14% of US broadband households would be interested in iTunes movie download
According to The Diffusion Group, only 14% of broadband households would be interested in an iTunes online movie download service for use on PCs or portable devices if titles were priced at $15 each. This compares to total interest of 23% at $10 per download – a 64% decline in interest when increasing the cost per title by only $5. TDG’s research found that the net loss of demand from increasing the price from $10 to $15 is almost four times the gain in demand from lowering the price from $20 to $15. In other words, at $10 per title, demand would have been optimized yet profits would have suffered, while at $20 per title both revenue and profits would have been optimized with little loss in demand.