Stop the Noiz

4 Ways Apple Is Like a Las Vegas Casino

Frank Fox - 2010.10.04 - Tip Jar

Mirrors on the Walls

Casinos want to keep you from leaving so that you spend all your money there. Casinos use mirrors on the walls to create the illusion that it is much bigger than it really is - and more importantly to hide the exits.

It is easy to wander from table to table and feel like you are not moving at all. This works best if you actually have a large room to begin with, to accentuate the effect of the mirrors. Better is to have two or more rooms, so you let people find an exit, but they end up in another room that is still in the casino. You can eat, drink, and play all day long without ever stepping outside.

Apple has its own approach to keep you from leaving, the walled-garden approach. If you buy a new iPod, you are sent to the iTunes Store. Sure, you can rip your own CDs using the iTunes software, but it is easier to browse through the music already in iTunes to make a purchase.

Next to the collection of songs, is the collection of TV shows, next to that are the movies, etc. You can wander around all you like; you never have a reason to leave.

You especially are not invited to connect your iPod to other online stores to make your purchases. All areas of the iTunes store lead back to Apple.

Purchasing Power

Casinos are designed to meet the purchasing habits of their customers. There are the $10 minimum bet tables, the $5, the $1, or the nickel slot machines for the old ladies in the flower dresses. Apple offers songs for as little as 69¢. When you factor in the fact that Apple only profits about 10% on each song, or about 7¢, then we have the equivalent of the nickel slot machine. Selling 99¢ or $1.29 songs are the next price jumps, then whole albums, TV shows cost more than music, new movies are even more, and so on.

Obviously, anyone who can afford a new iPod can at least buy a 99¢ song once in awhile.

Lights and Sound

With the recent addition of Ping, Apple has added the equivalent of flashing lights and sounds on the slot machine. The flashing lights, pinging sounds, and an occasional small jackpot give feedback to the casino customer to stay and play some more. Apple now gets to have its customer send each other little notes about what songs they just bought or why they like a certain band.

If Apple tried to supply the feedback directly by telling us what bands to like, we'd get pissed. If our best friends start sending us pings, that is okay. It is almost ironic that Apple chose Ping as the name of this feature, which is exactly the sound slot machines make each time you add money.

Enjoy the Experience

Both casinos and Apple are about the experience.

Casinos are sold as fun, exciting places to have a great time. Sure, they have shows that you can see if you pay extra, but mostly you sit at a table or slot machine and spend your money.

Apple is the master of selling the experience. Your favorite artists are on iTunes. The fun new games are at the App Store. The reality is that you sit plugged into a box and spend your money.

Seeing people with headphones on all day has to be a sign that people would rather be held by the Apple experience than listen to the world around them. (Truthfully, the sounds at my work place are general boring, but there is stuff worth overhearing once in a while.)

Viva Las Vegas

Don't get me wrong - if I win free tickets to Las Vegas, I'm going. I just thought it was worth pointing out that building a business that works a lot like a casino for the customer is not a bad business model. The customers are happy to spend their money. They never have to leave to get anything. And if they do want to leave, all the exits are hidden, so they forget what they are looking for.

If it was really like Vegas, all your spending habits would be closely watched and the profits from each room would be maximized.

Apple isn't like that, is it?

The other lesson is that Apple's business model is hard to beat. All those choirboys who want to tell us that Android is better or that we should buy a Zune can forget about it. Apple and Vegas are clearly the most fun that money can buy. LEM

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