The more often I see this piece, the more I'm impressed by how poorly it's aged, the errors it contains, and how much ignorance and/or covert attempts at media monopolisation it reveals.

Beginning with the title: though often attributed to Gates, the phrase probably originates with Viacom's Sumner Redstone, a man whose wealth and fortune came not from content by by distribution -- control over content.

https://www.youtube.com/watch?v=kums8SGXHoo

http://www.bu.edu/buniverse/view/?v=a0R7b5b

Information and markets are a poor match. Market pricing works best where goods are uniform (either individually or on aggregate average), their qualities are readily determined (or again tend to average out well), where the fixed costs of production are low and marginal costs of production high (relative to one another), and externalities, both positive and negative, are small relative to market price.

Information goods violate virtually all these assumptions.

* Quality is highly variable.

* Quality assessment is difficult, and often frustrated by other factors.

* Quality isn't, and often cannot, be known in advance.

* Variance of individual instances is high enough that averages rarely suffice.

* Fixed costs of production are high, particularly for research, also to an extent for selection, review, and editing.

* Variable costs of production (e.g., publication) are low.

* Information goods typically have very high positive externalities -- they benefit those who don't directly consume them. Occasionally they have high negative externalities -- e.g., smallpox, "superflu", advertising, or weapons research.

David Brin is amongst those who've argued for micropayments. He, along with others, is wrong.

https://old.reddit.com/r/dredmorbius/comments/4r683b/repudia...

Nick Szabo, Clay Shirky, and Andrew Odlyzko have all argued this point better than I.

Successful media payment systems tend to be:

* Subscription or serial based.

* Bundle based.

* Patronage based.

(That is: they look a hell of a lot like a Viacom cable or Microsoft Office 365 service plan, not a micropayments scheme.)

The idea that content creators should be paid by the piece is another frequently-iterated myth. The purpose of compensation is to enable existence, and the intermittent and happenstance reward of creative activity is notorious for failing at this. Historically, solutions have tended toward patronage, independent wealth, control over a production venue (as with Shakespeare and his New Globe Theatre), or other forms of live performance in which the ticket booth serves as a literal gateway between audience and performer at which a toll may be levied. More recently, the notion of generally-supported creativity through public support, paid in taxes, has come into vogue, as with the UK's BBC and a small fraction of US works.

Adam Smith argued against piecework:

Workmen, on the contrary, when they are liberally paid by the piece, are very apt to overwork themselves, and to ruin their health and constitution in a few years.... We do not reckon our soldiers the most industrious set of people among us. Yet when soldiers have been employed in some particular sorts of work, and liberally paid by the piece, their officers have frequently been obliged to stipulate with the undertaker, that they should not be allowed to earn above a certain sum every day, according to the rate at which they were paid. Till this stipulation was made, mutual emulation and the desire of greater gain frequently prompted them to overwork themselves, and to hurt their health by excessive labour.

https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/...

The notion that improved network speeds has been soundly refuted by experience. It turns out that William Stanley Jevons was right: reducings costs of a good or service (here, the time cost of information transfer) only serves to increase the consumption (or production) of that good. Or, in this case, bad. Today's webpages rival Gates's 1990s-era operating systems in both data throw-weights and capabilities as malware-distribution and surveillance-enabling systems.

http://idlewords.com/talks/website_obesity.htm

If you want to gain something from this essay, invert it completely.