The essence of the entertainment industry's problem with the Internet is its culture of freely shared information that dates back to its beginnings as a connected academic think tank:

Part of the challenge facing not just the recording industry but all media companies is how to deal with the lingering perception that the Internet is somehow a free resource. It never was, of course. In the early days, the government and universities subsidized it. E-mail continues to be free to users, though one unintended byproduct is the spread of spam, an irritation to consumers and a costly burden to corporations and network operators handling Internet traffic.

Most commercial Web sites still do not charge for viewing, though some do, and others charge for "premium" offerings.

"It was never really free," said Thomas R. Eisenmann, an assistant professor at Harvard Business School. "The hope was that advertising would pay for everything. That's not necessarily a flawed model. It has just been a lot harder than most people thought." [NY Times]

The advertising-based model comes down to traffic, which in turn is based on quality of content and marketing. In the blog world this means links, mentions in the mainstream media, and reader loyalty. We are very excited here to be well on our way to seeing this model proved viable. We have our writers to thank for the very fine content and link foundation, our fellow bloggers for additional links, and the mainstream media for recognizing us on a regular basis. Thanks to all.

Can the entertainment industry afford to give away content? Not in its current structure, although broadcast TV has down very well with advertising-supported free content for 50 years. Blanket licensing at the "pipe" level would seem to be the model that would incorporate the best of paid and free content models.