The Future of a Digital Goods Distribution

How will buyer-seller relationships unfold in the future? New digital distribution channels are needed in today’s world, where creating and publishing content is an option for everyone, but selling digital downloads remains a challenge. As more up-and-coming content creators appear, the problem becomes more serious.

Simply put, if I like Dave Brubeck, I’ll exclusively search for his music. However, if you are not Brubeck or Rihanna, you’ll struggle to be noticed because nobody’s heard of you, no matter how brilliant your music may be. A presence on Amazon or iTunes isn’t always enough if your buyer doesn’t know you exist.

You can certainly publish digital downloads on your blog, but who’s going to buy your book or music there? Your friends and family might, just to cheer you up. If your blog receives tens of thousands of unique visitors a day, that’s another story entirely. But in most cases, it’s just not that simple.

So, it’s clear that we need new digital distribution channels which support new types of relations with the rights holders — including modern payment and copyright verification methods. It’s critically important for these digital distribution channels to protect the interests of all people involved, from the initial digital goods creators to the consumers.

Digital goods distribution platform could be the right solution to this increasing problem. Honestly, it seems quite strange that no one has thought about this concept before. Specifically what I’m referring to is the opportunity to create an alternative distribution system powered by social commerce. With the right approach, all stakeholders — content creators, buyers, rights-holders, publishers, and marketplaces, could benefit from this new approach.

We covered the ways sellers and buyers may be able to find each other in a vast ocean of digital downloads, which expands more and more each year. This explosive growth of digital goods and content creators has to lead to both new opportunities and new questions. We certainly can sell digital products in millions, but do we know how to handle billions?

It’s clear that we consciously or unconsciously buy because of word of mouth recommendations from friends and coworkers, instead of technological or marketing efforts. But what I find even worse is that there’s a great number of content creators and content we’ve never heard of. You won’t find them on the first page of search engines, local search, or major shopping sites.

There are many marketplaces, but this does not solve the problem discussed above and in my previous post. I believe these problems can also affect the biggest players in the content market. There is one company I like more than others, and I deeply respect its founder — Amazon. What Jeff Bezos did will go down in history as more and more buy from Amazon. It’s certainly a unique organization. However, if you look at the issue from a slightly different angle, it’s clear that Amazon and other power players aren’t prepared to meet the market’s current needs now or in the future.

There’s no question these brands could reconstruct their business model. However, no one can safely say if it will happen or what consequences it could have. Even today, it’s not always clear what major market places prioritize. Is it the distribution of material goods, the production of gadgets, educational programs, or centers for software development? How do they see their long term strategy for dealing with the constantly growing number of content creators?

If we look at new companies operating in this field, even more, questions come up. According to one organization conducting market research in this niche, there are no fundamentally new decisions for dealing with the issue of digital distribution. While some new brands are able to attract venture capital, they’re focusing on solving non-existent problems in my opinion. All they can offer content creators is a “buy” button which links to your product that you can place on your personal blog. It’s just a fantasy, pulled out of the context of reality.

Their business model raises many questions as well. All of these companies take a commission on sales. Of course, there is nothing inherently wrong with this business model. In fact, I think in most cases intermediaries are only paid if there are successful sales. However, how can they hope to profit if their model just isn’t relevant? The majority of content creators have low-traffic web presences, which means there will be little-to-no sales. As a result, these intermediaries can hardly hope for much commission.

It is quite obvious that such problems don’t exist around payment exchange, ease of use, file storage, sharing among friends, or similar areas. I believe there’s really only one central issue that becomes worse with each passing year — “How do buyers get found?”.

Pulling from old solutions, like offering a button to receive payment, won’t solve the problem or stop it from getting worse. No one is going to buy anything from a blogger whose site traffic is 100 visitors a month. New brands creating marketplaces aren’t trying to solve the issue of helping content creators get found, but are only worsening the issue of helping buyers meet sellers.

For now, there is no distinct answer about how products will be sold in the future. However, I’m sure there will be a revolution in processes to increase benefits to both buyers and sellers. This article dives deeper into the issues we previously introduced on our blog, rather than solving them.

I hope we’ll see not just one, but several new solutions in this sphere. I can confidently say it’s a pressing issue. I talk often with content creators, rights holders, and digital sellers who all need new tools to launch and sell their products. The same applies to Copywrite issues, which will be covered in-depth soon.