Marco quoted the following paragraph from an article on MacUser. The article bemoans users expectations that web services and software be free. See the quote:

Despite the recent advent of ad-supported programs, people have been paying for software for years. And developers put no less time and energy into writing software than a woodworker puts into fashioning a table or a chef puts into cooking a dinner—yet nobody demands that those products be provided on an ad-supported basis.

I’ve heard this analogy used frequently, and it’s time to put it out to pasture.

Users expect software, music, and other digital goods and services to be free because they know it costs zero to copy and distribute the digital goods to them. Users expect to pay the marginal cost of a good, especially when it created for the purpose of being distributed at mass scale. Most users don’t understand what “marginal cost” is, but most rational users will indicate they want to pay the minimum price possible for a good or service, and that minimum price (in any medium or market, not just digital media) is always the marginal cost of production and distribution.

Returning to the faulty analogy which kicked off this post, prices trending towards marginal cost is true in woodworking or culinary disciplines too. If two restaurants offer a comparable cheesecake, all else being equal, a consumer will be drawn to purchase the cheaper one. The two restaurants will compete on price, and the minimum price that either restaurant can afford to offer (while managing to stay in business) will be the marginal price.

Consumers’ demand for free software isn’t novel. It’s as old as trading itself (think: animal furs and crude weaponry in caveman society). It’s the basic desire to receive goods or services in exchange for as little as possible. The reason why the demand for free software deceivingly feels novel is that we have never before had a medium where so many goods and services can be viably offered for zero marginal cost.

So, enough comparing software to bookshelves and desserts. If you want to make an analogy to other industries, choose one where marginal costs are also zero, so you have an increased possibility of pulling off and apples-to-apples comparison.