Kudos to Krugman

Those models are not sustainable or even just scalable. Data will become too important to be entirely free.

The majority of businesses don’t give it away for free. Cable TV or computer software providers for example.

It is only when one is faced with piracy or when a product is widely available like news that a business considers free downloads. Essentially, a business must reinvent its business model.

While one can change the medium or method of delivery of a book, it is still essentially a book. I have the feeling that Paul Krugman will not be giving away his work any time soon. A book represents a work of uniqueness with no close equivalent. The nature of the work has not been altered by the method of delivery.

The internet actually leverages the ability of Mr. Krugman to reach a wider, global audience offering him greater economic opportunity to exploit expanded markets.

Krugman’s point about how technology is undermining the monopoly formerly known as intellectual property is a good one.
He fails to note, however, that Dickens was front and center in the copyright monopolists’ battle against the “pirates.”
He also overlooks the fact that, contrary to the legend he promoted, Dickens was paid royalties by three American publishers, including Harper & Brothers.

Krugman’s tag line about the Grateful Dead is clever, but he might have pointed out that the Dead is suing Wolfgang’s Vault for copyright infringement. John Perry Barlow, who has penned at least three articles gainsaying copyright, did not respond to an email I sent him last year about this contradiction.

“The “Why Does Everything Suck?” blog points out some caveats–”

Well, that just ruined my day. I was planning to write the book on “Why Everything Sucks.” Oh well.

Re: Krugman – I guess we are all futurists now.

What the digital does is reduce the cost to near zero of being a competitor. So, it’s inextricably linked.
I’ve thought similar about bands for a long time. They are going to run out of fingers to stick in the dike. Merchandizing. I have a drawer full of shirts and only one or two say “Rush” on them. There is a lot of “allegiance space” in my life that is currently taken up by free T-shirts and athletics brands. It could easily be my favorite bands and authors. Individualization is the post-mass-production trend. Bands need to jump on that. However, the rise of customization will also undermine the network effect of being in on the hot music. Eventually, everyone might even make their own music, who knows. Bands can also tap untapped foreign markets. But, they won’t be as able to do so without increasing their time commitments and costs. They need to figure out a way to monetize the fact that they still aren’t a commodity and their fans want to support them, even moreso as their fans get older and wealthier. Hint-price discrimination. Free music may actually make some bands richer.

I’m not too concerned about it, though. Maybe there won’t as many ultrarich artists putting out highly manufactured music. That wouldn’t really put a dent in my music tastes. Maybe the George Lucas’s won’t be able to make a handful of movies and then just sit back and accumulate insane wealth. Does the typical author or musician make gobs of money today? I think its those we should be worried about? They may get a break. Mass marketing killed local music scenes and video killed the radio star. But the new economy based on personalization could cause a resurgence in local domination.

Daniel: Which suppliers would that be? Wal-Mart used CDs as a loss leader. They were willing to take a hit in order to attract customers into the store, and more specifically, into the electronics section.

With CD sales declining and CD racks taking up precious floor space, Wal-Mart told the record companies they had to lower their prices or else Wal-Mart would reduce their selection. Guess who blinked first? Hint: it wasn’t Wal-Mart.

Andrew: Contrary to popular belief, the music industry is thriving. Too many people equate the recording industry (aka the RIAA) with the music industry. The media hears the whining from the RIAA and assumes that the music industry is not doing well. Fortunately for music lovers, the opposite is true. The record companies are losing some of their control and that means a hit on the bottom line. Time to change your business model.

@Laurent GUERBY,
I did not say ‘the current legal copyright system should be kept.’ That’s something I don’t have a firm opinion about.

I said I think “if we require content to be free”, we lose capitalism. Physical products and media contents are thought differently, but I think this is an intellectual error many people are making. You can read my blog post I linked in the previous comment.

I don’t like the term capitalism, because I think idea and innovation, not the capital. is the defining factor of the free market.

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