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At the risk of sounding like a fanboy - Michael Masnick has introduced what I consider to be the most compelling formula for digital goods. Now whether he is right or not is hotly debated. But I think it is the most reasoned and thought out process I have seen yet and it applies to all digital goods in which the problem is that what was once a finite good is no longer the case and thus is impossible to force everyone to pay directly for that good.
Connect with fans, give them reasons to buy.
That is - find ways to make new fans, connect with them in a way that makes them want to buy your goods and services. Give them reasons to spend.
Within that model, there are many methods for both authors and publishers to form businesses and to make money.
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