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Google Patents Profit-Maximizing Dynamic Pricing
theodp writes "A newly-granted Google patent on Dynamic Pricing of Electronic Content describes how information gleaned from your search history and social networking activity can be used against you by providing tell-tale clues for your propensity to pay jacked-up prices to 'reconsume' electronic content, such as 'watching a video recording, reading an electronic book, playing a game, or listening to an audio recording.' The patent is illustrated with drawings showing how some individuals can be convinced to pay 4x what others will be charged for the same item. From the patent: 'According to one innovative aspect of the subject matter described by this specification, a system may use this information to tailor the price that is offered to the particular user to repurchase the particular item of electronic content. By not applying discounts for users that may, in relation to a typical user, be more inclined to repurchase a particular product, profits may increase.' Hey, wasn't this kind of dynamic pricing once considered evil?"
Please, how is this patent any different from real world bargaining? It's true it happens less and less now, but especially in third world countries bargaining is every day happening.. from tuk tuk rides to shopping.
Essentially Google just added digital into the mix. What a great discovery so worthy of patent! Google, you've changed.
This guy has bought every Madden game ever: No discount on Madden 13 for him.
This guy has never bought a Madden game: Give him a $10 discount to incentivize him.
Sounds great in theory. Sounds ever better in a Google ad pitching the idea. But the reality is that you're about to screw over your biggest fans and supporters. And if they get wind of it, you consequently risk LOSING some of your biggest fans and supporters. Penalizing your fans for being your fans could result in an epic backlash.
Now there are some fan groups (not mentioning any names here), whose members would probably respond to this kind of abuse with a smile an a "Thank you sir, may I have another?!?" But I imagine most people would be none-to-happy to learn that their loyalty to a product line has been rewarded with a backhanded insult.
Not to mention the fact that you can bet that some of the more unscrupulous and technically-minded people out there will quickly learn how to game the system.
BTW, I've never bought a Madden game. Can I get a coupon, EA?
What political party do you join when you don't like Bible-thumpers *or* hippies?
Description reads more like a sociology paper to me.
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You can patent something truly horrific, then not use your patent or let anyone else use it. Hopefully that's what they're going for here.
Not defending anyone that uses this pricing scheme, but what makes people think they have a right to something at any price? A strong sense of entitlement. Anyone familiar with sales knows that the more someone wants something the higher they'll pay. All the complainers are going to have used their own knowledge of someone's desires to benefit themselves sometime in their life, and they'll still remain self-righteous and indignant.
This is merely a new way to implement a ubiquitous and venerable concept: price discrimination. There is hardly a thing in the world that some man can not make a little worse and sell a little cheaper.
The one titled "keeping custom^H^H^H^H^H^Hsuckers from realizing they've been fleeced and getting mad at you"?
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Something is worth what someone is willing to pay for it.
If a vendor knows who is willing to pay what, they can improve profits while maximizing sales.
Hell, if I had a store and could identify people willing to pay more for my goods, I'd charge them more too.
Personally, I consider that evil. It is why I quit my job working for a payday loan company. They prey on poor, stupid people.
However, technically, it can also lead to lower prices for some people. If the real price is slightly too high for you, they'll lower it for you without losing money on every single sale and the lowered price will probably make you inclined to come back... at which point the price will probably go back up and like everything else just fluctuate like a pendulum.
And legally... I think it falls in line with what is accepted practice. Businesses have always fluctuated their prices based on consumer demand. This just lets them get more personal.
It still is considered evil, at least by customers. The people interested in doing this just hope the customers won't figure out what's up. Fat chance of that in this interconnected world. It won't take long for people to compare notes and find out about variations in pricing with no explicable reason for them (no coupon or discount codes used or anything like that). And once people notice, word will spread like wildfire. As will customer dissatisfaction, and people will shift to vendors who simply offer a straight-up price without trying to play games.
No wonder the US economy is tanking when all companies do are applying for and being granted stupid patents like thiis, and most the world don't care about these kind of patents anyway.
Take Nobody's Word For It.
This kind of price discrimination only works becasue the product is digital. Being able to buy from the guy getting the lower price is how this is avoided with physical goods. The solution is not prevent price descrimination. The solution is to allow resale of digital goods.
Don't be mumble mumble.
-- Two men say they're Jesus. One of them must be wrong. - Dire Straits
'watching a video recording, reading an electronic book, playing a game, or listening to an audio recording.'
People pay to do these things? Who knew?
Surely, RIAA / MPAA's wettest dream.
I hope against hope Google patents this and then makes it so it's impossible or impractical to license, while vigorously suing into oblivion anyone who dares try it without license. Otherwise, Google just became as evil as any other ordinary Evil Enterprise.
This whole "streaming" and "cloud" thing is just setting us up for robbery. Worse than we are now, I mean. I can see content one's already bought held hostage for further payment. That's what these assholes want, you know. They want it so every single time you read a book that you already bought you have to pay for it. Wait -- didn't someone already try this some time ago? DIVX. Failed, didn't it... it'll be easier to make it stick once all the content's in "the cloud."
Can you imagine? A Blu-Ray one already purchased requiring further payment every time one wishes to view it? That's why they want to do away with physical media, you know. They want this. It's that kind of thinking that makes me think physical media must remain the primary method of distribution. Files in a cloud are too easy to arbitrarily delete, too easy to control, too easy to hold for ransom. With physical, if you want my copy of Brave back, you're going to have to bust into my house, survive whatever punishment greets you when you do, and then make off with the movie.
Every time I read crap like this, I become more disillusioned with this modern world. I don't yearn for days gone by, what I want is for people to wake the fuck right up and say "enough with the gouging and pocket-picking, nickle-and-diming and outright robbery already!"
Heh. Fat chance. I know.
The "Civilized World" jumped the shark ca. 1973.
Airline tickets.
What Google is doing will drive the creation of dozens of startup businesses, all aimed at gaming the Google system.
Have gnu, will travel.
I looked into this years ago thinking about schemes to use public data such as home values to set different prices. What I learned was this is illegal.
http://en.wikipedia.org/wiki/Robinson-Patman_Act
I don't know if discounting can be used to effectivly circumvent either the federal or any similar state laws.. my guess anyone actually doing this is leaving themselves open for actions for discriminatory practice in at least some jurisdictions.
It is amazing anyone could be granted a patent on such an obvious endeavour with prior art stemming from the dawn of industry. Whats next patenting "dynamic pricing" within a tourist trap while a cruise ship is in port?
If such a system were deployed wouldn't people just create accounts where they act as if they are piss poor to get the lowest possible price? Machine algorithms are exceptionally poor at reasoning and dealing with false information.