It troubles me greatly to think of the extent to which we ignore the technology available to us. The other day I was listening to a podcast (haha! triumphantly) that was talking about the absurdity of flying someone across the country for a meeting when one could just as easily use the phone, email, chat, or an array of other long distance communication devices.
Today I read this post from Seth Godin (marketing god) about the stone-age status quo of the movie rental business that is currently carrying over unnecessarily to the next generation of technology.
The movie studios are starting to get excited about renting movies digitally. The pricing seems to be modeled on Blockbuster. Figure $3 a rental, another buck or so for HD. That seems 'fair', because it's in the same range as we're used to.
Blockbuster buys DVDs for $15 or $20. The studios have to pay for duplication and warehousing and marketing and they take a risk with every pressing that they'll have to shred the leftovers.
Blockbuster then rents them out 30 or 40 or more times each, meaning each rental costs Blockbuster fifty cents. Not to mention rent, surly clerks, cost of capital, advertising, etc. Or, in the case of Netflix, stamps.
In the case of online rentals, all of these intermediate costs immediately disappear. Gone.
So, why try to mimic the current model when it comes to pricing if the costs are mostly gone?
Echoes of the recording industry, to be sure. How can these multi billion (Billion. Buh. With a B) dollar markets ignore the possibilities of the latest technology? You'd think the impetus to innovate would be impossible to overlook.