract new users.
Formerly, movie downloads that were priced at $19.99, $9.99, and $1.79 (depending upon release dates and rental length) are now respectively priced at $9.99, $4.99, and $.99. Guba CEO Tom McIerney contends that the major problem facing the movie downloading model is determining a price that will work for consumers, content providers, and movie studios alike. Accordingly, McIerney thinks that this pricing experiment will be very revealing; he claims that, since the promotion began, traffic on the site has increased by 500%.
I tend to agree with McIerney. The only way that this model will get off the ground is it if offers truly reasonable prices. Consumers are smart enough to realize that, once these sites go up and licensing deals are inked, the only true cost to the providers is bandwidth. These downloads therefore have to be cheaper than packaged, special-features-loaded, DVD
Thanks to Red Herring for the story.