Considering the Value of Digital Goods

I tried to post a comment on Chris Miller most recent post on Unquiet Desperation. He asks some excellent questions about how we calculate the value of creative works if we acquire them in digital form versus tangible form. I say tried because his commenting system foiled me attempts to comment without having to authorization or register my identity or some such which I cannot be bothered with at the moment. Besides, what started as several random thoughts, really is now the length of its own blog post.

Go and read his post first then come back and read my comments below.

On loss, if I have not opened a physical copy of a book in years, that might speak to it also making its way to the real world kipple pile. The cycle time may be longer, but I don’t think the fact it is a durable item means it automatically gets a pass. Conversely, I love that for CC-licensed works if I do lose my copy, I can instantly replace it from the source. I find that quality of it much more valuable, maybe perversely so, than a comparable physical good. I can focus on enjoying it and not worry about the ongoing cost of curating it against inadvertent loss.

Material cost of production is zero? That may be slightly disingenuous. Sure, there isn’t the incremental cost of the container, both in time and materials, but compare that against the non-material cost of production. I’d say the time an author spends writing and revising far outweighs those last steps of turning it into a physical book and shipping to a reader or a store. In that instance, I actually see digital containers as a continuation of the commoditization of material containers. I’d almost say that the way most traditional distribution channels work, the packetization of a work into realized form is almost sub rosa to both the producer and the consumer.

Now the costs of distribution are something else altogether. I’d argue that those costs have already been decoupled from anything else. Ten bucks for a Kindle edition of a book? Really? When I can still order the paperback edition from the same source for a fraction? Am I paying the difference for the convenience of Kindle? I am may be particular sensitized to this case but there is a huge opportunity cost when the ability to refresh/replace my digital copy may be denied by DRM or similar schemes.

I’ll provide a counter example to your locust swarm. When I pay to support a digital work, like say “Sita Sings the Blues”, there are several things going on that actually ultimately increase my valuation of that work. If I make a donation for a download on Nina Paley’s site, I know for a fact I am directly supporting the creator. Not so when I buy the latest DVD from the bargain bin. There is also a much greater opportunity for conversation and connection. Points of distribution for digital goods can themselves be data rich, with links to more material on the creator’s work, context around the work itself, and the all important hooks into the larger filter that may lead me on to find similar works I am likely to enjoy.

Physical goods either don’t do any of those or do them very poorly, like sectional circulars at the local book store. Maybe, just maybe, I’ll be in the same place at the same time as an author, at an in-store signing, to have that conversation. Not likely and that increases the cost in terms of inconvenience, driving down the value compared to the low cost of doing the same thing online.

All that being said, I agree with the questions you ask, that they are worth asking. I just thought I’d share some more optimistic thoughts–opportunities–for digital goods to avoid becoming locust guano.

TCLP 2009-07-08 Inner Chapter: Leader as Law Giver

This is a feature cast.

In the intro a quick review of the family friendly game, Cheeky Monkey.

Listener Feedback this week comes from Philip Durbin who writes about using frameworks to help manage code complexity and Gladwell’s review of Anderson’s new book, “Free”.

The hacker word of the week this week is elephantine.

The feature this week is an Inner Chapter on when a leader must act as law giver.  This builds on my previous chapter on leadership.


Grab the detailed show notes with time offsets and additional links either as PDF or OPML.  You can also grab the flac encoded audio from the Internet Archive.

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