Content Pricing Suggestions and Distribution Channels
The purpose of this article is to provide content creators insight and clarity around the pricing landscape for out-of-home VR, as well as the pricing options available on the SpringboardVR platform. In short, we help you answer the question "What should I charge for my content?"
First, a quick overview of the licensing options available on the platform.
- Price Per Minute (PPM)
- Operators are charged per minute of gameplay.
- Monthly (coming soon)
- A per station, monthly licensing fee.
- Yearly (coming soon)
- A per station, yearly licensing fee.
- Per Play (coming soon)
- A licensing fee for each individual play of the title.
Currently we are distributing content in two main channels, Entertainment and Education.
You have a choice to distribute to one or both channels. We recommend you opt to distribute to both channels for more licensing opportunities. Entertainment content is oftentimes used at EDU locations and vice versa (e.g., Beat Saber is being used on college campuses, and Number Hunt is being used in VR Arcades).
- The out-of-home entertainment industry, also known as the “Location Based Entertainment” industry or “LBE” is a broad category that includes everything from small arcades, movie theaters, bowling alleys, to massive amusement parks.
- A growing number of the LBE operators are offering VR.
- We’ve seen some wildly inflated numbers by industry analysts, but we have names and contact info for 1800 locations that offer some form of VR.
- Of this 1800, approximately 1200 are indie VR arcades while the remaining 600 are Family Entertainment Centers, escape rooms, LAN gaming lounges, etc.
Preferred Pricing Option: All of Them!
- Although a large percent of operators in the out-of-home space prefer Per Minute Pricing as it allows them to offer a range of titles and to pay for actual usage, the majority of them need both per-minute and flat monthly licensing as their decision making depends on the popularity of each specific title. By setting a flat monthly price you are also giving them the option to opt into floating licensing. The more options/flexibility you give to operators, the wider adoption of your content you can expect to see!
- A variety of Educational institutions are adopting VR and using SpringboardVR to access content. These include everything from universities, junior colleges, K-12 schools, museums and libraries.
- One thing that is important to note is that TODAY, many of these EDU organizations are not looking for deep curriculum integration or ONLY “educational” titles. EDU orgs are putting in a few headsets, or small labs and are looking to expose their faculty and students to this new technology. Oftentimes they are as interested in licensing traditional entertainment titles like Beat Saber as they are in licensing more subject specific titles.
Preferred Licensing and Pricing Option:
- Due to organizational rules and restrictions, EDU institutions find it difficult to use per minute pricing and most require monthly or annual licensing and pricing options.
Best Pricing Practices
The price point that operators are charging end users has started to stabilize at around $25 USD an hour. This price point allows operators to compete with other location based entertainment options and helps bring repeat customers. Operators are also realizing that paying more than 15% of revenue towards content is difficult with their margins. The average PPM on our platform today is about 6.2 cents. This gives context for our pricing recommendation of $.06 USD**. ($25 * .15 = $3.75 an hour / 60 minutes = $.0625)
Content creators can choose to license their title(s) at a flat monthly rate on a per station basis. Each title is of course unique, so it’s difficult to make a universal recommendation. Our overall recommendation is to price at a monthly rate similar to what you are charging for a one-time home purchase and/or at around $20-$30 USD a month.
Content creators can choose to license their title(s) at an annual rate, that is based on a 12 month rolling term. Our current recommendation is to price an annual license at a discounted rate compared to if they paid for 12 months of licensing on a monthly basis. How much you want to incentivize them to purchase an annual license is of course up to you. We recommend at least 10%-20%. So if the monthly license price was $20 USD, a 12-month license would be $240. 80% of that would be an annual license price of $192 USD. (So a $48 discount).