One of the key questions with copyright is whether and how creators can profit without it. The economic argument against copyright isn't that creators should work from the kindness of their hearts, but rather that there are economic incentives to produce new creations even without copyright, and these incentives are strong enough that there will be little loss in creativity if copyright were to be abolished.

A key empirical question is to what extent goods that are in short supply are substitutes or complements for things that are not in so short supply. For example, if electronic copies of music trade widely at a very low price, they may generate little revenue for musicians. On the other hand, it they are complementary to live music (and they are) then the "freebie" recordings raise the demand for live performances. So a perfectly reasonable business model in music is to give the recording away for free, and sell the live performances. In the free software industry, copies are cheap or free, but generate demand for (are complements of) services which are not.

What about books? One of the concerns of the publishing industry is that if free or cheap electronic copies become widely available revenue for authors will dry up. (Well that is a concern of authors, anyway.) In other words, are electronic copies substitutes for printed copies? In the long term, portable computers may replace printed books, so this is probably true. But it is far from true today. John Bennett draws our attention to an article by Tim O'Reilly that provides hard data on sales and downloads of Asterisk: The Future of Telephony, by Leif Madsen, Jared Smith, and Jim Van Meggelen, which was released for free download under a creative commons license. The article has quite a bit of information. Typically books sales spike when it is released then decline gradually - in our own research we find most sales occuring in the initial six months after release. The article has only two books to compare, but it seems as if the free download had little impact on sales, at worst causing sales to decline slightly faster. So at the moment at least it appears that elecronic copies are neither complements or substitutes for the printed version, but rather are neutral.

Doonesbury appears to be a reader of Against Monopoly, as his current series starring Jimmy Thudpucker, a singer and performer talks about how to survive in a world where record sales are tanking link here. His solution--pipe in his music to the ladies rooms in fast food restaurants and other institutions, giving it away in order to sell tickets to his live performances. A complimentary sale, if I ever saw one.

I'm off to Home Depot to meet Madonna as we speak...

Oops, it wasn't a joke. I thought Doonesbury was making it up. From Slashdot:

"Former Beatle Sir Paul McCartney will release his new album today it's called 'Memory Almost Full.' In an interview with the L.A. Times, he talked about ending his long-time relationship with EMI and making the new album fully downloadable through his new relationship with Starbucks' Hear Music label. Some of his comments on the music industry: 'I was bored with the old record company's jaded view,' McCartney says... 'They're very confused, and they will admit it themselves: that this is a new world, and they're a little bit at a loss as to what to do. So they've got millions of dollars and X budget... for them to come up with boring ways because they've been at it for so long to what they call "market" it. And I find that all a bit disturbing.'"