The prices are getting out of hand
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Hypothetical example, say a hair model is priced at $15 and is on sale for 30% off making it 10.50. If that same hair model had a regular price of $10.00 with no discounts, is it going to sell as well as the higher priced, but discounted one?
For me, the red flags saying "discount" "sale" "-40%" trigger an emotional response to buy, add a perceived value, and give an endorphin boost from the thrill of a bargain. I know not everyone shops that way.
Greetings,
Edit: added DG's comment, as it's important also.
For more information on this, and how it's not just you, google for 'JCPenny fair and square'; it's an absolutely FASCINATING case study of how it's critical to have regular sales, because those are what bring people to the store. Even if any given person doesn't care for the sales method, they should want it to keep going because regular sales that drive traffic are what keeps a store in business, even if folks aren't buying the specific items that are on sale.
Edit: Now the original thread of this message...
Sorry, this next comment set me off a little bit. It ignored the multiplicative effects of selling multiple of an item...and I wanted to extend it to show that even with that, it's still hard to make money.
<Note: I have no inside knowledge on these numbers, they're based on public stuff I've seen.>
Well, let's go with the standard intro sale. If the item sells for $20, 30% off is $14, half is $7. Figure 2-3 weeks of hard work each day (some sets are more; I recall Sickleyield talking in terms of a month to do a good set). Most sales are in the initial time period, the later sales are as new people discover it, etc., which is pretty unpredictable and heavily discounted, so let's ignore it for now. So if 100 people buy a new item, that's $700 for 3-4 weeks of work. I'm fairly sure most folks can't live on that. Let's check... When a new item comes out, there's probably a spike in their back catalog, but probably at a deeper discount than intro, so say...45% off, so a few sales of the back-catalog $20 items at $5.50 net will increase that somewhat. Fundamentally though, if a new $20 (list price) item doesn't sell around 200 items (ignoring back-catalog sales for the moment) then they're not even making minimum wage. (140 hours to produce an item, $1400 at $10/hour (California minimum wage), 200 sales at net $7.)
Now DAZ has a significant amount of PC+ members; I recall it was in the 8,000 to 9,000 range at one point (based on having the forum status of Platinum Club at the time). Those are likely folks who are comfortable spending money on 3D items every month, because the coupons and discounts select for that, so there's a pretty darn good installed base to target, but it's also a price-sensitive group, since they joined to get discounts. They're also not necessarily all 'engaged', i.e. coming to the site regularly. DAZ's traffic numbers are excellent (at least twice their nearest 3D marketplace competitor last time I looked), so it's entirely POSSIBLE to have widely liked products that sell like bonkers, and make a lot more than minimum wage. But it has to be something with wide appeal, great promo pictures, a name folks already trust, and a strong reason to pull the trigger 'now', during the intro sale instead of 'wishlist and wait'.
There's an argument to be made that PA's are doing something they love, and that's probably true for many of them, but in order to MAKE something with wide appeal, they usually have to delve into areas they probably don't love. I've read some folks saying that they need to do the popular stuff (that many folks here and in other threads decry as 'same as' and such, but actually SELLS) in order to have the breathing room to do the fun stuff (that often gets popular acclaim, but not high sales). There's also the everpresent overhead (i.e. unpaid work) of keeping up with the technologies, since folks buy stuff that works with newer features (e.g. Iray, Genesis 3, new texturing types, etc.). The time spent learning isn't paid time (because you're not building a product) but has to be amortized over all your other products. Also, the more you can optimize your work (so something takes 2 weeks instead of 3) the more you can make per-hour, essentially...as long as you aren't cutting corners too much, because a bad quality release (or a bad seeming release) will depress sales for the next X products...
If you've got a name, and a huge back catalog of high grade stuff, you can command higher prices (and probably get a _slightly_ larger cut, I don't know) and ease the pressure somewhat.
Honestly, I'm shocked that there are folks making a living at this. The prices are so low, and the market so niche, that it's just...well, impressive that folks manage at all.
<sidebar>My hope is that VR just absolutely takes off in a HUGE way, and that folks start to tap into the DAZ market as a place to populate their virtual worlds... I think hope that VR becoming the next generation of entertainment will open up huge markets for 3D content, and larger number of people buying items for their own use, not just for static renders, which will ease some of that niche-market pressure for our PA's.</sidebar>
This content isn't expensive, nor are the prices out of hand, really. I wish they cost less...consumers always do. But I, at least, am not willing to give up any of the variables that make things cost more. Also, other sites don't spend time/money on security(!!!!), quality testing, building the amazing software platform (DAZ Studio, Install Manager, and more), advertising & affiliates, etc... It all comes with a cost, but in the end, we get amazing content on a killer platform for fractions of what that content and platform is really worth.
-- Morgan
[Edit/p.s.: I need to cut back on writing walls of text like this... :) ]
The tough thing is, we're all in the same boat -- most of the hobbyists have a pretty tight budget for this hobby, most of those who actually make some money with the art they produce are making far less than minimum wage and usually have another full-time job that pays the bills, and most of the PA's are also making far less than minimum wage and working another job to pay the bills. If it weren't for the fact that people want to do this even if it doesn't pay as well as slinging burgers, these products would only be affordable for wealthy hobbyists and very successful professional artists. And yes, getting more customers into the market is crucial, and I suspect that's what has made Daz so successful, growing the market as much as it can. But Daz isn't some mega-corporation that can spend millions of dollars on projects that will grow the market 5 or 10 years down the line. Looking at some of the things Daz has done over the past year, I see some really promising attempts at expanding the range of products -- for example, having 2 figure releases most months has resulted in a lot more male figures and content than there used to be, as well as figures like Bethany which would probably be too much of a gamble to stake a whole month's sales around.
But even with the market growth, 100 units sold in the first few days is considered a successful product. If those 100 units have a base price of $30, they probably actually sell at $15-$20, and the PA gets half of that, so to be generous say the PA might earn $1000. They have to pay taxes out of that, and buy new computers and software, and also make up for the products that are flops and only earn $400 or less. All told, if that product took more than a couple of days to create, they're getting far less than minimum wage. And those couple of days include not only creating the product, but also testing it, then creating promos to convince Daz that it's worth selling, then fixing any problems that come up in QA, probably redoing the promos -- that's a lot of work to get done in a couple of working days.
You don't seem the type to present speculation as fact, but I'm astonished at those numbers if accurate. Looking at the other side of the brokerage coin, with that kind of cash flow I can't see how DAZ can operate as it does profitably. I would have expected an order of magnitude greater than that at a minimum.
Something a lot of people don't factor in is that to do the promos, we also often spend some of the money we earn in purchasing many of the items we use in our promos. At that point, we're customers, just like everyone else.
For those, like me, who don't have access to GPU, I can spend as much time making promos as in making the product. And that doesn't include re-dos if Daz doesn't think the promos work well enough. Plus that we have already done the promos a few times ourselves because you can't often completely judge if it does what you intended till after render.
I don't have the exact numbers, but I think that's in the ballpark. Daz releases about a dozen products a day, so Daz3D'a share would be about $12,000/day, or annual revenues of about $4 million, which is roughly what Utah.gov reports.
Greetings,
Think scale; one PA takes 3-4 weeks to deliver a product, but with enough PA's, DAZ releases 4-6 8-12 (wow; the numbers have gone up!) products a day. 40-50% of those, plus 100% of buyouts is a lot when the drumbeat of new products is as constant as that. Now DAZ pays affiliate revenue, and a ton of overhead for servers, security, CDN, employees, support materials, and more, plus buying out products that they think they can sell a lot of (and the PA's are willing to sell to them), so I'm sure it's eaten up, but the incoming cash flow is pretty heavy. If you want to, you can play with it yourself... Watch your invoice numbers. Make a small purchase at a specific time, then another 24 hours later, and you'll see about how many sales/day they make. The number that's less clear is how much each sale is worth, but at least it'll give you an idea how many sales the marketplace (which is where DAZ makes their money) is making.
For one vendor, the marketplace would obviously not make money. At a certain number of PA's, there's a tipping point where they make a consistent profit, and just have to keep it going... Success breeds success, and it becomes the place for buyers, which means more sellers want to be there, which makes more money for the marketplace AND the sellers. It's a virtuous cycle.
-- Morgan
Most artist friends I know do not do art full time for profit. So it is wonderful if someone can make a living at it, but it certainly isn't something I consider to be fairly common in the art world and I would be surprised if many get rich doing it, so sadly, that is not unexpected.
That said, as a consumer, I really am only interested in the cost of the art supplies I buy here. If I wishlist a 20 dollar widget which I might have bought for 15, then a sale is lost. An the chances I will ever buy once it hits the wishlist are greatly reduced, and I certainly will still never buy it for 20 so that is still never going to happen.
Yes, but for the supplier, does the number of people who will buy at $15 but not at $20 make up for the number of people who would have paid $20?
Good point, I don't buy a lot of stuff because they are so distinctive I can't really use them. Okay for hobbyist I guess, but I do aspire to move beyond that designation one day, but then again I wonder who the market for the really distinctive items really are in the first place? I don't mind so much with characters, because I simply look at them as models; ex. Mosh is going to look like Mosh regardless of who is photographing her; only the clothes and settings change.
I honestly have no problem paying for really quality environments and assets (like the Streets of Tuscany set by StoneMason) if I really need them, or I can wait for them to go on sale which they inevitably do. I'm not going to begrudge anyone charging what they think they're worth, or making a living.
That is the question. And since I'm not behind the scenes I can't know. However I would imagine more units at 15- and happier customers would produce more buyers and thus be better longterm as well as a better reputation for the store.
In the end part of it is philosphy as well. Do you want your product accessible and affordable?
While the main source of revenue for Daz is the content marketplace, it would be interesting to understand how daz is bearing the cost of implementing DRM? Is it a homegrown solution where they own the entire IP or are they paying a royality based on sales? Of course there is the risk of losing revenue from piracy but how successful has the DRM been to curb that so far is anybody's guess. While some may correlate the price increase to RDNA merger I see a different cause if you are catching my drift.
Now some may want to justify the increased costs with the higher quality of items. This need not necessarily be true. If you look at hardware costs a $100 today goes a much longer way then it used to 10 years back. Many may attribute that to the exponential growth in consumer base, which probably hasn't worked out the same way as the 3D content marketplace, as it still remains niche. But rather than attempting to increase the customer base, Daz seems to be rowing upstream here. By forcing the buyers to use the content "only" within daz studio (thanks to DRM) it is trying to fragment the already niche user base further and monopolize that fragment. So far renderosity has been one of the key competitors but with the increasing opportunities from VR and indie game development I can already see other players trying to gain a share of the market to cater to those segments. Those players may seem less of a threat today but with the right merger and acquisitions its just a matter of time.
While Daz's efforts seem more fucussed on milking its existing customer base I am not seeing enough(or any) momentum in increasing the consumer base by tapping into the emerging opportunities which can increase sales and lessen the burden on buyers.
I think it's pretty clear that Daz3D's strategy is to make things accessible and affordable to as many people as possible -- making Daz Studio Pro free is the most obvioius example of that strategy. I have no way of knowing how good a job they're doing except what I've heard anecdotally, but I suspect they have sufficient data to be able to estimate how much revenue they would sacrifice with lower prices. How much that investment is worth in the long term is harder to estimate, and harder still for me to guess at how well they do it, but again going by what I've heard anecdotally they do pay attention to academic research as well as the data they've collected over the years on customer turnover. Their return policy, customer service, and the way they always try to make right any mistakes and respond to complaints suggests to me that they do recognize the value of happy customers. So all in all, I don't see them as a company that just goes by what generates the maximum short-term profit, although of course they don't have the deep pockets to be able to not be constrained by cash-flow.
My experience is that it doesn't. On a bigger scale, selling an item at $15, versus selling an item at $7, the $7 item does not get twice the amount of sales. Maybe only about a 1/4 boost.
Edit to add: My experience is the base price is the least important factor on if a product will sell. The percentage discount is a factor, but the attractiveness of the promos, which creates product desirability, is the biggest factor.
Sigh! I so need a raise.. lol
Can't argue with that, I think we all do.
Pretty much all of this is based on a false impression that Daz is not growing the market. They have had a very active affiliate program since I started, so over 10 years. I see those links in the darndest places so I know it is active and works. And I see adds for them all over the internet. I know it is because they are keyed to me and my interests but it does indicate that they are spending add dollars.
As far as the game market goes. It is and remains pretty much a whole different ball of wax and in many cases opposite from what this market seeks. Lower poly count and texture size as an example. That is why they started Morph. Because the products needs for gaming are different than people who may be doing print or other large scale images.
DRM has nada to do with prices since the prices that we see now were what was in place before they ever even breathed a word about DRM.
Looking at this thread made me look back at my catalog, to see if indeed I too had raised my prices. It turns out, that actually the prices have been pretty stable over the last few years.
But in checking this out, I also realized that the asking price for a product is purely anecdotal.
I did the stats over the last 20,000 sales I made. The actual price at which an item sells is roughly 55% of the actual asking price.
I think I need to raise my prices.
Well, the obvious solution to make artists and buyers (but probably not DAZ Store) happy would be to create a better brokerage that didn't take half of the creator's profits. I'm sure DAZ store wouldn't go for it, but, perhaps they take half the profit soff of the first 100 units sold, and then after that the cut is lower. A sort of tier pay system which might reward higher volume sellers with a bigger cut of their own profits.
IS DRM still a thing? It seems to have virtualy died on the vine here as far as I can tell...
This is just what I've been going back and forth with myself the past few days. Justified or not, necessary or not, deserved or not, and whether it's been the past year or 2, the prices have gone up. At $10 or $11 for poses and props, $12 or $13 for outfits and characters, etc I tossed them in the cart. I've put the same items in various combinations in my cart the past few days then to wishlist and back to cart and just can't hit the check out button.
At $70 or $75 I would have thought twice but bought anyway. LOL But the same 6 items now are $96. So yeah, some will go on the wishlist. Or maybe all. My brain hurts. LOL
Thanks.
I buy separate shirts and pants (usually jeans) in real life. I guess my real life habits affect my 3D thinking. I do wonder how an "off the rack" (right term?) line of 3D clothing would sell though. Separates that could be mixed and matched. Even historic stuff could be mixed -- bodices, skirts, etc.
And I don't begrudge anyone adequate compensation for their work/time, either, although I blinked when the prices seemed to jump all of a sudden, from 3 - 5 dollars, on intro sale. Maybe artist profits are being eaten up by taxes. Lord knows, everyone else seems to be feeding the tax man, me included.
I don't think deleting geometry in Modo would affect the UV map either, although morphing would let me use the original texture maps, without manual re-import. And yes, connecting pieces and matcing polygon numbers would be something of a pain. But glad I can fiddle with vendor items in a modeler and not be disgraced if I post a render.
And the beautiful commercial texture sets are making texturing in DS easier.
That implies a 100% "successful" rate, but you mentioned "flop" products. I can't help thinking that some products are vastly more successful than 100ish in the first few days. DAZ's own major characters (Victoria, etc) must surely sell in the five figures to make any sense (perhaps over a bit longer than days).
Does Utah.gov report turnover or profits?
No PA with half a clue would go for it. Daz does more for its half than any other brokerage is capable or willing to do. And the very higher volume sellers your talking about giving a bigger cut are the ones who can and should have a higher asking price. That would be true no matter which brokerage they sold at.
This was exactly my point and I'd like to thank you for adding a more detailed explanation... I do actually have some knowledge of the numbers and most of what you say isn't too far off... Personally I think a) we're lucky that prices aren't way higher... and b) that the vendors deserve way more support than they sometimes get for the things they provide us...
Yes, I'm sure there are some that do better as well as flops, and since Daz3D gets their share of all of them they're revenue is much less volatile than the average PA's. The Utah.gov listing was just revenues, not sure if there are good estimates of profits floating around, but I've seen several estimates of revenues that are similar.
Congratulations on your 20,000+ sales!
With 63 items in your catalogue, I'd say you are in the upper range of Fixmypcmike's suggested success rate, to say the least.
Unfortunately, when it comes down to it, sellers and buyers will make their own decisions of what is affordable and reasonable to them to vend, and buyers will make their own decisions on what they can afford to pay. As that gap becomes wider some people will lose interest in the DAZ Store except when huge deals are going on.
I'm actually suggesting DAZ do this. And reward high volume sellers with a bigger cut of their own profit. I'm not sure why you suggest PA's would not go for that. But I suspect there are some that would.
Does anyone remember seeing any Encypted Coñnect only items during March Madness/April Anguish?