How To Profit From Selling Digital Products | Hacker News Reader

How To Profit From Selling Digital Products

smashingmagazine.com

70 pointsacconrad21 comments

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.

> 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.

It's very, very common that open source developers will provide zero support for their products. That's almost part of the open source ethos, where someone starts as a core dev, eventually moves on and then the project is picked up or forked by the next person. If a product becomes sufficiently popular, the support gets provided by the various volunteer armies in IRC who provide free tech support for nothing more than the pleasure of berating strangers that they are helping on the internet.

Most of the successful open-soure projects that I have encountered have the main dev providing support through email lists and/or IRC. There is normally a community too but the main dev will know the most about the project.

I can't agree with this enough. I built software/hardware for a computer accessibility company. We helped people with disabilities (i.e. motor, cognitive, etc.) use computers and be productive. Clients/Schools/Therapists would pay for a license and then expect/demand continual support forever and ever and the company I worked for didn't factor in the support.

I love the work, I love the impact, and I would absolutely love to go back in and help, but until there's a better (or even sustainable) pricing model I can't go back because it's unfair. I'm not even saying it's unfair for the developer, I'm saying it's unfair for the end-user because they have this expectation of what they're getting for their money and when they don't get it, they'll feel cheated.

For example, we had clients who were upset when we could not support OS 9 systems (this was in 2011) - this would be the equivalent to expecting support for Windows 95. It was unrealistic, but our clients had been using the solution reliably for that many years and it literally became a way of life - upgrading could mean re-training a way of life.

In the App-based economy it's simply expected that when someone pays $0.99 that the app will work on their phone for as long as they keep that phone. I'm amazed by the companies/developers who are able to make a <$5 "work".

>Support cost

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

It should be paid, but more often it's expected. Users are like that.

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.

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.

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.

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.

If there's no copyright, what's to stop OTHER people from giving away someone's digital products for free?

I mean, I put all my books for free online. But I'd still rather be able to prevent others from using them commercially. I'd never have written them if a better funded competitor could just take them and provide them for free and outrank me.

http://lsathacks.com/explanations/ is my free stuff.

http://levine.sscnet.ucla.edu/general/intellectual/againstfi...

You haven't addressed my point. The parent comment was arguing that I could give away my material for free as advertising for services.

I pointed out that I couldn't do that without intellectual property, as someone else with a larger platform could give away my material for free.

Does that book you linked to address this point?

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.

Obviously companies are not crowdfunding much stuff if they can use regulation to increase profit.

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.

Sure, artificial scarcity isn't required, there are lots of ways around it as many alternative business models have shown. My argument is they aren't always better. When you bring advertising into the equation, the end user is no longer the customer. And the incentives become more page views etc rather than designing a product the end user desires.

I don't see the problem with having a hybrid system. Just because some music os sold as MP3s, doesn't stop anybody from releasing crowd funded music.

Selling digital products is just a way to crowdsource the service of digital product development.

It's even more beneficial to the consumer than something like Kickstarter, since they get to see the finished product before deciding whether to kick in funding.

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.

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.

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