Management & Finance

Digital Assets: What Are They, And How Are They Sold?

Digital assets, often called digital content, are products that can be consumed via an electronic handheld device or used online.

The forms digital assets take vary greatly. Digital content might be auditory, such as a song (Apple’s iTunes) or ring tone for your cell phone; it can include media like streaming video, movies or online TV (MobiTV or Joost). Then there are entertainment options like online video games played via broadband-enabled gaming consoles (Nintendo, PlayStation 3, XBOX 360) and sites that allow the creation of digital content like karaoke (Ksolo.com). Finally, digital assets can be streaming downloads of any type: video on demand, software, e-books and more.

Although the list is wide-reaching, it’s still just a sample of ever-growing possibilities. The opportunity to sell digital assets has never been more exciting than right now.

The compelling question is how exactly can an entrepreneur monetize his/her digital assets?

A few basic guidelines provide a framework for making money through digital asset sales:

Possess the right to sell the asset

This sounds like a no-brainer, but it isn’t. Do you own the asset or have you negotiated the right to sell it? If you do have the rights to the content in question, it’s important to understand the digital rights management (DMA) implications. DMA is technology that allows content owners to control who has access to content — for example, media files on the Internet — and how that content is used. This is a big issue that we’ll cover in detail in a future article.

Provide an intuitive experience

It’s critical to offer an easy-to-use site that is more about function than form; functionality is king. With that as the priority, it’s still possible to plan for and execute an up-sell and cross-sell capability. Additionally, enable a robust search function to ensure your library of search terms is active and growing.

Whenever possible, offer your guests options. Consider a subscription model with varying tiers of content. This helps create recurring revenue streams. Keep in mind that those costs should be transparent to the online guest.

Another possibility is a pay-per-view option that allows content to be consumed in eight-hour increments as opposed to the standard 24-hour period. This allows guests to enjoy the content within a limited frame of access at work or home. During the last eight hours of the day, most people sleep and therefore don’t see total value in a 24-hour offer strategy.

Simply put, enable visitors to enjoy your brand or content in a way that is relevant and appealing.

Determine your business model

Web 2.0 initiatives have facilitated many creative business structures. For example, at the independent music store Amiestreet.com, the market interest drives the price of the asset. The cost to download songs at this site starts at zero and increases as a song becomes more popular.

Consider a dual revenue stream

A site can maximize revenue by having multiple revenue options. If you plan to have ad-based revenue for your site, create one tier for visitors willing to view advertising in exchange for free content. Offer another tier that allows guests to avoid seeing ads if they pay a monthly fee. Again, the goal is to give the guest options.

Enable more than debit/credit cards

Accepting only debit and credit simply puts handcuffs on your own online initiatives and reduces your online revenue potential. Look at expanding your online payment options.

Accept micro payments as appropriate

If you deal in smaller sales amounts (less than $5, traditionally), make sure your payment processor has the ability to aggregate payments, thus increasing profits. You do not want the revenue to eaten up by transaction costs.

For each category of content listed at the beginning of this article (music, video, e-books and more), there are “best practices” to help monetize the digital assets. Additionally, there are online best practices from other verticals where the sales process is far more complex (travel, for example) that could aid conversion for the digital assets business. We’ll explore best practices for monetizing various categories of digital assets in future articles.

Practical Ecommerce

Practical Ecommerce

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