A Model of Diffusion of Digital Information Goods: Roles of a Key Agent

Abstract

Digital information goods include computer software, music, movies, electronic version of newspapers and magazines, electronic books, video games, and other multimedia products. These goods are characterized by a relatively high cost of initial creation, a low cost in distribution through Internet, possible rapid updates, and a low cost (near $0) of duplication. The digital information goods play important roles in everyone’s daily life and work, restructure industries, and more importantly, provide great opportunities and potentials for digital content providers. On the other hand, the near-zero duplication cost also makes digital information goods vulnerable to digital piracy which results in huge loss in profits. As a result, developing effective marketing strategies which are able to manage the diffusion process, increase profits, and accelerate diffusion speeds becomes an important task for the digital content provider today.