Not too long ago Glenn Reynolds said:
And although quite a few people have downloaded it for free (and even sent in donations), many of them have emailed to say that they’d rather pay cover price for the actual book than download it for no charge.
This seems to me to suggest that free downloads don’t do much to cannibalize actual sales.
I’m pretty sure Reynolds originally mentioned that he might need to reconsider the rules he learned in economics 101 when he originally posted, but that comment is gone now.
And this story is hardly rare… Cory Doctorow’s book has sold well. And while of course book downloads are very different from music downloads, but iTunes certainly hasn’t done bad. Hopefully this success will transfer to stuff like mperia as well.
Personally, I think the prices are still too high. There was a thread about micropayments on Margin Walker (last summer was it?), in which Andy from South Africa pointed out that while 10 cents to download an article might not be much to us in America, but in another country that’s a lot. But what if it was 10 cents for an entire book or magazine? Or 10 cents for a year’s subscription to a web site/e-zine? The idea here is to make up the sales in volume, Wal-Mart style. And with more and more people getting internet access, and outsourcing giving jobs and internet access to people who have never had money to spare before, there’s I think there’s a strong possibility for people to start global cottage industries using micropayment systems.
Also, Clay Shirkey makes a point that people don’t like being “nickel and dimed” and that subscription based models tend to be preferable. Not sure he’s right, look at eMusic. It used to be an all you can download service, now, like iTunes, it’s a pay as a you go.
more: Bruce Sterling on Somolia / Me: The digital divide, organized labor, and smart mobs / Digital Divide narrowing?