Digital technology has a very specific cost structure: it is very expensive to develop a specific product as this requires major investments, and we cannot simply half-develop it.
However, making high quality copies of the developed product and distributing them is relatively cheap.
Thus, it is very economical to serve additional customers; the expensive part is the initial investment that will lead to the development of a product around which we can organise a business.
Commercial aviation
Similarly, a commercial aviation company must make a big investment in an aircraft if it wants to set up frequent connections between two airports. It is no use trying to purchase half an airplane, the company will need to buy the whole aircraft. However, serving additional customers – until the plane is full – will work out very cheap for the company.
Naturally, the huge reduction in the costs of copying and distributing the products and services developed with digital technology has led to significant changes in certain industries.
A typical example is the music industry, which was based around control over the copying (understood to mean a copy of a similar quality; with analogue technology, the sound quality of a cassette tape copy was far inferior to that of a record or CD) and distribution of the product (primarily through specialised shops).