🔍What is digital Product
A comprehensive guide and the real difference between digital products and digital assets
Last updated
A comprehensive guide and the real difference between digital products and digital assets
Last updated
What is a Digital Product?
A digital product is any item or service that exists in a digital format and is sold or distributed online. Unlike physical goods, digital products don’t require inventory, shipping, or storage, making them cost-effective to create and distribute. Examples include software applications, online courses, eBooks, design templates, and digital tools. Major companies like Microsoft with its Office Suite, Adobe with its Creative Cloud, and even Netflix’s streaming platform are all examples of highly successful digital products.
Digital products often solve a specific problem or serve a unique purpose, making them valuable to consumers. They are versatile and scalable, meaning you can sell the same product to multiple people without needing to recreate it.
Digital Product Pricing Models
Digital products typically follow several common pricing models:
SaaS (Software as a Service): A subscription-based model where users pay on a recurring basis (monthly or yearly) to access the product. This is popular in software companies like Dropbox, Slack, and Salesforce, where customers pay for continuous access and updates.
One-Time Payment: Users pay a single fee to own and use the product indefinitely. Examples include eBooks, design templates, or lifetime licenses for software like WinRAR or Photoshop (before Adobe shifted to a SaaS model).
Milestone-Based Payments: This model is often used in custom software development or project-based services. Payments are made at specific stages of the product’s development or delivery. It's common in B2B solutions and software development projects.
Freemium: Products offer a basic version for free and charge for advanced features. Many apps like Spotify or Canva operate under this model, allowing users to try the product before committing to a premium version.
Mobile Apps: Building any mobile app which
Product Deployment Models
Digital products can also vary based on how they are deployed and accessed:
On-Premises: The product is installed and run on the customer's own servers or computers. This was common in the early days of software, with examples like Microsoft Office or SAP, where businesses managed the product internally.
Hosted: The product is hosted on a third-party server, and users access it remotely. This has become increasingly popular with web-based software like WordPress or Shopify.
Cloud-Based: The product is delivered entirely via the cloud, with the software and data stored remotely. This model is often used for modern SaaS solutions like Google Workspace, Amazon Web Services (AWS), or Zoom. Cloud-based products offer flexibility, scalability, and ease of use since users can access them from anywhere.
Why Digital Products Matter
Digital products are powerful because they allow creators to leverage automation, scalability, and broad distribution without significant overhead costs. They offer endless potential for revenue generation, as creators can sell the same product to multiple customers without duplicating effort. With the right strategies in place, digital products can generate consistent passive income.
While digital products are meant for sale or distribution to solve problems, digital assets are items of value that exist in the digital world but aren't always sold directly.
A digital asset is anything that holds value in the digital space, including websites, digital currencies, social media profiles, and content libraries. Digital assets often contribute to your overall digital presence or brand but don't necessarily require a transaction for ownership.
Examples of Digital Assets:
YouTube Channel: A YouTube channel with videos is a digital asset. It holds value based on its content, subscribers, and potential ad revenue.
Facebook Profile: Your Facebook or Instagram account is a digital asset. It represents your personal brand, connections, and potential influence online.
Website Themes, Templates, or Plugins: If you create themes or templates and list them on marketplaces like ThemeForest, those files become assets. They have value and can be sold or licensed to others, generating ongoing revenue.
Cryptocurrency: Digital currencies like Bitcoin or Ethereum are assets that hold value in the financial market. While they are traded like commodities, they are not digital products since they are not designed to solve a particular problem or offer a service.
Mobile Apps : Even mobile apps or any asset hosted on third-party market place which is not under your control is considered a asset. apps related to games, health or any category including your own business is still considered asset as it is not fully controlled by your team. and yet there are too many limitations when it comes to deployments updates and policies to follow from the android or ios stores.
While both digital products and digital assets hold value in the digital realm, their purpose and use are distinct.
Digital Products are typically sold or distributed to solve a problem or fulfill a need. They are often transactional in nature, where someone pays to use or own the product (like an app, tool, or online course).
Digital Assets, on the other hand, hold intrinsic value that may or may not involve a transaction. They represent ownership, influence, or future potential, like a YouTube channel, website domain, or cryptocurrency.
Example: A website theme you create and sell on a marketplace is a digital product, but your YouTube channel, where you build your brand, is a digital asset. Your Facebook profile or a collection of digital artworks is also an asset. In contrast, a subscription to software you’ve developed is a digital product because it solves a user’s problem.
While both digital products and assets play vital roles in today’s digital economy, our focus will be on teaching you how to create and sell digital products. Whether it’s a SaaS application, an online course, or a set of design tools, digital products can provide long-term value through scalable, recurring revenue models. By understanding the various pricing strategies and deployment models, you can create profitable digital solutions that meet the needs of your audience and grow your brand.
