This is one of a series of posts; the last post was here.
But even with the rise of copying started by Xerox, copying on physical media—paper, cassettes, VCR tapes and DVDs—brought with it critical limitations that ultimately restricted how much content could be distributed by consumers: it is just hard for consumers to share stuff. Most of the problem is organizational. Before the VCR, we had come up with a good way to share only two things: books and tuxedos. That isn’t quite right, but you probably see the basic point.
We shared books through libraries (and eventually, LPs, music cassettes, CDs, VCR tapes and DVDs). Checking out a book through a library substitutes for owning the book. You might want to read Philip Roth’s latest novel, but not feel any pressing need to own it, which is more expensive and brings with an inventory problem (put the book on a book shelf? Toss it? Pass it on to someone else?). Libraries organize the sharing of books. Used book stores do the same thing, though with different risks. We also share items that we need only rarely—floor sanders and tuxedos (but not wedding dresses!). The VCR and then the DVD created a new category for content sharing—the video store—and brought us Blockbuster, Hollywood Video and Netflix.
But the Internet changed all of this. The Internet is an almost-organic mix of actors and their machines, an eclectic scheme of government and private-decision-making, of non-profits and for-profits. We have moved from centralized processing power accessed through distributed dumb terminals (the 1970s) to distributed processing power in freestanding PCs (the 1980s) to, with the rise of the Internet, highly-interconnected PCs (the 1990s). 1970s centralized processing was coupled with centralized control, a Soviet-style computer architecture. Users were eager to control their own destinies and the personal computer made that possible.
Networked PCs created a distribution network for content, and Napster demonstrated the power of the new distribution tool. Buy a CD, rip it and unload it. All music available to everyone all of the time. Napster threatened the copy. If anyone could take a song, copy it and distribute to the world, we really would have entered a SOFE world: sold once, free everywhere. This would be full-scale substitution of copies for originals. As a legal construct, the copy would have little meaning. The copy right would be unenforceable, and a business model based on selling copies or on control of copies would no longer be tenable.