Thursday, February 16, 2012

Steam and Netflix Show Old Media How to Profit and Generate Revenue in the New Era. With $350,000 per Employee, Steam Leads by Example.

For anyone familiar with Steam, they are aware of the success it has experienced in the video game industry by shirking the traditional brick and mortar distribution model, and deciding on an exclusive on-line presence. Paul Tassi in a recent issue of Forbes notes that Steam has a model for success that other media distribution company's need to follow and emulate. He is absolutely right, and the sooner the better for many of the media dinosaurs.

Amazingly, he notes that at Steam, developers get 70 percent of revenues... traditionally they get 30 percent. Utilizing Steam to sell your software, therefore, is a huge win for developers, and Steam is smart in developing a loyal base among those who develop and create the content that consumers want to buy.

A second statistic is that Steam rakes in $350,000 per employee. This is more than even Apple or Google, and unparalleled in the technology industry.

Essentially, Steam's "ease of use" and fair prices are making piracy a manageable problem for the video game industry according to Paul Tassi.

Instead of trying to use legislation to fight against the headwinds of new technology, developers, content providers, and distributors need to emulate company's like Netlflix and Steam. Revenue and profits are there to be made in the new era of media, company's simply have to innovate and modernize their operations. The examples are already there to follow.

No comments:

Post a Comment