They can.

There are a few use cases here:

1. Massive pirate. Won't pay for anything. If we made it a perfect world, they would just mooch off other people in the extreme, never paying for anything.

They won't be customers. Ever. But they do talk about stuff, make recommendations, etc... So they can be leveraged in that way. Show them an AD, or have them do some other minor league thing of value, and trade on that for some value. Good as it gets.

And it's important to factor these people in. Their copies and views don't devalue anything. Ignore their $0, and consider anything of value derived from their mindshare as a bonus.

2. Casual pirate. These people will pay, but don't want to be annoyed. Good service, making it easy, etc... all counts, and massive numbers of them will subscribe to lots of things. Cord cutters fall in to this bucket too. Cut out the $150 cable bill, and sign up for a few services, then buy things on top of that. Big cable loses a revenue stream, but content creators and service providers gain one.

3. Buyer. They typically have more means than most, and just pay because it's not a big impact to them. Upper middle class and above here mostly.

What people make, and what $10 means to them is absolutely a factor in how to compete with free works. The difference between #2 and #3 here is important.

Secondly, entertainment dollars are largely fixed for many people. Actually, my experience is this is true for most people. There is some flex in it, but there aren't billions laying around unspent somehow as most entertainment centric arguments imply. Most people have a coupla hundred bucks to spend. And the various forms of entertainment compete too. A summer of good movies? Yeah, maybe buy one less game.

Recognition of this means understanding price points, incentives to spend and how / when / why to compete with other entertainment forms to optimize revenue. Very little is being said about this, but we are seeing flat rate services compete fairly well while delivering consistent revenue.

All of this is particularly relevant to #2 above.

Considering all of these together highlights some ways to compete with free.

Be the free source. Pirating has some negatives attached to it. So side step those and give people options that can send value your way.

Increasingly, it's possible to stream now. I am a fan of AMC "Halt And Catch Fire" and do not have cable. I can't go and buy AMC just yet, and they didn't put the show on the services I do subscribe to.

On a quick check, there it was! Right there on the AMC site, and they want me to watch an AD, maybe participate in the little activities and potentially do other things in return for my eyeballs on the show.

Result?

Incentive to pirate goes way down. I've got a path in, and would gladly have gave them money for the views too.

Cory Doctrow does this with his books too. If you want to read 'em, he's the source for that. Grab and go. If you want to translate, or do fan derivatives, he will source that too.

I did that with "Down and Out In the Magic Kingdom", and really liked his work. Bought a lot of hard copies of his stuff since then. Had it not been that easy and obvious, I might have gotten some PDF, or other, or more likely, not done anything and would not know the guy at all.

Mindshare matters. Buying it with views to compete is a perfectly valid business model. And giving people options like sharing / recommending / gifting means those who can pay with dollars will, and those who can't or won't, can do some work that leads to dollars. It's all dollars in the end, done right.

So there are a couple of ways right there. Both compete with free, both leverage mindshare to get some value while at the same time offering purchase opportunities.

The more of this there is, the less people will pirate, leaving us with just that use case #1 above, and there is nothing to be done with those people, other than to leverage their mindshare somehow.

Maximizing revenue is all about the other use cases and recognition of the nature of entertainment dollars and pricing on that understanding, IMHO.