The digital world fundamentally changes what a copy means for copyright. I wrote about this in the past from the legal perspective, suggesting an implied license to reproduce and a greater reliance on other rights.

Kevin Kelly has a great post up about the Internet's role as a super-distribution center and how to make money in the face of this (via Andrew).

Yet the previous round of wealth in this economy was built on selling precious copies, so the free flow of free copies tends to undermine the established order. If reproductions of our best efforts are free, how can we keep going? To put it simply, how does one make money selling free copies?

I have an answer. The simplest way I can put it is thus:

When copies are super abundant, they become worthless.
When copies are super abundant, stuff which can't be copied becomes scarce and valuable.

When copies are free, you need to sell things which can not be copied.

In other words, money is no longer in the distribution, but "rather it follows the  path of attention, and attention has its own circuits". He goes on to list 8 things that characterize content that he believes is "better than free".

The record labels and other businesses who are almost entirely about owning the distribution channel should pay attention.