The announcement on Spear's website notes that this the first time that a "global recording artist has offered virtual gifts specific to their likeness on Facebook." Frankly, I'm surprised it has taken this long. With a new set of rules dictating who makes it in the music biz, exposure and a social media presence are extremely important.
That, and of course the money. Facebook hasn't disclosed how much it makes off of the $1 virtual gifts it normally sells, but Jeremy Liew of Lightspeed Venture Partners has estimated the revenue from virtual gifts in the $35 Million neighborhood as recently as last September. This is double the revenue that he estimated Facebook took in from selling digital totchkes in January of 2008 and represents a significant motivation for a star like Britney to cash in on virtual gifts.In the previous study, Lightspeed Venture Partner's research indicated that "The most common size runs are 100,000 and 1,000,000, but they range as high as 10,000,000 and as low as 15,000." Given this data and assuming that Britney is pocketing $1 per gift, at the least she stands to make between $15,000 and $10,000,000 per item from this venture; though $100,000 per is a more reasonable assumption.
Conservatively, with the five virtual gifts available for purchase today, a sellout could easily net Britney $75,000 to $500,000 with nary a shaved head required!
Reasonable sales should be enough to help the star stay on top of her million-dollar-a-month lifestyle. Combined with the additional exposure that these gifts will bring to her current Circus tour you can't blame her for plastering her image on every available Facebook wall.
You might be asking yourself, "Aren't these virtual goods? Shouldn't the supply be endless?" Good questions, the reason Facebook limits the runs of goods with no inventory constraints is to make the gifts appear to have more value. If you could give a "Bear Hug" gift for eternity without it ever running out the value to both the gift giver and the gift recipient diminishes. But, psychologically, when that same gift comes from a finite resource it appears to be more valuable. So, basically Facebook limits its virtual good inventory to trick your brain into placing value on a digital good which is by all accounts easily duplicated and without limits. Judging from the sales data it's working!
If shelling out $2 isn't your thing, don't fret -- Britney will be releasing one free gift every month, so even frugal fans can celebrate the Circus that is Britney. Will you dip into your wallet for a Britney gift? If not Britney, than which superstar could get you to shell out for a virtual gift? Tell us in the comments.