He raises a great point about the new nature of free but I don't quite agree with his proposal to charge for niche items and give away popular items for free.
It seems to me that the market will be significantly more subtle than this. Popular items will be the easiest to charge for (think about the excitement about the Harry Potter books) but they could also be used to promote stuff (give away music but then make money from concerts).
By his logic, niche items can be free and most likely will be free. In my view, you will be able to charge for niche items that are extremely popular relative that niche (consider how expensive general math books are) or for content that is markedly higher quality than the free stuff (think premium software, i.e. Oracle vs mysql).
The real difference between what I pay for and what I won't pay for is not so much "long tail" vs. popularity but "specialness" which include exclusivity, insight and trust.
Walt Mossberg of the WSJ is really popular in tech so it's not very "long tail" but he has the exclusivity, insight and trust worth paying for.
It seems to me that the market will be significantly more subtle than this. Popular items will be the easiest to charge for (think about the excitement about the Harry Potter books) but they could also be used to promote stuff (give away music but then make money from concerts).
By his logic, niche items can be free and most likely will be free. In my view, you will be able to charge for niche items that are extremely popular relative that niche (consider how expensive general math books are) or for content that is markedly higher quality than the free stuff (think premium software, i.e. Oracle vs mysql).