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Comment by sklivvz1971

7 years ago

When one produces goods (e.g. pizza) there are two costs:

- pay-once costs (the cost of the oven)

- pay-per costs (the cost of the dough)

Competition and economic law tells us that the price of a pizza will drop to the pay-per (marginal) cost once the pay-once (fixed) cost is repaid.

Copyright law was introduced to let companies recover fixed costs by giving them a monopoly and preventing competition. The problem is that this law failed on many levels:

* the length of the monopoly far exceeds its needs: recording an album does not need millions as 50 years ago. It needs thousands.

* there is no real incentive to cut down fixed costs. The reason the prices of production dropped is simply the advent of digital recording. Pro audio analog tools are still incredibly expensive.

* it set up a specific, adapted business model which is not necessarily a good one, the one of rock stars, which privileges few "winners" giving them huge resources and exploits the majority of other artists by giving them essentially nothing.

If you want to know what would happen to software if getting a copy is free, well, essentially we are very close to it. Google is not really protected by copyright law when thinking about its search engine business. They are protected by the control of deep know how and the cost of building such a system. Google's search engine is its team, not its source code.

Software today is different, in that the value is not in the source code but in results of its execution. With Internet, this made it possible for companies to keep the sources and execution to themselves while giving you only outputs - also known as Software as a Service model.