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TheStreet Open House

How to be a Collector in the Digital Age

NEW YORK ( MainStreet) -- The digital revolution has forced businesses and consumers to rethink their views on everything from copyright issues to the future of privacy, and now we may be witnessing the next big dilemma: How exactly do you make a digital collector's item even a geek would covet?

Just 10 to 15 years ago, the question would have been largely irrelevant; consumers mostly stuck to buying analog products. Throughout the 2000s, though, consumers ramped up digital purchases to the point where e-books now outsell paperbacks, and more than 50 million digital albums are bought a year -- a fifth of all album sales. But while our consumption of digital products has changed, the way we assign value to them generally has not.

Kindlegraph lets authors create a digital autograph to send to e-book buyers -- one way businesses whetting the interests of collectors online, where typically everything is the same.

By definition, there is no such thing as a "first edition" e-book or an MP3 CD with a limited printing, since digital items can be duplicated an infinite number of times. There is no potential for one digital item to be worth more than another based on the condition it's in or the year it was made, since all digital items age the same -- that is to say, they don't age at all. In short, there is nothing that fundamentally differentiates digital products in a way that would qualify them as collectibles, at least in the way we traditionally use the word.

"Digital information goods, such as music files, have traditionally been exact carbon copies of each other," says Vili Lehdonvirta, a researcher at the Helsinki Institute for Information Technology who studies consumer online buying behavior. "Even if you release a limited-edition version of a digital album it can be copied, and the copies are indistinguishable from the original."

Several businesses are toying with ways to create digital products that mimic the feel of traditional collectibles, either by customizing the item for specific users to make it one of a kind or by imposing an artificial limit on the number of copies that will be sold and the amount of time for which it's available, to make the item seem rare.

Why we need collectors items
For a consumer, the main draw of a digital collectors item, like with any traditional collectors item, is simply to differentiate oneself from others, according to the consumer researchers we spoke with. To this one might also add that the collectible is seen as having more authenticity, an all-important word to the collector.

"In the old days, one would limit the print of a painting to 10 or 20 copies because each would be seen as more authentic and closer to the person who created it," says Ravi Dhar, a professor of marketing and psychology at Yale University. "Things that are authentic are always seen as more valuable."

That increased value isn't just important to the consumer, though; it is an essential component of the business model for many retailers, and one that needs to be addressed with digital products just like with physical items.

"The reality is that more and more products will migrate into the digital world, and anything that can get digitized will be digitized," Dhar says. "So the question is, when this stuff does get digitized, how do we create a sense that one version is worth more than another rather than getting stuck in the commodity mindset that they are all exactly the same?"

We picked out five businesses and artists who have created unique digital products customers may be willing to pay more for, or at the very least, that promote a closer engagement with the brand. These may just be what the collectors items of the 22nd century look like.

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