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Does app price discrimination work?

My company makes camera equipment hardware, that is controlled from our app. Now we were thinking of selling the hardware with all the functionality built in, but without the app the functionality is limited, and only one feature can be used. Selling the app additionally to use the rest of the features of the hardware is the additional revenue driver.

The hardware with out the app is geared towards venues, it would work just fine for them.
The hardware with the app is for different markets entirely, because of the other functionality.
App Price Discrimination comes into play because we are charging for the app so it is applicable to more than the venue market.



7 Replies

Lawrence I Lerner
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Lawrence I Lerner Entrepreneur • Advisor
Digitalization and Transformation Coach
Apologies but it's not quite clear to me, what your question is. Especially with the App Price Discrimination subject line.


Armand Sepulveda
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Armand Sepulveda Entrepreneur
Co-Founder & CEO at Dycap Media Solutions, Inc
Sorry for the confusion,
Is it effective to sell hardware that has all features built in, but limited without our app.
Then charge a subscription for the app. to utilize the rest of the hardware features.

The hardware with out the app is geared towards venues, it would work just fine for them.
The hardware with the app is for different markets entirely, because of the other functionality.
App Price Discrimination comes into play because we are charging for the app so it is applicable to more than the venue market.
Ilan Komarovsky
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0
Ilan Komarovsky Entrepreneur • Advisor
CEO at CREMESO - Green Screen Technology Solutions for Film, TV and Broadcast Media | Reducing Production Cost
I am well familiar with the broadcast/video market, but i am not sure i can suggest anything as it is not clear enough. Can you provide more details on the HW / SW features and who are the end users.
thanks
Armand Sepulveda
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Armand Sepulveda Entrepreneur
Co-Founder & CEO at Dycap Media Solutions, Inc
The HW is a camera mount that allows for third party cameras, once mounted, to be programmed for image tracking. There is no app in this situation.
The HW also has the ability for network control (multiple camera mounts being controlled at once) and program movements built in. However features outside of image tracking cannot be utilized with out our app.

The first case scenario where only image tracking is used is geared towards venues (We're starting in schools) so more class video content can be posted/streamed online.

The additionally features on the app. are for event photographers and videographers. Example: a wedding videographer could use the networking capabilities and image tracking to be a one-man camera crew. All are controlled from our app.
Lisha Hannafin
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Lisha Hannafin Entrepreneur
Co-Founder and board member at Piston & Chain
Hi Armand, It sounds like you should consider licensing to the hardware manufacturers. This allows you to bring in revenue and to pursue revenue from many sources. Be careful on your pricing though as you dont want to be in a situation where you compete with your own technology. I would also avoid any exclusive license which limits your ability to pursue new customers in your target space. This strategy allows you monetize on your technology bringing in revenue to build new products. Happy to share more if you like. Lisha [removed to protect privacy] Sent from my iPhone
Bridger Jensen
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Bridger Jensen Entrepreneur
Owner & Founder at Venture Imagery
Photographers are technicians, and love using all the features. I think any type of photographer will get really turned off if they have to pay for the app, (especially if it's over $3). I'd build the cost of the app into the hardware sale, and promote the awesome app as a free selling point.

Assuming that the hardware is more pricey then the app, the small amount you hide in the HW fee will in nearly invisible compared to making them fork out an extra few $ for the app.
Photographer's also thoroughly review things online before they buy. They practically deem their hardware to be akin to religious relics. The first thing that bloggers and reviews are going to point out is the extra fee for the app.

Also what are the competitor(s) doing? Whatever it is- beat it.

Let me know if you need another field tester. Sounds like your project is a winner. :)
Karl Schulmeisters
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Karl Schulmeisters Entrepreneur
CTO ClearRoadmap
Also - you will find someone will do an open source hack for the platform and then you've lost a large part of the app marketshare as well. Differentiated pricing might work instead for different levels of performance quality
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