
How To Profit From Selling Digital Products - acconrad
http://www.smashingmagazine.com/2014/07/10/how-to-profit-from-selling-digital-products-part-1/
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kasbah
This point, that making copies of software, comes at no direct cost to the
creator is often glossed over in articles that express amazement at the free
software and open-source movements. "Why would someone spend so much time
working on something and then give it away for free?" they ask and I
personally like Linus Torvalds' response that it was the only thing to do that
made sense to him.

It is a generous act but it comes at no additional cost to the donor and what
person doesn't want their work to be as useful to as many people as possible?

I believe it is also the key thing to consider in explaining the rise of
software piracy and the opposition to DRM. I hope to see a complete paradigm
shift in my life-time, in the everyday software-user, in understanding what
what they can reasonably be expected to do with a digital work, i.e. copy,
copy and copy again as it doesn't cost anyone anything.

A business with an 85% percent profit margin makes me uneasy and seems
exploitative to say the least. It is unfair to the consumer, it's just that
most consumers don't really know or care, they can always pirate it if they
can't afford it.

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Swizec
> This point, that making copies of software, comes at no direct cost to the
> creator

Support cost. Support cost will sink a business if they're not taken into
account.

That's why you should never sell software for less than $x0 to consumers and
less than $x00 to businesses. Because the support costs will eat you alive.

The only way you can get away with free is if there's absolutely no support
(your product isn't likely to see much use) or you like doing support as a
hobby (you _will_ eventually find a shinier toy).

Oh and I'm being very liberal when I say support. Even dealing with pull
requests can be a bitch. Even if you only get one or two a month. You _will_
forget to deal with them.

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dublinben
>Support cost

Support should be paid. It's an actual scarce good, which can't be easily
duplicated.

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RobAley
It's slightly more nuanced than that. Quite a few OSS projects seem to have
success with providing free community support forums, online documentation
etc. which still require some support but usually an order of magnitude less,
and then pay-for 1-to-1 support (paying both for itself as the scarce good,
and a portion to cover the "free" support maintenance costs). As always, that
"free" support has to be carefully constructed and maintained so that it works
in this manner.

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nawitus
The concept of "digital product" is flawed, as it implies scarcity, which is
obviously artificial and mostly based on regulation (e.g. copyright law).
Instead, you should sell digital services.

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FigBug
I'm not sure artificial scarcity is a bad thing, as it allows digital products
to exist. As a consumer I'd much rather have the option to choose between a
digital product and a digital service. Somethings like email and web hosting
obviously have to be a digital service. Things like games and music can be
either. And I usually choose the product since it'll exist long after the
service is gone. (Assuming no DRM)

I think we may be entering a digital dark age, where in the not too distant
future, a lot of the software of today will no longer be useable. There will
be no DOSBOX equivalent to play web games of 2014.

~~~
dublinben
Digital products don't require artificial scarcity. They can be given away for
free as advertising for the service. They can also be crowdfunded by a bounty,
and then freely released upon completion.

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corysama
When you figure out how to crowdfund the next Avatar/Game of Thrones/Last of
Us let me know. You might not care about them, but enough people did value
them enough to pay 100s of millions for them _after_ they were created. I'm
eagerly awaiting anyone to put forward a plan on how to convince the masses to
risk pre-paying 100s of millions for the creation of a new-but-equivalently-
awesome IP. It would not be a sensible risk proposition by any measure.

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csense
Market penetration of crowdfunding is still really low. Think of how many non-
tech friends and relatives you have who have ever crowdfunded anything. Now
think of how many people you know who have cable TV or go to movies.

Crowdfunding is still a business model with a lot of room for growth, whereas
cable and movies have saturated the market, at least in the USA.

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programminggeek
I always enjoy Nathan Barry's writing and his work provides a pretty good
template to reverse engineer a lot of good ideas, similar to what Patrick
McKenzie does as well.

~~~
poopsintub
I think the notion that we can all copy the 'template' of what Nathan does
isn't really possible. He writes really, really well. I don't know if I could
pull in an audience or sell books with what I would consider mediocre writing
skills. I'm a programmer after all. Maybe someone like myself should go for
it, if that's where there passion's at, then seek out a really great editor.

