Digital Products are intangible non-physical and distributed to consumers via digital networks such as the Internet. They represent informational forms such as text and numbers as well as more complex multimedia such as images, audio and video with discreet values (rather than analogue which is continuous and natural rather than invented e.g. a sound wave).
Digital products also differ significantly from traditional [analogue] products because:
- Intellectual property is a lot harder to protect as digital products can often be easily copied (see digital rights management)
- Cost to product/market entry is often significantly less
- Production and distribution costs are much lower relative to traditional tangible products
- They have high fixed development costs but close to zero marginal costs
- Low cost to establish production means that there are often limited barriers to market entry
Storing and transmitting digital products has involved use of CDs and DVDs, more recently disc (e.g. computer disk drive) and flash memory has been used. Increasingly products are sent directly to consumers over the Internet direct to user devices e.g. eBooks and mobile apps. Other networks can also be used to distribute digital products e.g. mobile networks.
Examples of common digital products are:
- Information based products e.g. data
- Software
- eBooks
- Multimedia products e.g. digital images, music and video
- Augmented reality – computer generated layered over real world environment e.g. Google Glasses
- Digital signage
- Digital art
- Digital services – e.g. a remote healthcare platform
In recent years, the development of new digital products has had a significant disruptive effect on many traditional markets for example the music industry. For example, the global music industry has had to adapt to significant disruption caused by the changing nature of music in terms of compression and transmission.
Future digital products may digitize the remaining human senses of touch, smell and taste.