Fixing Digital Software Distribution

Jeff posted on The Sad State of Digital Software Distribution.  I think the path to fixing it is pretty clear.

The root of the problem is that most mainstream software is sold at retail.  Nobody is willing to lose the retail channel.  So if you can’t beat em, join em.

If Best Buy were made a partner in digital distribution instead of a part of the chain that the developers are looking to cut out, then they’d be willing to help out.  For example, by having a Best Buy digital software store that sold things cheaper than in the store, but with the same profit going to the store.

So if the store’s cut of a $50 product is $15 and the developer’s is $15 (with the rest being manufacturing and distribution), the product could be sold online for $40.  The store would get their $20 and the developer would get $20.  The store gets more (because they’re providing the digital download service – the developer doesn’t have to run that) and this motivates the store to get into digital distribution; the developer gets more, and consumers are encouraged by the store (a sign on the shelf “Get this product for less at downloads.bestbuy.com”) to buy the digital version.

There are so many people that need to agree to a system like this that it’s very difficult to implement – what we need is someone to do for digital software sales what Apple did for digital music sales and cut those deals that enable this new business.