The Lazy Tax on 37signal’s SVN blog is right to the point. Digitally-delivered goods are often as expensive, or more expensive, than their physical counterpart. Being able to download your purchases off the web, from home, is very convenient. I’ve personally verified the digital-costs-more-than-physical phenomenon for:
- Kindle books (not all of them, let’s say 50%, it mostly depends on the novelty of the book, the author and the publisher)
- Videogames
- Music.
This is the perfect example of a market whose prices are tied to the demand and are not decided as cost+margin. Surely, bandwidth-intensive digital goods such as videogames, music and movies do have relatively high costs, because letting you download several gigabytes worth of content does not come for free. The cost is probably around 2¢/GB. If you consider that you could download the same item many times, the bandwidth cost becomes significant, and probably not too far from posting a DVD across the world. But yet there is no CD/DVD to manufacture and package, no paper to produce, print, bind and shrink-wrap. Most importantly, digital goods don’t have the risk of lying there unsold on the shelf. In the end, producers are making good money, the environment is spared several tons of plastic/paper to produce (and dispose of, at some point), and we’re happy because we don’t have to rip new CDs just to put the music on our smartphone or digital player. I wouldn’t call it a tax.