Wow, I read this article and immediately thought: this is the future of digital media economies.

It's obvious that in the long run, it will be impossible to force people to pay for digital media. The only alternative is coercive, expensive, leak-prone control of the internet by governments, and I just don't see that as feasible in the long-term.

So, asking people to please be honest is basically the only alternative.

Look at Louis CK's experiment, or the Humble Indie Bundle, or Radiohead's In Rainbows, all those years ago. What were they doing? They were leaving out a bunch of bagels, and a box with a slot in it, and saying "Hey, we're not going to watch you, but we'd really appreciate it if you paid for your bagel."

Some further thoughts:

1) With digital bagel selling, the bagels are infinite, and the potential office size is the entire world.

2) With digital bagel selling, a recommended price can be asked for the bagel, but customers are encouraged to pay as much as they feel willing to give.

3) Similarly, digital bagel sellers such as Louis CK have used guilt-tripping to attempt to raise payment rates. Saying "I worked hard on this, I'm not asking for that much, I would really appreciate it if you supported me" - making an appeal to people's sense of fairness and generosity - must increase payment rates (/decrease theft)

4) What other factors might influence payment rates in digital selling, and might it be possible to account for these factors - to adjust selling techniques depending on the "digital weather"? For instance, given enough data, could you correlate payment rates to internet activity - maybe someone who looks at lots of pictures of Lolcats is more likely to pay - or someone who has read lots of depressing news articles is less likely to pay - or maybe someone literally browsing in a place where the weather is shit is less likely to pay? Could you tweak it so that someone is most likely to see an ad/link for your digital bagels when the digital weather is optimal?

5) By always starting selling as digital bagels, sellers can prevent the worst excesses of the torrent cycle. If you try and lock digital bagels into the traditional payment model, they will almost certainly instantly appear in torrents, at which point, all potential buyers will be faced with a choice - buy at the set price from the standard outlet or sneak around to the backdoor torrent outlet. By setting up a digital bagel shop, you can let those who would not pay anyway do so, immediately, making it less likely for anyone to set up a backdoor torrent. Why torrent a digital bagel when it can be downloaded for free, in a pristine copy, from the official outlet? Preventing the runaway torrent cycle means that all customers, payers and non-payers, will be exposed to the optimum conditions for inducing payment - resulting in the highest potential returns.

6) How do we calculate a reasonable return for digital bagel selling? Beyond paying for hosting and bandwidth, there is no cost for selling/giving away 10,000 digital bagels vs 100,000 digital bagels. How much should creators of media be paid - how do we calculate how much they deserve to be paid?

Much of this I am sure is what the people at Humble Indie Bundle spend a lot of time thinking about. But it is clear to me that the SOPA-path is not a tenable future for the internet (my native New Zealand has unfortunately already gone down this path). Worldwide free or next-to-free circulation of cultural goods is a net good for society. More people reading more, watching more, thinking more, means potentially more people more educated and aware than ever before - and people creating more fantastic things than ever before.

But we are being dragged away from this path by those who reaped fat rewards from the old system, when commodity sold was linked to cost of production, and physical formats meant IP enforcement was still feasible. The stalwarts of the old system are not willing to consider the reformulations of basic economic strategy necessary to take advantage of the new situation.

Hopefully we end up with a free internet, where everyone sells their own digital bagels, and people are on the whole honest and generous! Fingers crossed.