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First question here, have been lurking for a long time, I really enjoy reading your interpretations of the various situations. I was wondering what you believe would be the most realistic implications of a world where anything that can be made digital (music, movies, documents, images, videos, etc.) was automatically released to the public via the internet and was completely free (free as in speech and free as in beer)? Essentially, no concept of intellectual property.

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    $\begingroup$ I claim your question as my own. $\endgroup$ – Twelfth Apr 2 '15 at 0:59
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    $\begingroup$ @Twelfth It technically is yours, as per the license on all posts on Stack Exchange. 'Course, it's mine, too. $\endgroup$ – HDE 226868 Apr 2 '15 at 1:04
  • $\begingroup$ short answer, nothing that couldn't be funded on a budget of say...twice what kickstarter projects currently are (since people would have more disposable income they would donate more to kickstarter, but no where near as much) would be made. In fact many of our 'free' services like youtube, radio, and hulu will die out since there would be no way to force us to watch commercials, and thus no way to cover hosting and operation costs. $\endgroup$ – dsollen Apr 2 '15 at 21:54
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    $\begingroup$ Business who pay developers to make Open Source software are interested in the creation of a digital tool that didn't existed before, not in owning that tool, because they feel they needed it. The same would happen to artists, who will have to look for some mecenas or aim to please a lot of people. $\endgroup$ – quarkex May 13 '15 at 20:57
  • $\begingroup$ @dsollen as you say, that's an answer, so I encourage you to post it as such. Comments are for clarifying questions and are transient. $\endgroup$ – nitsua60 Mar 23 '16 at 3:04
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I understand the question to be asking about the current economy, only without intellectual property, not some future post-scarcity economy. A post-scarcity economy would be different. Post-scarcity implies a lack of copyright, but a lack of copyright does not imply post-scarcity.

Without some kind of change in funding models, it would no longer be possible to make big budget works. For example, Star Trek (both movies and shows) would be extremely difficult to fund. It relies heavily on secondary sales (syndication and videos) for funding.

It's possible that Kickstarter, etc. would be able to compensate for this, but not definitive. Note that the most successful Kickstarter movie was funded for less than six million. Contrast that with the tens of millions needed for Serenity, which was considered a relatively modest budget for a special effects movie. The hope would be that more people would step forward if there were no traditional projects with which to compete.

Smaller works could be funded more easily. YouTube would be fine.

Television is an interesting case, because the channels would have to develop the content as well. Currently studios develop content and channels purchase it for display. Without copyright, that model doesn't work. The elimination of DVDs would drive budgets down. We'd probably see more live television like reality shows and game shows. Perhaps more concerts would be televised as well. I suspect sports would change the least. It's almost all live now.

Pay cable television would be much harder. For one thing, they could no longer buy content. For another, selling content becomes less profitable. Some people would just wait the extra day to watch copies of Game of Thrones, etc. rather than pay for access.

Music would become smaller budget as well. Note that albums serve two purposes. One, they are a marketing tool (for selling concert tickets). Two, they generate enough revenue to pay for themselves and additional marketing to promote them. Without that revenue, there'd be much less marketing. This would tend to make acts smaller and more regional. Fewer touring bands. Better bar bands (since they don't graduate to being touring bands). Some artists might never start, but it seems likely that many are motivated more by love of music than money.

Books would be extremely difficult. Few authors would be able to spend the time to write hundreds of pages of content without pay. Short stories would be more robust. Note that textbooks would also be rarer. They'd be forced to an open source model. It's possible to write popular style books in an open source model as well, but it's unclear if enough people would be interested.

In general, things that are under copyright now would get funded less. The works that remain would tend to be cheaper and more personal. Content would be created if people felt driven to create it.

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  • $\begingroup$ That sounds like China before 1992, and still somewhat grey to this day (e.g. Holleywood DVD's are $1.60, Rolex knock-offs are sold openly). It can only exist as part of a larger world economy, trading cheap labor in this case. Formalized, the high-price side would pay a small (to them) amount of cash and all the intellectual property they can eat, for their trade goods/services. The intentional difference in economy means they could not afford the normal price, and a scaled-down price is less then what it costs to hire them to reproduce. $\endgroup$ – JDługosz Apr 2 '15 at 12:42
  • $\begingroup$ You could also fund movies by including more paid product placement. Like the Power Glove. It's so bad. $\endgroup$ – KSmarts Apr 2 '15 at 15:03
  • $\begingroup$ Your answer indicates that, across the board, less money would be spent by consumers on things that they currently spend more money on. Or does it? For instance, if a person today spends $100 a month on, say, music related products. CDs, concerts, spotify, merchandizing. Would they spend less than a $100 per month on music, or are they simply pay for more different and varied music, supporting larger array of artists? $\endgroup$ – zumalifeguard Apr 2 '15 at 17:05
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    $\begingroup$ @KSmarts I'm not sure paid product placement work either. Just edit it out and replace Reese's cups with Twinkies (or whatever). Product placement gone, so why should Hershey pay to get their product into a movie? And that's assuming that there's still trademarks to promote (trademarks are also intellectual property). If anyone can make a Reese's cup, then no one would promote it. $\endgroup$ – Brythan Apr 3 '15 at 0:55
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    $\begingroup$ @zumalifeguard People would still pay money for non-digital goods, real estate, etc. People might still be willing to pay for digital goods, but the funding mechanism would be difficult. Kickstarter and similar services are very possible but not guaranteed. It's the tragedy of the commons problem. Less of a return is less of an incentive to pay. So people would likely switch out of digital goods and into other goods. $\endgroup$ – Brythan Apr 3 '15 at 0:58
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Basically, we've already got a lot of that going now.

Between Youtube, Soundcloud, Blogger, Wordpress, Vimeo, etc. there is more digital culture being produced than ever before WITHOUT MONEY NEEDING TO CHANGE HANDS. Copyright law was written in an era where production of anything (and especially culture, books, music, art, etc.) required immense resources. We're far past that point.

So what happens when you take the money out of culture? Then people produce culture because they want to. We wouldn't have "The Fast and the Furious 6," but we'd still have movies and music. We're already seeing patronage resurfacing through crowdfunding platforms like Kickstarter, Indiegogo, and Patreon. Bands will still be valuable - time is unique and non-digital, after all - and they will continue to earn the majority of their revenues from appearances and merchandise, rather than the music itself. This has actually ALWAYS been the case with musicians - the record labels make the money on the music and CD's, not the bands.

Hulu "sells" TV for free (as did all TV before cable) - they make money off of your eyeballs, not your subscriptions. Soap operas are so called because they were bought and paid for by soap companies. No one purchased episodes of Days of Our Lives.

Radio is free, "digital" music.

So in short, it wouldn't look too different from today, just with fewer middlemen between artists and the public skimming money.

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  • $\begingroup$ The biggest difference from today would be that you will be allowed to build on top of the works, which will suddenly make it possible for people with creative minds, but limited talent, to be able to use existing works to create new works. $\endgroup$ – Ole Tange Apr 2 '15 at 21:40
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    $\begingroup$ I think you are greatly underestimating our current open-source market. I love our market very much, I generally assume that 90% of non-game software I want I can get open source. However, large products simply can't be funded with kickstarter. As to the rest of your examples, they work, directly or indirectly, off of commercial paying for their cost. Commercials can be 'forced' on patrons because the patron have no way to view your media without it, due to copy right. If we own the original media we won't sit through commercials since we can view the medium without them legally. $\endgroup$ – dsollen Apr 2 '15 at 21:50
  • $\begingroup$ @OleTange " people with creative minds, but limited talent, to be able to use existing works" you just described fan fiction. Have you read the average fan fiction? I'm not sure I want people with limited talent encouraged to build things :P $\endgroup$ – dsollen Apr 2 '15 at 21:52
  • $\begingroup$ @dsollen I gave both soap operas and patronage as real world models that worked to provide otherwise free goods. Many people watch the Superbowl JUST for the ads. Make ads entertaining and people will watch. Even today there is plenty of crud that we part good money for. Sure there is bad free culture, but talent still gets rewarded in the digital free-verse. $\endgroup$ – Isaac Kotlicky Apr 2 '15 at 22:00
  • $\begingroup$ @IsaacKotlicky soap operas profited from commercials inside the soaps, commercials which you can not convince people to watch when you don't own the product (it will be edited out of the product if it's annoying). People watch superbowl adds the first time because they are fun, but they don't repeatedly watch them. The cost of producing the superbowl add would not be covered if you were limited only to consumers who would be entertained by them watching them once or twice then stopping. Besides, if people want to watch the add then why pay the superbowl to air it, put it on youtube for free $\endgroup$ – dsollen Apr 2 '15 at 22:53
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As pointed out by other answers, a big incentive to invent things is to make money, which would be problematic in the world that you describe.

So how do you pay those inventors?

Well one thing is that many thing that we pay today would be free, so people actually have a lot more money than today. I don't think however that people would be willing to give the same amount of money to things like kickstarter/patreon/charity/... as what they pay today.

On way to force them into giving more money would be taxes. This already exists in some countries (cf. Wikipedia), where public broadcasters rely on tax-money for their funding (as opposed to ads).

That however wouldn't necessarily suppress the existence of independent productions. For example in France a lot of movies are financed through what is called "l'avance sur recette" (sorry, I could not find a good reference in english). Basically a commission reviews the film project before-hand and tries to guess how much money it is going to make. They then give money, and if the film is actually successful enough, the commission gets its money back. [This is not exactly a loan since sometimes the money is never payed back.] You could adapt such a system by evaluating the movie depending on how much success it is going to have rather than how much money it is going to make.

Here I have been talking about cultural stuff, but I guess you could adapt this to about anything. [Note that depending on where you live, the right-wing could think that all this is a really bad idea...]

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  • $\begingroup$ Most inventions today build on existing technology and could be developed in small increments. Very few of them are revolutionary. Some of these could be kept trade secrets. $\endgroup$ – Ole Tange Apr 2 '15 at 21:31
  • $\begingroup$ Did writers and composers earn a living because they were writers and composers? $\endgroup$ – zumalifeguard Apr 3 '15 at 18:47
  • $\begingroup$ Did Shakespeare have a real job to pay the rent or was independently wealthy? Or did he somehow profit from his plays? $\endgroup$ – zumalifeguard Apr 3 '15 at 18:48
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The short answer is that money drains out of the cultural sector- all television, film and music becomes free to consume and must either consequently have corporate or government sponsorship or die out.

So your visual media becomes ad supported and is filled with product placements. The same for video games.

Nobody is making a living any more as an author, a film maker, a television actor, director and so on, or anywhere in those distribution chains, so employment falls significantly and competition for work in other sectors rises. Fewer people are able to make a living from following their talents, so on the whole society is a little more miserable.

Ultimately there is a division between high-profile and low profile creators- for a few high profile creators there is plenty of sponsorship and they are able to make a living - think of your Coldplay, your J K Rowling and so on. For lesser known creators they are small fish in a huge ocean. Whether anyone is able to raise their profile to that higher level is doubtful and many brilliant people never play their songs to more than a few people, never have their books read by anyone they are not related to and so on. You can already see this happening in music and to a degree around books. If an artist doesn't have universal appeal, they cannot make a living from their work, so economics will drive creators to the middle of the road. The price of the world becoming more free is the end of professional musicians, writers, film and game makers and the loss of many unique voices.

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In a post scarcity world (which is essentially what you are describing) there will still be some constraints, which will become the "new" foundations of economics and wealth.

Regardless of how much you can physically produce, there will be limits of time, bandwidth and energy. To give a simple example, a famous person today might receive millions of emails or "Friend" requests; they cannot possibly read and respond to them all (limits of time and bandwidth: in this case the processing power of their own brain). Such a person in a post scarcity environment might be considered "wealthy", and having them bestow some of their valuable time and attention on you would be like having a high paying job or a winning lottery ticket. The schlub in the corner with no Twitter followers (or the paranoid with no on line presence at all) would be "poverty stricken" in this world. How you reach that level of fame and attention is up to you, but talent and ability that you can display to others will count for a lot.

Other limits like the total available amount of energy, accessible raw materials and electronic bandwidth would also have real effects on a post scarcity environment, the unit of payment may be "time" (i.e. the famous person above might not have to wait for the Fabber to build a car, while you might have to wait in a virtual line while materials and energy is assembled to make your new washing machine. Everyone who wants one gets a washing machine without fail, the real question is "when" you can get yours).

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I take your question that it will still be possible to charge for producing digital works.

If that is the case, what you are describing is more or less what we see in the free software (free as freedom) society: You can be paid for developing software, teaching, supporting, and even using the software. But you cannot be paid for licensing it.

It will give a lot of benefits: You can build on all other works and produce your own without having to consult a lawyer. This is great for works that can be improved gradually: Software, music, encyclopedias, ideas.

It will be harder for works that need a big initial investment: Writing a novel, making a movie, getting a drug approved.

Drugs are less of an issue: Today they are indirectly mostly financed by taxes in Europe (https://christianengstrom.wordpress.com/2011/03/09/an-alternative-to-pharmaceutical-patents/) and by insurance in the US. So they can be financed by using the same money directly.

Novels can to a certain extend be done as a collaborate work (think of all the quality fan fiction that already exists), but it will be harder get funding for writing a novel on your own. See Stephen King's "The Plant". The same goes for textbooks: They can be done in a collaborate way, where authors are paid to write/improve a chapter by someone who needs it (e.g. an educational institution).

The low budget news (gossip, press releases) will have no problem surviving: There will be plenty of people who will happily do that for free, and if there is a market for higher quality of this, I expect people may be willing to pay for this.

I currently do not see how to fund:

  • Big budget news (investigative journalism) - it seems to be more or less the same as the solo-novel. But maybe it can be done like Democracy Now.
  • Live coverage (sports) - Ad-sponsoring will not work: if the others can replicate the signal, then they can also substitute the ads.
  • Big budget movies - Product placement will work some of the way.
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  • $\begingroup$ It's common misconception, but you CAN legally sell free software (free as freedom) - example. You probably don't get many customers, though. $\endgroup$ – user11153 Apr 10 '15 at 10:33
  • $\begingroup$ Yep, I could have stressed that point. $\endgroup$ – Ole Tange Apr 10 '15 at 11:06
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The main points are made, I second everything brython said very much. However, I wanted to point out an obvious down side, and comments aren't enough to express it.

I believe most of our currently enjoyed 'free' mediums would, if not die out, drastically drop in quality and content. Currently most of our free mediums work based off of add revenue. I provide you with something free, you tolerate listening to my adds in exchange.

However, if everyone owns all digital media then I don't need to tolerate your adds to watch my cat videos. I own, and thus can legally download and watch at any time, every episode of The Awesomes (hulu original show I just looked up to make my point) at any time. I would therefore not go to hulu and suffer through commercials to enjoy the movie. I would torrent it or, if I don't trust torrent, download it from a sight that makes me watch only one add to cover their hosting fees prior to downloading every episode.

Thus if Hulu tries to live off of a model of using commercials to make a profit they will lose all their customers. Hulu would have to change it's income model. You may say that Hulu will need less income now that they aren't paying copyrights, and your right, but they are still paying hosting fees. It is not cheap to pay for thousands of servers and gigantic bandwidth costs to stream video. Hulu could make some money by having non-invasive adds along the side of the page, those adds we all institutionally ignore, but not enough to cover the costs of streaming video to the customers. Hulu could try to ask for donations to cover their costs, but most would find it easier and faster to download the files from large file-download sites and cut hulu out as a middle man. In short, Hulu is dead, radio is dead, youtube...well it may survive since part of what youtube offers is the ability to find videos from a collection of mostly worthless videos, their service isn't as easily replaced with a simple torrent. Still, many of our favorite youtube celebrities would find they didn't get any money from youtube for their productions, and that will cause some of them to stop bothering.

Now we could still download this media from torrent or file sharing sites, so the death of Hulu and Radio wouldn't make us lose a way to consume already existing media. However, radio, TV, and Hulu are major sources of income for artists, and that wouldn't exist. The artist can not make money selling his product in any way.

In short You can not look at these 'free' models and claim that they prove that the free market works, since these very models fail in the free market you describe.

Artists would have about 3 sources of income.

1) money given straight to the artist as a thank you for their work from fans 2) advertisements which can are unintuitive enough that they don't bother fans enough to drive them to another source, think the little adds on the side of any medium. 3) Money from product placement.

1 & 2 are not trivial. Many webcomics already make enough money to work full time as cartoonists from 1 & 2...mostly. Webcomics also sell 'swag', with their logos on it. I don't know rather you would consider it in spirit of the OP question to say that only merchandise authorized by the comic could use his characters.

A webcartonists would do pretty well with this system. If he was very popular some people would likely clone his site, using cybersquatting techniques to steal views from the cartoonist, but It would likely not be that huge a lost, and perhaps cybersquatting would still be illegal in the OP's world? The cartoonist also gets a good deal of money by selling print versions of his comics which he couldn't prevent others from producing knock-offs of. Still, he would likely get more donations from fans, who have more disposable money to spend on entertainment and more encouragement to use it via donations now that they aren't paying for other media.

However the web cartoonist only needs to make enough to pay for his hosting, which is less then the add revenue he gets per view anyways, and his own hourly wage. He has some other expenses, drawing supplies, office space etc, but they are relatively minor. Much of the media we prefer has a much higher budget!

Movies and video games will suffer drastically. Product placement will help cover a decent bit of their lost income, at the expense of making them more annoying, but ultimately any product placement that was too blatant would be edited out of their movie by a fan and the less annoying edited version will start floating around the internet quickly. I imagine that crowdsourcing donations would nearly double, with the increased disposable income and a larger cultural emphasis on rewarding those who produce products you like, but frankly that's still a drop in the bucket.

Some very good products will still be made, I've enjoyed some RPGMaker games better then high priced commercial products (insert rant on how much I hated FF13 here). However, large budget entertainment would die out. There would be no funding for it.

On the plus side the open source community is awesome enough that most of our every day non-entertainment software needs would be covered. A company could pay to have more specific software products built for them by promising to pay someone for making it regardless of copyright. In short our software development would not be hurt nearly as badly. Some for-profit products would die out, but the open source community would swoop in and fill the niche.

Music industry would survive to some form, by emphasizing live concerts and selling of swag, which is a large part of their profits anyways. The rock stars wouldn't be quite as rich, but honestly I'm not that upset about it.

The fremium business model for games may work...to an extent. These games sell a service in game, and can still make a profit on that in-game service as long as anyone plays their game. The biggest problem is that nothing would stop someone from starting up their own server that clones the existing game and sells the same 'services'. Phone and facebook fremium games would thus suffer significantly. When candy crush made good money someone would create a new candy crush that charged 5 cents less for a new game, and people would switch to it. Then someone would do the same for 5 cents less etc etc. The price would keep dropping. since it costs nothing to provide something in game there is nothing to stop other's undercutting the fremium provider's services. The original provider may get customers who are willing to stick with them as a way of rewarding the original producer of the product, or who stick with them because they don't know how to find the cheaper service though. Thus the original candy crush would likely charge more then the cloned version, but ultimately they couldn't charge significantly more without loosing too much of their customer base, thus their prices would have to be low. Some profit could be made, after all candy crush has a pretty small production and hosting cost so they don't need much coming in per-gamer to net a profit, but it would be much less then it is now. Still, fremium games would be the only way to make a direct profit from customers, and thus they would still be our primary type of for-profit game.

Larger fremium games like LoL would actually fair even better. That's because you need to have a certain number of people using your product before a game like LoL is worth playing. There is no point joining a server with 1/10 the customers (and thus longer waiting queues and a great skill disparity on teams) just to get a free skin. Between name recognition (or perhaps I should say server recognition), inertia of having the largest user base making you preferable, and customers intentionally using the original creator's server to reward that creator's hard work LoL would be able to keep a decent percentage of their customer base even if others started cloning their game and offering services with cheaper skins. They would still lose a decent chunk of their net income, but not enough to put them out of business. large skill online multiplayer style fremium games would be the only for-profit games produced with any real budget.

Still, any large movie or single player video game would be dead. Smaller fan made games, with perhaps a decent increased budget compared to today but still nothing spectacular, would be all you would have.

Books...technically could still be sold so long as they were never digitized according to a technical reading of the OP question. However, if books lost copyright protection they too would quickly drop in number. There would be some die hards who produce for the love of the work; I've ready some great fan fiction for instance, but not nearly as many writers would exist, and even the best would have less time to focus on writing since they would have to pay their bills in other ways as well. A 'professional' writer would be rare, and limited only to those who achieved meme status online (thinks like fifty shades of grey, though I feel dirty inside implying that book did anything right).

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  • $\begingroup$ "However, radio, TV, and Hulu are major sources of income for artists, and that wouldn't exist." FALSE: they are major sources of income for CONTENT COMPANIES that own/produce the shows. The actors and artists are paid almost nothing. Musicians have ALWAYS gotten more money from concerts and merchandise than their 0% cut from CD and digital sales (unless you're talking about those who are self-recorded). Actors are paid salary via contract, and very few have the leverage to negotiate a percentage cut of revenue (and when they do they are tricked by hollywood accoutning). $\endgroup$ – Isaac Kotlicky Apr 2 '15 at 23:12
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    $\begingroup$ The content companies are not some magic evil beast that just sucks up money though. They are an important part of how the content get's made. They pay for the movies to be produced(directly or indirectly with the promise of buying it later), and the movies then pay the actors. There may be a middle man in the process, but it's the fact that the content companies are willing to pay for products that lead to all the other pay. Without those companies the products would not be produced, regardless of the direct pay to the actors. As to CD sales, I already admit musicians would far better. $\endgroup$ – dsollen Apr 3 '15 at 13:53
  • $\begingroup$ I didn't call them evil. At the top level, they're profit motivated just as much as any other business though. As both an actor and economist, I understand very much why content companies exist. But there have been many high gross, low budget movies as well, proving that it can be a viable model. $\endgroup$ – Isaac Kotlicky Apr 3 '15 at 14:24
  • $\begingroup$ @IsaacKotlicky can you give me an example of a movie you consider high gross and low budget? even Serenity, one of the lowest budget films out there, had a budget orders of magnitude higher then any crowd sourced product. I think your find even 'low budget' movies in theaters are prohibitively expensive. There have been the Blair Witch Project style movies, but they succeeded due to extensive, and expensive, marketing campaigns which effectively hyped otherwise mediocre movie up so we would watch, you must factor in that campaign into their budget since it was a large part of why they worke $\endgroup$ – dsollen Apr 3 '15 at 16:48
  • $\begingroup$ the-numbers.com/movie/budgets Here's a good list. And the budget numbers INCLUDE advertising expenses, as far as they can be discerned. Some samples: Slacker, Clerks, Super Size Me, Pi, Night of the Living Dead, Paranormal Activity all had budgets under $500k and returns in the multiple millions. Many HUGE investments were total flops (John Carter, 47 Ronin, Lone Ranger, Green Lantern). We'd see an industry focused on getting it RIGHT rather than trying to make a buck. $\endgroup$ – Isaac Kotlicky Apr 3 '15 at 16:57
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Let me contemplate a variation of what Isaac posted. Suppose that the amount of stuff I consume, such as music and TV entertainment, is fixed. I have a budget, a reasonable affordable amount, and I patronize someone or another as my interests go.

The free-digital concept means it is essentially free to reproduce and distribute content. The only cost is the actual production. But, it scales enormously because everyone in the world can chip in to fund it. The price of consuming it drops directly in proportion to the audience size.

People can produce and distribute more content for less expense. That makes it cheap to consume.

Good stuff also accumulates, so it can continue to earn credit years later. Past hits are an investment.

Patreon is far less of vechile for cons and scams than Kickstarter. It still happens, where someone can milk the monthly contributions and avoid finishing because that means an end to the funding. But ideally content providers are paid as they go and because we like what they are (continuously) producing.

If the consumption went through a service that automated funding payment, it would be much like attending a live event: I pay at the door plus take care of my own costs to get there, so the presentor sees income directly proportional to the number of attendants with no change in effort. A better analogy would be if the venue itemized its own fees as separate from the performer's fee on the ticket. And the venue costs were the same no matter how hot the performer.

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