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Message: <blockquote data-quote="Zaruthustran" data-source="post: 989933" data-attributes="member: 1457">This is an interesting but incorrect observation that merits further discussion. Allow me to start:Distribution takes a lot of work. A *lot* or work. A lot of selling, a lot buying, a lot of warehousing, a lot of tracking, a lot of shipping. Manufacturers are not distributors. They're not good at distribution, and they simply don't have the expertise, experience, and infrastructure to do it themselves.Now, if you're talking about non-physical goods like software,  and software versions of movies (DivX), music (MP3), games (zipped EXE), books (PDF) and other media*, then you're right--physical distributors aren't needed**.But retailers are definitely still needed--manufacturers aren't set up with credit card processing, fraud detection/deterrant, security, and the incredible design and technical expertise needed to run a full-time retail web site. Not to mention the huge cost/investment required for bandwidth, customer service, and hardware.But in addition to the above, the biggest reason why manufacturers can't and won't make significant money selling direct is customers. Customers go to retail sites; very few go to manufacturer sites.And the middlemen will still be there, in the form of encryption and digital rights management companies, and in the form of storage/bandwidth/secure transmission companies. These guys are in effect digital distributors. Everybody likes the idea of selling digital goods (drastically reduced transport and warehousing costs!) but no one likes the idea of Bob Customer copying the digital good and sending it to 10,000,000 of his closest friends***.-z*Those file formats are not what would actually get used/sold, but they're the most recognizable.**Of course they're still needed. There will always be those customers that want to buy a box, even though the box contains nothing but bits printed onto a plastic disc.***Well, maybe Bob and his friends like that idea.</blockquote>

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