More on Google and Embracing the Free

There are a series of stories in this morning's news that would not normally tie together. For example - Digital music sales have tripled (to $790 million for the first half of the year - WSJ) or Google's plans to offer free WIFI in San Francisco (WSJ again) or The European Commission plans to digitize Europe's audio and visual memory (CNET news).

Each of these are a part of a much larger story which involves two story lines. First, the distribution networks that we have relied on in the recent past have changed. Digital music is now easier for consumers than CDs - just as we saw two decades ago when vinyl was passe - there are new ways to buy music and people have accepted them with vigor. The music industry clings to the notion that they continue to control the industry in the way they have previously. They're wrong. If they screw up the pricing system which iTunes has imposed on the market - one simple price - they will ultimately understand how precarious their position is. Google understands that free WIFI is not actually free. Phone and cable companies can try to resist the new system with old regulatory schemes. Again, they will either innovate or lose out. For all of the other problems with the European Union - someone there seems to get the power of digital archives. Second, with the change in the distribution networks also comes a change in pricing - ultimately, just as we learned with movies to videos to netflix to whatever - there is more money to be made in the new systems - but the old line providers may not be adroit enough to be able to maintain their positions. In the end, sometimes new systems start with the free - but ultimately, if there is value in an economic chain pricing will follow - it may not be the way the old folks did it - but it will come.