Friday 8 July 2016

How to remunerate appropiately the zero marginal cost activities

Zero marginal cost. A great chance and a great challenge


Nowadays, thanks particulary to the Information Technologies, lots of zero marginal cost products and services exist. Zero marginal cost means that we can offer this product or service to new client without aditional cost. 

That's a great chance to spread our product worldwide without expending money making it and sending it to the client. The product is already made and it can be sent for free though Internet. We can sell more and expend less. 

There are products, like music, cinema, writings or software that can be copied as many times as we want without aditional cost or effort. Compact discs, DVD's, traditional newspapers and books are no longer essential the make this products arrive to the client, neither the transportation means and the stores where buy them. 


Music store, a nearly extinct place


But also big challenges are related to zero marginal cost products. Besides the loss of jobs related with the fabrication, transportation and sale of this products, that before were not zero marginal cost products, the authors of these products have seen how they lost the control of the distribution of their works. Once this products are available, anyone can copy them and offer them to anyone else, without the author's consent. Piracy has been a very extended topic during the last years. Many music, cinema or books have been consumed absolutely for free. 



New remuneration ways are needed


Some years ago, we bought videotapes and compact discs because it was the only way to listen music and watch films. Now we can access to this product though Internet in a cheaper way. The payment ways has to change too. 

The consumer don't want or can't pay so much, and he don't want to pay for every song or every film he buys, he is lazy to do online payments. 

The right solution could be an annual subscription, not very expensive (around 5-10 euros) that gives access to all the products offered during that year. This low cost and the massive spread of this service could make a business profitable if we get lots of clients, who can be attracted by our low costs. 

Paying around 100 euros every year for annual subscriptions is perfecly affordable to anyone, and it allows us to award good professionals, who can continue creating new and better products.