I think you've missed a reason for better than free. Namely that free permits massive consumption and so encourages indiscriminate consumption. Paying for something encourages the buyer to value the purchase. What you obtain too cheaply often gets esteemed too lightly.

Cheers, Jay.  Agreed, it's not that there aren't exceptional things out there for free.  It's just that it's the 'Exception'.  It doesn't have to be expensive at all, but typically, coming from someone whose been on the business, tech, sales end of things for years, a dollar amount, however small, indeed creates more value.  Additionally, I couldn't agree more that free stuff generally saturates quality usage and consumption.  It's the psychology behind it all - like the 'Perception' of $ - nothing more.

Let’s say you’re right and there’s nothing that can be done to protect copyrighted material on the web: obviously that’s going to make it very difficult for people to produce music, video, books, software, etc. and make money doing it. That will mean that all content will either be advertising for some service or physical product, or will be produced by amateurs with day jobs (day jobs doing precisely what, I wonder). To me that’s obviously not a good thing. The popularity of piracy pretty much proves that the professionally produced stuff is better than the free crap. Everyone knows you can get better stuff on BitTorrent than you can on YouTube and open source software sites. Why can’t anti-IP advocates at least be honest and admit this?

In any case, it’s not true that “the drive towards free” is inevitable. Computer technology makes piracy easier, but it also makes it easier to monitor. We just need to start taking it more seriously. It’s a lot like punishing counterfeiters. It’s pretty easy to make knockoff 20 dollar bills with an inkjet printer, but we don’t stop enforcing the counterfeiting laws just because counterfeiting is easy to do. We need to start treating software piracy and the like the same way. Just as allowing counterfeiting would remove the incentive for anyone to work for money, piracy removes the incentive for people to work to produce information and needs to be taken seriously.

Random dude, I totally agree with you.

Me too.

to Random dude, what u call piracy which is not the right word, started not because of the possibility of copying digital products but because how unfair the system of copyrights in music and movies is.  It's absolutely ridicolous that even after buying the original cd the public has to pay each time he or she listen to the same song. Do you pay the t-shirt you are wearing each time you wear it? No, are the musicians paying the copyright of the instruments they use, the dresses, etc. each time their song is played, nope.  If they would and if all were following the same rules then it would be a different story. So tell me why the public has to. And most of all how can u call piracy when u are actually paying the digital canon each time you buy a cd or dvd even if u use it to put your own stuff. Same applies for radios or music equipments....By paying the digital canon u are paying ..so how can someone say it's piracy.... Then another factor is that, where does the money go? Like it's well written and true in the article the public is very happy to pay the artist. But that's it, they want to pay the artist and the sound engineers,  not the vultures that have actually nothing to do with the music. Another point is the factor of quality, look at the movies...now is getting a bit better but for a decade they were really bad, because they didn't pay the writers they use the money for special effects and for crazy star fees, that may very well be a good investment in publicity but they kill the quality of the movies. Empty story without dialogues...So a lot of people just doesn't want to support a system where the talent (writers, good but not well known actors....) are under paid, and work in conditions of instability closer to slavery than else....the one way to say No thank you, we want quality is by not buying the bad ones. Also is not true that the internet is going against quality and music movie production, very much the opposite, on radios and cinemas they only show the blockbusters, but not the other 90 per cent of the movies and songs, while in the internet those movies do have a space and are seen ....Cinemas all have the same programs, and only bet for the ones with huge stars or publicity budgets, they don't take risks, as if the audience is stupid.  The rest of the movies goes straight to dvd if they are lucky...and not because they are worse very often is very much the opposite. (so who is really destroying the arts) Let's be fair and analyze everything in its deep connotations and consequences before taking  sides. Internet just gave the tools to act and not being passive victims of a faulty system. The public wants to pay the artists, but wants all of them to be paid all of them to survive and be able to live out of their craft and not just 4 of them far too much and nothing to the others. Not to mention that if we speak about copying, the first ones to actually copy and steal are exactly the big companies....By having a monopoly they can afford to buy for little little money when they actually do instead of just stealing, which is most of the cases,  songs, materials ideas etc etc from the unknown artists or programmers etc that are unknown and have no resources to legally fight back .... is that fair? They can but the others cannot? why? 

Well put.

Agree. Why do we assume inevitability of these bad things and surrender to them?

I trust that 11 years have corrected your views. You do not "get better stuff on BitTorrent", you get either the same or you get an alternative or a version. Different stuff is not always or necessarily better, it is only different. Making a 20 dollar bill with an inkjet printer does not produce a knockoff or a counterfeit. Words fail me, when I try to address your view of the issue.

YOU win the prize, Random Dude! Four years later, this describes October 2014 rather well:
"all content will either be advertising for some service or physical product, or will be produced by amateurs with day jobs (day jobs doing precisely what, I wonder). To me that’s obviously not a good thing."

“Better than free” is a colossal joke. The idea that musicians, movie studios, software companies, etc. will be able to keep producing high-quality information by selling tech support and T-shirts is totally batshit insane, and only fools believe it (to say nothing of the fact that the people producing the tech support and T-shirts need not have produced the original work in the first place, this removing even that measly incentive for innovation). It’s hilarious to read all these Warren Buffetts around the web lecturing productive people on how they need to “change their business models” when there are very few business models that can work on the basis of giving everything away, and never have been, which is why copyright protection came into being in the first place.

Why can’t anti-IP advocates be intellectually honest and admit that they are massively reducing the incentives for innovation by making it impossible for people to produce information for a living?

Why do you assume that musicians should be able to make a living by selling copies of their performances? It is a relatively new phenomenon, prior to recorded music, musicians made a living by performing live and selling sheet music. In 'Now and Then' books many of the old photos from 100 years ago show bizs with signs that say things like 'Support Live Music'. At that time recorded music was growing and fewer and fewer venues hired live musicians. The musicians at the time, who all made a living by playing live, were convinced that recorded music was the end of professional music or, more accurately, the end of their professional life.

Technology changes, biz models change, and it can really suck for the people caught in the middle when the change occurs. But talent is unique and there for valuable and there will always be a way to get paid.

Random Dude, the drive towards the free is not caused by IP legislation and will not be remedied by IP legislation. It doesn’t matter what anti- or pro-IP advocates do; digital properties will continue to slide toward the free, on average.

And here we are, six years after your comment, in 2017. A Taylor Swift MP3 costs $1.29, and two tickets to her live performances easily cost more than $500. Her music might not be to your taste, but many think she produces "high-quality information." Moreover, she seems to be making a living doing it. And she's hardly the only one doing so.

IP costs less than it used to, but the value of actual work (seeing Taylor onstage and performing, live, right in front of you) by talented artists has increased. Moreover, it's unlikely someone like Taylor Swift would have enjoyed her success without that cheap IP (not just song recordings, but YouTube videos, Instagram, Twitter, etc.) as a marketing device.

Do you still have a problem with "better than free"? It seems to be working out.

Thank you for a superbly written article! It is not often you come across someone with so much to say and such valid points, and who expresses it well. I also find the discussion one of the single most important ones. As a worker in the drug industry, you are right on spot about the cost of drug "copying", although there's exceptions, like drugs that have to be purified from the living bodies of real animals or people, which then rocket in price.

My idea of freedom: I'm live in Emacs; I spent time learning it and have fun with it, I use it to manage mails (via notmuch), feeds (via elfeed), ng (via gnus), notes (via Deft/org-mode), writing and managing any kind of document often exported via pandoc/LaTeX/etc (via org-mode), as a PIM, as a chat client, ... I'm feeling free. I have a fully-integrated environment, I own and control my data, I can process my data myself, I can customize any aspect of my "environment" and I can communicate and cooperate with other people on other systems without worry about specific application or version of the application or platform on both sides etc.

Today's? Well, someone push (sadly with success) the old mainframe paradigma named it "cloud" or "web 2.0" etc. You do not own your data, you can't customize your environment, only choose between "third party" customization witch in general means "skins"/"icon sets"/"fonts" or rearrenge toolbars etc. In the ancient (and still alive) time you send mails, multi-platform, text based, fully manageable. Today you use WhatsApp so you can work only on a limited subset of platform, communicate with a limited subset of applications of specific version, you totally depend on WhatsApp online services etc. Yesterday we write on newsgroups, contents is therefore user-made. Today we read websites. Yesterday we use RSS/Atom to "handle" the "flux of information" from "the internet", today we use aggregators so other choose for us. etc. Even this comments are on Disqus. If something on Disqus brake we have no local copy and no choice.

That's the different: not free on "money side" but free as in freedom on one side and a "golden prison"/"walled garden" on the other side.

Sorry for my English and the long post.

When copies are super abundant, they become worthless.
’
Counterpoint: Shakespears works, Mozart’s, net photos of wonderful art, the net itself, free and priceless.
………….

When copies are super abundant, stuff which can’t be copied becomes scarce and valuable.

Counterpoint: The more people who have access to countless free alternatives (e.g., free music), the less valuable, desirable, sought-after the uncopyable alternatives become. The law of friction (not worth the trouble!)or diminishing returns kicks in and there’s little need to seek out expensive, limited alternatives.

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I'm not sure whether this has already been brought up in the comments, but why are aesthetics not included in the list? I'm thinking of cases like free-to-play games such as League of Legends, Fortnite or Apex Legends whose business models consists of selling aesthetic upgrades and in-game assets that don't affect gameplay at all. They've proven to be extremely lucrative.

Also, isn't privacy and/or security a huge thing that many opt to pay for, even when free non-private/secure options are available?

In the case of music, Personalization and Findability are two sides of the same coin. Personalization is what fans want. Findability is what artists want. The 6 other points have been commoditized by Apple, Spotify, Youtube (and other smaller players like Tidal and Bandcamp). Whoever manages to solve personalization and findability together will win the battle for the music business.

This essay is sheer brilliance, Mr. Kelly. I have sent it to many people since I first read it and have gotten even more value out of it re-reading it myself today.

I base my future on it no less. Thank you

I’m sure that musicians want fans and are willing to provide some songs free but let’s face it . Musicals instruments are not free. Manufacturing a Cd is not free and costs have to be factored.It’s simply not worth it to record a CD anymore. In the meantime I’ll concentrate on the generatives while I’m waiting to eat or pay some bills. or perhaps before death those magical generatives will come and save the very poor and hungry starving artists. Generatives are good but so is selling a few tracks, a membership , an umbrella , a frisbee, a watch because Mp3s are dead. If that’s not possible Musicians should quit and sell t-shirts. Because economically right now it’s suicide to make a cd. unless you’re songs are about backsides.Oh here’s a new album title Generatives and Backsides. My personal theory is forget i-tunes. and let musicians deal with their fans directly.I-tunes is in bed with labels who really don’t benefit artist much. It’s better business for musicians and fans .It’s one big happy family You,your fans, and Paypal. Not you, your fans , apple-itunes, major labels , snocap and paypal.when the division is done their isn’t much left. Thanks kevin Peace!(smile)

If you are a musician, not a company how leave on top of them, you can publish your songs on various free streaming sites (like Youtube, Dailymotion, Vimeo, ...) having some non-invasive ads and ask for support in the form: "hey! You like my songs and you are a web-designer? Please help me making a good looking website to host my music, free of charge, downloadable in .ogg, .mp3 etc instead of being tied to a streaming service. If your songs are good you obtain a nice-looking website for free and you can pay a hosting for it with the small income from advertisements. You can put a "donate" button on you new site. If you are really good you get money from it+the *non invasive* ads. That's the path. Simply we do not need anymore music Big company. At least small recording studios scattered around the world. Make music is an art, not a business and should be rewarded as an art. If you make music for getting a Limousine, well, better chose another "job".

As a musician trying to get his product out I love this article because it speaks to me. One thing I’ve always told artist friends or bands getting into the business is; their product is no more valuable than a pack of cigarettes. What would make someone smoke this brand over that? What would make someone buy your disc over another and why would someone download your piece of music over another even if it is free? The truth is the only a handful of artists have ever made real money in the music business when you compare it the amount of people the business has buried. It is an industry based on failure. Technology only levels the playing field in regards to distribution (you still have to build a fanbase for longterm success.) The eight generatives I feel are essential to anyone looking to build a career in this business today. Yes, there are things that can be added or tweaked ever so slightly but for what it’s worth I feel like I’ve just been let out of jail reading this article. You’ve put into words what I had been feeling for a long time and I thank you.

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While the article is very old, it is also very current in that it addresses an issue that is still evolving. Comments made over 10 years ago are still just as applicable. In fact, some are more applicable now that time has allowed predictions, and hopes, to be proven or disproven by real life.

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The price of a music cd, is the same price of an itunes album download.

Free is over, the network is now a mirror of the real world. The network is now ruled by advertising companies i.e facebook, twitter, google.

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5 years later I find this. Evergreen content. What I don't get is how is it that everything is free when there are costs for creating running and maintaining the machines that copy everything? And the cost of electricity. The consumer isn't paying. But somebody is. Who is it?