Yes, You Have to Pay for That: Why People Buy and Sell Digital Downloads

From video games to apps to ebooks to music and movies, digital downloads have taken the global economy by storm. What once seemed like a waste of time and money to many is now a multi-billion dollar industry having an indisputable impact.

Yet not everyone is convinced that digital downloads are worth their price. After all, why pay to transfer 1s and 0s across the internet?

The question of why individuals and businesses sell digital downloads requires multiple perspectives and an understanding of internet history to properly understand.

This article aims to catch readers up to speed and answer once and for all the burning question: why sell digital downloads?

Contraband Community: The Early History of Digital Downloads

To understand the popularity and reasoning behind the digital download revolution, it’s important to look back at how the digital marketplace first started.

How Napster Ruled The World

To understand the popularity and reasoning behind the digital download revolution, it’s important to look back at how the digital marketplace first started.

Many believe that the first, or at least most popular, instances of digital downloading came from Napster.

Released to the public on June 1, 1999, Napster was the brainchild of Shawn Fanning and Sean Parker. Most may know the latter as one of the co-founders of Facebook along with Mark Zuckerberg.

Shawn and Sean believed that the internet should bring individuals together resulting in communities of people with common interests.

Napster, they believed, was the outlet for those communities.

One of the first known P2P (peer-to-peer) services, Napster a lot like the wild west upon release.

Since it was up to individuals to upload and download audio files, there weren’t really regulations on what could or couldn’t live on the network. Really, the only stipulation is that the file had to be an MP3 audio file.

To say that Napster was a success is underselling the software. Within months, millions of users were downloading and exchanging files. Soon, other sites like Limewire and Kazaa attempted to capitalize on Napster’s popularity.

Though no site was as successful as Napster, anyone with a cursory knowledge of internet history knows that things didn’t stay perfect forever.

Metallica v. Napster

The trouble began in early 2000 when thrash metal legends Metallica heard that a demo of their newest single leaked on the internet.

Understandably, the band was furious. None so more than Metallica’s drummer, Lars Ulrich who motioned to file a suit.

Ulrich believed that P2P downloading was nothing more than theft and that Napster could potentially bankrupt the entire music industry.

After a year in court, a judge ruled in Metallica’s favor, citing copyright infringement and racketeering charges.

Things only got worse for Napster, who endured another year of legal battles, this time from A&M Records Inc.

Eventually, Napster was forced to file for Chapter 7 bankruptcy after settling with Metallica and Dr. Dre. Their greatest asset is ultimately what brought them down.

And yet, through all of the legal battles and settlements, one thing became clear: people wanted downloads.

The Demand For Downloads: An Industry Response

It took a few years for industries to catch up to the digital boom. P2P services still existed, though they were filled with malware and low-quality files.

In 2003, Apple had a great idea. They’d learn from the success of Napster while avoiding its pitfalls.

Their aim was to sell digital downloads legally and for a reasonable price. They believed that the demand for digital goods was so popular that customers would have no problem paying for something they could get for free.

The audio quality was great, and consumers could listen in good conscience knowing they were supporting their favorite artists.

In its first year, iTunes was responsible for 70 million legal, paid downloads. It worked! Businesses finally had a smart, legal way to sell digital downloads! To this day it’s still one of the most profitable applications on the internet.

The Modern Age: Today’s Market

With a history of the demand and sale (or lack thereof, in Napster’s case) of digital downloads, it’s worth taking a look at today’s economy.

Why still sell digital downloads or download something you can still get for free?

Why Businesses Sell Digital Downloads

Businesses love to sell downloads for a few different reasons.

Primarily, because most downloads are a great source of passive income. Server space can be cheap and the profits more than make up for the costs.

Once a file is uploaded to a server, companies can more or less move on to the next project while still gaining income from users purchasing the file.

It also helps that there are no manufacturing costs for digital downloads. Companies can save huge amounts of money skipping traditional packaging.

Just how profitable can digital downloads be? The video game industry has turned overwhelmingly digital, 74 percent of all sales coming from a digital storefront.

Why Customers Buy Digital Downloads

It’s understandable that digital downloads are an easy way to turn a profit, but the point still stands. Why would someone pay for something they could get for free?

Believe it or not, digital downloads offer more benefits to the consumer than the business owner.

Take the issue of convenience. There’s no need to leave one’s home and head to purchase a physical good anymore. Simply log on, enter the credit card info, and purchase the download.

Many services like Spotify and iTunes allow users to access their content on a variety of devices, as well. A user can buy a movie on their desktop, then download it to their phone and watch it on the go.

There’s also the issue of price. Since there’s practically no manufacturing cost, digital goods can be sold at a lower price than their physical counterparts.

Businesses get to save, and in turn, so do consumers. It’s a win-win scenario.

Will People Still Pay For Digital Downloads?

Those who wish to sell digital downloads for can now do so in a cost-effective manner that in turn benefits the consumer.

So next time someone brags about their latest P2P plunder, bring up this article. There are plenty of fantastic reasons to support digital downloads from everyone’s perspective.

Looking to buy some digital downloads of your own? Be sure to check out our great selection of downloads. From repair manuals to movies, Pligg has it all.