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[AllisterH]

Originally Posted by resistor

I think we're waaaay overthinking the loss leader analogy.

The concept of loss leaders originates in the world of physical merchandise, where there is a (relatively) quantifiable cost-per-unit. In that scenario, it's pretty easy to say that a loss leader is a product sold at or below cost with the goal of encouraging the sale of other products with higher profit margins.

This is somewhat skewed when talking about the digital realm, since it's impractical to quantify an actual cost-per-unit. .

????

Why wouldn't there be a cost per unit. Presumably as gameprinter points out, you're still paying people to create something for you ...the only difference I can see is that you won't have to sell as many copies and/or have a high price.

There are sunk costs in a PDF product but the only difference is that each copy of a PDF doesn't also have the costs of actual physical production.

Every unit sold would simply drive the cost per unit down until you actually eliminate the creation costs and everything sold after that was pure profit...

Of course, there's the issue of royalties as I know Harlan Ellison always "insists" artists (artists in the sense of creators of art be it books or actal art) should get a royalty style agreement where at the least, if a product proves to be wildly profitable, they get a cut of said proceeds.