To backtrack a little bit....
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Originally Posted by Moejoe
Once the object becomes digital the price is reduced to zero. Digital objects have no inherent value, comparisons to atom-based real-world examples are pointless and do not work.
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This is incorrect.
When an object takes a digital form, the
distribution cost drops but does not necessarily fall to zero. The costs to distribute digital products is actually substantial: you need bandwidth, you need servers, you need IT staff, you need customer support, you need management. In theory you can distribute your product via some type of P2P environment, but in doing so you lose all control over quality, security and reporting. E.g. I can take a Harry Potter e-book, infect it with a virus -- or alter the text in critical passages -- and the publisher and/or author will be unable to alter the situation.
Meanwhile, you still have all the
other costs to deal with: research, writing, editing, copyrighting, marketing, promotion, management, legal fees. None of this goes away just because you're using a digital medium.
As to the "value," aside from the fact that pricing is far from an exact science, ultimately the value of an object offered for trade is "whatever the market will bear." This does not necessarily correlate to production or distribution costs, scarcity or abundance, customer expectations or even demand. I.e. no object has an "inherent value," although it will have production and distribution costs, regardless of whether it is a physical or digital object.
Meanwhile, you can download a copy of Microsoft SQL Server 2008 for free, and use it for 120 days. After that, you have to pony up $5,000 or more. It is irrelevant that it is distributed initially for free, or that competing products may be free, or that it is "made of ones and zeros" that do not require a physical medium. You want it, you pay for it.
I could sit here all day and list examples of companies that successfully charge, and even charge significant prices, for digital content.
Free has a role to play, but this does not mean that everything in digital form can or must or will be free.
Quote:
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Originally Posted by Moejoe
A whole generation 'expect' free product. From open-source operating systems, to the bands they're growing to love on Myspace and Youtube, they're all offering work for free and foregoing the old payment model. Product=fixed price just doesn't work anymore in the world (apart from those who still think it works, but that won't last very long).
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Actually, entire generations have gotten free media. It's known as "broadcast television" and "terrestrial radio," among others. (It's worth noting that cable providers convinced customers to pay for a previously free service....)
And the expectation or desire for free product does not grant punters the moral or legal right to
demand free product.
And yet again, many of the free or even ad-supported outlets are money pits. MySpace is flaming out; YouTube loses money; and Facebook still hasn't quite figured out how to turn a profit. None of these sites even have to pay for content -- and yet they still lose money. So, I'd be careful about holding up some of these companies as Paragons of Free, until they perform better.
The alternate methods of revenue generation that Anderson envisions are not necessarily available to or optimal for authors. E.g. musicians can sell merchandise and go on tour, most authors cannot -- especially if they no longer have a paper book to sign. The "donation" model might work, but some would regard this as a step backwards, as the author will inevitably become beholden to powerful patrons, whether they be governments, individuals or corporations.
If the "new model" cannot support the creation of digital content, then content creators will suffer. Fortunately, this does not necessarily have to occur, as long as most readers can be encouraged to pay for what they read, hopefully by setting a reasonable price.
P.S. - "open source" = "free software." Those guys get kinda picky about the distinction.
