Friday, September 3, 2021

How to Avoid Overspending on Streaming

Throughout this resource, I’ve often shared my opinion that you shouldn’t need to buy anything in order to get started with streaming. It’s highly likely that if you haven’t started yet, you already have the tools to go live in some way or another. But just because you don’t need anything in order to start your journey doesn’t mean you should never make a purchase at any point in your streaming career. Eventually, it all comes down to your mindset. Tech upgrades are often seen as fix-all solutions for streaming problems, almost as replacements for skill or experience. Many people also use the need for future purchases as an excuse not to get into Twitch broadcasting, or not to ‘get serious’ about it once they’ve started. These are limiting ways to view streaming, and they’ll make you dependent on spending your hard-earned money in order to go live. But there’s nothing inherently wrong with making stream-related purchases, as long as you’re viewing them from the right frame of mind. The difficult part, once you’ve come to terms with buying things to support your streams, is drawing the line. We’re natural consumers, and making one purchase can end up turning into several more. For many of us, making a few really big purchases or a lot of unnoticeably small ones can cause us to regret our spending habits at the end of the month. In this entry, I’m going to help you avoid overspending on streaming. 


The first thing to consider are expenses which have already been made and can’t be recovered. These are known in the business world as ‘sunk costs.’ If you already have a game console, PC, camera, or anything else used for streaming, these are part of your tool kit. If there are no future payments associated with them, then you don’t need to worry about them anymore. But sometimes, even when they’re already paid for in full, there are certain pieces of tech that almost seem to eat money. Meaning, the more you use them, the more it feels like you need to keep buying things to go with them. This happens to people with DSLR cameras quite often. They will buy the new camera, but then need to get a nicer lens. And when they have the lens, they need better lights to improve the shot. And then various adapters, and a better tripod, and so on and so on. The same thing happens when you get a VR headset and feeling like you need to keep adding accessories, or you splurge on a new microphone only to find that a bunch of other boxes and cables, along with wind screens, mounting arms and sound proofing might come in handy as well. You can see the pattern here. Certain larger purchases often continue biting us after the fact, because we keep getting nibbled on by hidden costs. These smaller supporting purchases can often double the price of the original item, if not more.


Be careful of hidden costs.

But the idea of ‘gateway purchases’ isn’t exclusive to streaming. This concept lords over every spending decision we make. As Dan Ariely and Jeff Kreisler point out in their excellent book Dollars and Sense, we can’t really measure the absolute value of any item on a day to day basis- we only ever perceive its relative value. Meaning, the value of one item compared to another. Car salesmen use this tactic to make us more receptive toward buying things we don’t really need while we’re on the lot. For example, we may be reluctant to spend a few hundred dollars on a stereo system if we saw it in a shop window while walking down the street, but when we’re already spending thousands on a car, that add-on feels like a drop in the bucket. It’s also why big box stores will show you the original price of an item next to its new lower cost while it’s on sale. Even when those ‘sales’ are happening almost every day of the year, and the items can be bought for that price more frequently than not, we’re still more likely to buy it when we see what it used to cost. It’s all because of how we perceive ‘relative value.’

This was never more apparent than when the department store J.C. Penney hired a new CEO in 2011, who introduced his ‘fair and square’ pricing concept. Under this new management, the stores eliminated the concept of something ‘going on sale,’ and instead just sold everything at the lowest possible sale price all year round. This seems like a nice idea, right? Everyone gets the same low price no matter what. The problem is, people didn’t want to get the same low price as everyone else. In one year, company profits dropped by a staggering 32%. The season in 2012 when those sales numbers were announced has actually been described as “the worst quarter in retail history.” The CEO was fired, and sales and coupons were quickly readopted into the usual routine. The moral of the story is that people want to feel like they’re smart or special for spotting a deal. We’ll even accept the inconvenience of coupons and timed offers, just to get that feeling. And none of us are completely immune to the siren’s call. I know I personally have an insane amount of video games accumulated over the past 15+ years of owning a Steam account that I’ll never get to play, which I only bought because they were 90% off during some sales event. I knew in the back of my mind at the time that I wanted to play those games, and bought them so they’d be available to dig into on some rainy day. Meanwhile, most of them have been collecting digital dust since I clicked the ‘Checkout’ button years ago. A similar thing happens on Black Friday and other major tech sales events. Sometimes we have a single specific thing we need to get during these sales, but most of the time we’re coerced into buying things just because we see that they’re going to cost less than they used to for a few hours. So be careful of sales, coupons and other deals. They can be useful if you’re buying something you’ve needed since before the discount, but they can be killers when you let yourself be tempted by the things you only want because of the new price. 


So again, while it’s fine to buy things you need for streaming, don’t let those purchases lead you down a rabbit hole. For those who have recently started working from home, it may be especially tempting to make a bunch of new purchases to pass the time. But ultimately, it’s best to know what you’re trying to achieve on stream, and limit yourself to only the things that will allow that to happen. You should be able to get in a few dozen (or if you’re like me, a few hundred) broadcasts between making any major channel purchases. This will not only ensure you’re getting your money’s worth from each new piece of tech, but it’ll also help you to slow down and reflect on what you need for your channel. You may find new solutions that you wouldn’t have arrived at if you merely made a bunch of quick purchases without thinking. So avoid overspending on your channel, and let yourself focus on streaming for its own sake. 

No comments:

Post a Comment