Let’s start with this article from Techdirt, describing how entertainment executives slack off from developing new business models using the claim “you can’t compete with free“.

I’d say a company definitely can compete with free. It’s just that the entertainment companies aren’t selling just the content anymore. They’re also selling a service, and must deal with a convenience factor.

Take for example my recent experience: commenter Podophile mentions a singer, France Gall that I should check out. On my lunch break, I went to a Barnes & Noble record store. They didn’t have any of her CDs. So just now, I fired up iTunes. There’s just one song available - I was hoping for an entire album.

So what next? I looked in two of the most obvious places and found nothing. I could fire up Amazon and order the CD, but then I’d have to wait several days to get it. The little pirate in me is saying, “just search on the internet, you’ll find some stuff, somewhere… and most likely, for free.”

If I had seen an entire album available in iTunes, I would have bought it right then and there. The convenience aspect of receiving something instantly would have made shelling out $10 for a digital download a real possibility. But since I was unable to fulfill my impulse, the record company didn’t get my money.

So it’s funny then, to read an article such as this, which describes how certain record labels don’t like the sharing feature on the Zune MP3 player, and have disabled sharing for particular songs they sell.

Talk about annoying. Let’s say I buy a track from the Zune Marketplace, load it on my Zune, and then try to share it with another Zune user (the act of which ought to be embraced as “viral marketing”), but find I can’t? What did I initially pay for? In my mind, part of the implied service in the purchase price should be the convenience of being able to share the song via the Zune. Since that’s not an option, I’d be better off buying a physical CD and ripping it to get content for the Zune, something the record companies likely don’t want, but I’d practically be forced into it.

My point is this: I want media when I want it, in the format of my choice. If it’s not available when the impulse strikes, I’m a disappointed customer, and this represents a failure of customer service. The music company is now several steps behind the free option.

This situation could be turned into an opportunity. If a paid option is faster (or more convenient) than the time it takes for me to track down a CD to rip, or to find a site online that offers said media for free (I’m thinking a torrent) I’d likely use it. My most recent iTunes purchases were two Bangles singles, for example, that I had to have just then.

I liken the current state of the music industry to a restaurant that doesn’t accept credit cards and has no takeout and no delivery. The only cash accepted is one dollar bills, and they’re only open from 9 AM to 2 PM on a Sunday. I’d really like to eat the food but barriers are set up everywhere for me to enjoy it.

Eventually, I’ll just choose another restaurant, or give up and dine at at home.

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