<i>When the marginal cost of production falls to zero, classical economics ceases to function and extra-market restrictions are needed to force the continued existence of the market.</i><p>You don't even need marginal costs to be zero - external utility factors are required for even the most basic of markets to function, laws being the primary example, but there are others.<p>For one, most people feel bad when they steal.  They feel embarrassed when they are caught, even before they are punished.  The likelihood of being caught stealing a physical product is rather high, and once you layer on the punishments, which are rather large, it's enough to make most people refrain from shoplifting.<p>Unfortunately for digital media, stealing and getting caught are both extremely impersonal acts, so there's very little embarrassment or guilt involved.  And getting caught is so rare that the financial penalties are all but meaningless.<p>In my opinion all of these industries need to stop worrying about what is "due" them for their hard work, and start worrying about what the optimal price points, payment systems, and purchase/discovery paths are to get paying customers.  These may be very different from the current levels, and may require radical steps: I don't think it's out of the question to offer vastly different prices, going as low as you can imagine, to different people based on how likely you think it is they will purchase the item.  If it costs nothing to sell a digital copy of Britney's new CD, then it's crazy not to let someone buy it for $.25 if you're pretty sure they'd otherwise either pirate or ignore it.<p>These changes may end up meaning that margins and/or revenues are significantly cut from the pre-Internet era, but that's life.  And if things do get so bad that certain types of information can no longer be produced, so be it, the market has spoken.