Originally posted by: Scruffy
Actually, the latter COA is indicated.
Experience from the real world has shown us that he does both, as I said. While there is no doubt that he will happily release sub-par products to maximise profit (we agree on this), he also, for example, made the decision at some point to produce a laserdisk master for a relatively small market. Why did Lucas do this? Generally speaking, he did it because the return on investment makes it pay off in the long run, in the sense that spending money to renew the product from time to time will yield a significantly greater profit than simply exhausting all the marketing possibilities after the initial outlay. Star Wars became a phenomenon, not just because it was good, but also because Lucas cleverly reinvested significant amounts of money into the franchise to keep it going. If he hadn't followed this strategy, Star Wars would have worn off just like any other fad, as evidenced by the relative drought of Star Wars products in the mid to late 1980s. (On a different note, Lucas also has no other products to invest in which can yield him a profit of the same order of magnitude and this has also contributed significantly to the longevity of Star Wars, but that's beside the point.)
As you correctly point out, this does shut off a future revenue stream, so the investment isn't made before this source of income is close to exhausted. The important thing to remember, which you have omitted, is that the investment creates a new product, which can be sold and resold with all the spin offs and special editions you can imagine for the purpose of generating even more profit. The point is that you'll make much more on the bottom line from doing this all over again with the new product rather than trying to squeeze the few last pennies of profit out of the old one. So you go this route, and you do this until the market is saturated once more and the cycle starts over again.
The latter COA requires very little investment -- Lucas can pretty much use the same technique he's using now, bundling with an extant product and marketing it as something new. For all the releasing his does, he produces very little, and I expect this to continue. (Barring some technological singularity, like the sudden mass adoption of HD content.)
Actually, the latter COA is indicated.
Experience from the real world has shown us that he does both, as I said. While there is no doubt that he will happily release sub-par products to maximise profit (we agree on this), he also, for example, made the decision at some point to produce a laserdisk master for a relatively small market. Why did Lucas do this? Generally speaking, he did it because the return on investment makes it pay off in the long run, in the sense that spending money to renew the product from time to time will yield a significantly greater profit than simply exhausting all the marketing possibilities after the initial outlay. Star Wars became a phenomenon, not just because it was good, but also because Lucas cleverly reinvested significant amounts of money into the franchise to keep it going. If he hadn't followed this strategy, Star Wars would have worn off just like any other fad, as evidenced by the relative drought of Star Wars products in the mid to late 1980s. (On a different note, Lucas also has no other products to invest in which can yield him a profit of the same order of magnitude and this has also contributed significantly to the longevity of Star Wars, but that's beside the point.)
The former COA requires a significant investment (finding/striking a good print, scanning it, downrezzing for DVD, QA) and shuts off a future revenue stream (fanboys who think if they buy it the next one will be done right).
As you correctly point out, this does shut off a future revenue stream, so the investment isn't made before this source of income is close to exhausted. The important thing to remember, which you have omitted, is that the investment creates a new product, which can be sold and resold with all the spin offs and special editions you can imagine for the purpose of generating even more profit. The point is that you'll make much more on the bottom line from doing this all over again with the new product rather than trying to squeeze the few last pennies of profit out of the old one. So you go this route, and you do this until the market is saturated once more and the cycle starts over again.
The latter COA requires very little investment -- Lucas can pretty much use the same technique he's using now, bundling with an extant product and marketing it as something new. For all the releasing his does, he produces very little, and I expect this to continue. (Barring some technological singularity, like the sudden mass adoption of HD content.)
The creation of HD content is just one of the potentially upcoming investment and product cycles. Provided there is a viable HD market at some point in the future, Lucas will know how to profit from that as well.
Don't get me wrong, I'm not defending what Lucas is doing. I want a proper quality OOT release just as much as you do, and I'm not even willing to buy the stuff he puts out in place of what I want. What I'm saying is that what he's doing makes perfect sense if his goal is to maximise profit, and that's pretty much a given by now. On September 12, Lucas will ride again, and he will be laughing all the way to the bank once more, but at least he won't be carrying any of my hard-earned cash with him.