Monday, January 3, 2011

Tangibles vs. Intangibles

"Online Ordering is the Greatest!" from

So, what intangible objects or services are you paying for on the Internet?

Me? None. Aside from the monthly fee we pay our internet service provider, we don’t pay a red cent for any intangibles on the Internet. Oh, we do buy quite a bit over the web – movies, books, computer parts and software, but as far as the intangibles go – mp3s, e-books, mobile apps, subscriptions, and such, we’re talking nada. Light chicken gravy territory.

We’re not in the norm.

A study released Dec. 30 by the Pew Internet & American Life Project shows that nearly two-thirds of Internet users “have paid to download or access some kind of online content from the internet, ranging from music to games to news articles.”

So does that translate into good news for individuals and businesses offering “intangible” objects for sale on the Internet? Well, looking at the data, it depends on what you’re offering.

Music and software by far are the most popular intangibles purchased on the web, with 33 percent of those polled saying they’ve made such purchases. Mobile apps clock in at 21 percent, with 19 percent and 18 percent, respectively, buying digital games or subscribing to the digital version of a newspaper, magazine, or journal.

The rest of the purchases are a mixed bag of this and that, ranging from 15 percent buying cell phone ringtones, 10 percent buying e-books and five percent each buying “tools or materials to use in video or computer games,” game cheat codes, and for access to certain websites such as online dating sites.

Of those purchasers, however, there aren’t many who cross lines. Forty-six percent say they’ve only purchased one kind of intangible item, with only 16 percent saying they’ve purchased sox or more types of content.

Pew’s data shows little by way of surprises. Those with incomes of $50,000 or greater were more than likely – in some cases, twice as likely – that those in lower income brackets to purchase music, software, and mobile apps online.

For those offering e-books or premium content – content held behind a paywall – the numbers are pretty dismal. Even in the highest income brackets, only 13 to 17 percent of those polled are buying premium content.

So what does all of that mean? Well, without some similar contextual data, not all that much. It would be interesting to know how many people are paying for “tangible” objects online so comparisons can be made between those who want to buy atoms – here, I’m using Pew’s descriptive words – compared to bits. Are fewer people buying e-books because fewer people are buying books in general, or is there a significant disparity between the purchase patterns?

Knowing what people buy, in addition, is only half of the story. Knowing why they buy tells a greater story. For example, I have wanted to purchase the soundtrack to Pixar’s “Up” for quite some time, but, apparently, Disney has decided only to release the soundtrack in digital form – no physical CD. I have not purchased the soundtrack because I prefer to have the physical media, even if I only listen to the music via iTunes. Why? It’s a tangible object. So a side-by-side study of tangibles versus intangibles would be more interesting, informative, and useful than a study that looks at intangibles alone.

This is especially important to small outfits like Uncharted, where we have limited resources to produce tangible and intangible items for sale to our Explorers. We have made a physical, hard-bound book as a priority, but given the likely high price of the book, what are our chances of getting the book sold? We’re also exploring intangibles like podcasts, photo sales, and workshops. Where do those fit in our audience’s buying habits and areas of interest? Knowing what Pew has found out gives us a general blueprint, but we can’t be sure that what they see in online purchasing will translate over to our different audience.

There is no Zen on the Internet. If the digital tree falls and no one is there to see it, it has not fallen at all, and the lumberjack has wasted time and resources felling it.

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