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Toward an evolution strategy for the digital goods business

Stephen Bradley (Harvard Business School, Harvard University, Boston, Massachusetts, USA)
Changsu Kim (School of Business, Yeungnam University, Gyeongsangbuk‐do, Korea)
Jongheon Kim (School of Business, University of Bridgeport, Bridgeport, Connecticut, USA)
In Lee (School of Computer Sciences, Western Illinois University, Macomb, Illinois, USA)

Management Decision

ISSN: 0025-1747

Article publication date: 2 March 2012




The purpose of this conceptual paper is to provide a typology for classification of the digital goods business (DGB), analyzing its characteristics with selected cases, to suggest an evolution strategy appropriate for today's digital business economy, and to address the research implications.


Based on a focus group interview, the study identified and classified the DGB models into four types in terms of sales channels and service methods, and further proposed five evolution strategies for the DGM.


The paper proposes five evolution strategies for the DGB: from streaming direct to streaming intermediary; from download direct to download intermediary; from download intermediary to streaming intermediary; from download direct to streaming direct; and from download direct to streaming intermediary. These evaluation strategies will be suitably applicable to the type of digital goods for which a business strives.

Research limitations/implications

As the study is exploratory in nature, further research will be required to empirically confirm the findings of the underlying study regarding various DGBs, such as software, games, and movies. In addition, as the proposed typology reflects only the current state of the DGB industry, a further elaboration of the typology may also prove necessary in the future as technologies and the DGB industry evolve.


Providing a useful theoretical foundation for future DGB studies and valuable insight into practical applications in the ever‐growing DGB field, the paper delivers transitional strategic insights based on digital goods taxonomy. This strategic implication can be applicable to analyzing and explaining current DGB cases.



Bradley, S., Kim, C., Kim, J. and Lee, I. (2012), "Toward an evolution strategy for the digital goods business", Management Decision, Vol. 50 No. 2, pp. 234-252.



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