[briholt]

Turns out writers weren't being paid for their songs, but were being paid for a portion of the massive markup on a plastic disk. Now that the disks are gone, the value of the song is laid bare. The same has largely become true for software. How many new Lotus's or Corels are being funded today?

[WalterBright]

Yup. The value of software has been driven literally to $0. Yet I still keep writing software :-)

[briholt]

Me too. But I write it for the web, so I get paid for the massive markup on web servers running the code.

[_dps]

I'm not sure if I'm missing sarcasm here; if I am I apologize.

But... this is obviously not how the world works. In the records and CDs era revenue was proportional to disks shuffled around. It is absolutely not the case that a typical web business has revenue proportional to the number of servers they employ.

The important point here is what economists call "trapping the value" and "pricing power": a CD full of music has lots of value, but the person selling the physical item was at one point the person controlling scarcity, and thus had pricing power, so they trapped most of the value.

Nowadays web business models allow developers to trap the value of their software more effectively. That doesn't mean they are piggybacking on the markup on web servers.

[briholt]

I meant we markup the computing power of the server (not exactly the purchase price). My host rents me a server that can perform X calculations for $Y/hour. I divide and resell that computation power, plus my software, to customers at Z markup.