"I cannot believe the future of music is giving it away"

Those are the words of Graham Henderson, the president of the Canadian Recording Industry Association, as quoted in a The Chronicle Herald article by Patricia Launt. Whether Mr. Henderson believes it or not, the authorized sharing of knowledge is the future.

The economics are simple: Knowledge has a marginal cost (The cost per additional unit) of production to the author of zero, and with modern communications tools the marginal cost of distribution is nearing zero as well. People who make a living in the knowledge economy have a choice: they can use older business models which focus on the collecting and policing the collection of an artificial marginal cost charged to the consumer, or they can find ways to find their one-time up-front costs and allow the marginal cost charged to the consumer to be zero.

In order to achieve a zero marginal cost the various incumbent middle men, as well as the tangible media and retail channels used to distribute the music, will no longer be used. This will of course involve a loss of revenue to those middle-men, with more of the money they traditionally soaked up being available to pay the actual creators of the music. While Mr. Henderson likes to quote the declining revenues of increasingly redundant intermediaries as if it were a bad thing for the music industry, it is in fact a healthy aspect of the modernization of the industry.

Once these options are recognized, entirely new successful business models can be found. While music isn't like software where Free/Libre and Open Source Software is the fastest growing part of the software industry, innovative new music business models that harness new economic realities are inevitable to replace the incumbent old-economy labels and business models that Henderson represents.