Rock Band Video Game Selling T-Shirts Of Fake Bands

from the lotttttts-of-t-shirts dept

When critics of our analysis of the economics of infinite and scarce goods want to mock our ideas or make fun of us, they often fall back on the false claim that the business model we advocate is "give away everything and make it up by selling t-shirts." Or, rather, if they're really in a mocking mood, they usually write "llllllloooooooooooooooooootttts of t-shirts." It's quite amusing, though, of course, it shows a fundamental misunderstanding of what we mean by scarce goods.

That said, t-shirts can make up one part of the scarce goods that someone sells, though, it will almost always be a small part of it. And, there's no reason to mock the contribution that selling t-shirts can make as part of a larger business model. Reader Aaron de Oliveira points us to the interesting news that the super popular video game Rock Band is now letting players who have uploaded their own fake rock band logo order t-shirts, keychains and other merchandise from their fake band. As de Oliveira correctly notes, not only does this make some money, but it also makes the gaming experience better, connects fans more closely to the game and their own fake rock band in the game:
The company realizes it's not in the music business or in the t-shirt business. Its business model is the custom experience and it uses music (fun & free or cheap) and t-shirts to improve that experience in such a way that people are willing to pay for it.
Bingo. So go buy llllllooooooooottts of t-shirts to make it work.
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Filed Under: business models, economics, infinite goods, rock band, scarce goods, t-shirts, video games

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  1. icon
    Aaron deOliveira (profile), 14 Oct 2008 @ 6:00am

    Re: Excuse me, Mike

    in freeconomics or infinite goods. there is no one right way to do things. it is rather a recognition of 2 things. that infinite goods can make scare goods more profitable and that infinite goods create value in new places in your market to be captured.

    harmonix, the makers of rock band, a building a ton of value on top of something that is very easy to distribute. in this case music. there is only a very small cost difference between selling the same music to 1 person as 10,000 people. yes there is still a cost involved, but it is of such a negligible nature, that the music they sell could be called 'infinite'. another reason it's called infinite is that whether they sell it to one person or one million people it doesn't run out. they don't have to spend any more time producing said good.

    so back to how they're using music as an infinite good. they add value on top of the music, specifically in their unique experience. people are willing to pay for the game and the peripherals not just because they like the music, but because of the experience. the music adds value to all of the peripherals, which are scare goods, and gives people a reason to buy them.

    an infinite good like music has also created value in another part of the market that harmonix is now trying to capture. part of their experience is the 'cool factor' of having/being your own band. they offer other scare goods, key chains, t shirts, figurines which capture this value that is created by the infinite good music. harmonix can continue to collect revenue by selling an infinite good, it's software. another infinite good, music within the game, a scare good, the peripherals and now they've found another place to capture value from their customers by selling customized scare goods like t-shirts & key chains.

    as far as whether they should charge $24.99 for a t-shirt. i imagine you'll find lots of real bands t-shirts out and about in the world. i have a Reba McEntire & and a MegaDeath t-shirt in my closet. as far as the utility these shirts, they could probably not command a premium like $24.99. they are no different than your average t-shirt you can get from wal-mart. what adds value to the shirt and makes it worth it to someone is the association with performer.

    specifically on the $24.99 rock band t-shirts. rock band is offering a service. any player could probably find their own way of producing any of the goods being offered, t-shirts, key chains even the figurines. the reason they would pay rock band is that it would be extremely time consuming and costly, probably more than the $24.99 cost to purchase one from Rock Band. harmonix has added value to a plain t-shirt by offering a connection to the players own user experience, as well as offering a bit of convenience in the customization. harmonix has done all the leg work for the customer.

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