But I can – to be the first to link to Mike Masnick’s very interesting post on the “can’t compete with free” meme.
It seems like a genuine problem content producers have, competing with those who would share content without regard to copyright law. But Mike points out that they have the same problem as the producer of any good. Competition drives their profits to zero, forcing them to innovate, which content producers seem reluctant to do.
In the comments, Mike is defending himself against some meritorious challenges, though. The marginal cost of distributing intellectual goods may be (effectively) nothing, but the marginal cost of the goods themselves is something above that. Content producers are looking at competion from those who would offer the same products at below marginal cost.