Guba, who recently added professional content from Warner and Sony to its user generated lineup, announced today that it’s dropping prices on rentals and purchases.
View-On-Demand (VOD), a 24 hour rental priced from $1.79 to $2.99 will drop to $.49 for catalog titles to $.99 for new titles. Download-To-Own (DTO) will go from a range of $9.99 to $19.99 to $4.99 for catalog titles and $9.99 for new releases.
Guba’s CEO Tom McInerney said Guba is making this decision to test the demand impact and build the brand: “I think what’s interesting here is actually trying to get at what prices for a digital download make sense for consumers. No one has done a reasonable test here. We’re losing money but the data will be very valuable to bring back to the studios. I’m quite curious myself.”
McInerney further indicated that demand has been higher for ownership than rental which is contrary to previous consumer research, so it will be interesting to see if these prices tilt the mix towards rental. $.49-$.99 is pretty darn cheap.
DRM still limits the number of devices and copies, the content still plays on a Windows Media Player on a 640 * 480 screen, so the overall offering has not changed save the price. But more titles continue to come online and MCInerney indicated it will reach 1,000 within 3 months, so at least there’s a broader selection than when first previewed here.
Was it a sign of desperation? “Things are selling well,” McInerney said. Whatever ‘well’ is, they could be higher. Obviously, you don’t drop prices if product is flying off the virtual shelves and it’s a lot harder to go back up. So it’s a gamble on Guba’s part that it will drive some serious demand and help goose the studios to lower their wholesale prices. At least, it’s further evidence that Guba has the trust of the studios, which will help its potential exit opportunities somewhere down the road.
Comments on the initial post here indicated TechCrunch readers were unimpressed with the initial offer for the price. Is it more attractive now?