The cost of digital goods isn't in the copying or "maintenance" as you say, it's in the initial production.
Copyable digital goods are special because unlike the majority of physical goods, they are templates that can be used to make virtually free copies of themselves.
The first copy still needs to be paid for somehow, as do improvements.
A free rider problem exists if the unwillingness of people to buy copies because they can easily avoid paying, results in these first copies not being produced.
Your analogy doesn't counter this at all. You are simply suggesting that some digital goods can be financed and given away for free because they enhance the value of a service or non-digital good that provides revenue to the creator. I don't dispute that this is a valid option for certain kinds of good.
I do agree with you that trying to 'punish' customers or potential customers is a mistake, even if they are free riding on your business model, but I think that's a separate issue.
Let me get this structure right, so that I can be sure that I understand you, before you go on. (I'm a little perplexed because if the first copies weren't produced, that would obviate the willingness of people to buy copies in the first place.) You're saying, I think, that some art may never be: and this is because the artist is not convinced that they can make it profitable, and this is because they see their audience as too far predisposed to pirating their content to actually pay for it.
If that's right, then it's true that I'm not really handling that problem with my original analogy -- I wouldn't even really classify this as a "free rider" problem per se.
One question which I'd like to ask up-front is whether this is really a problem. I'm not so sure. If you think about it, it requires a really peculiar set of circumstances. One particular problem is that if you didn't have piracy, that doesn't mean that the pirates would be your customers. So you are very restricted in price range: you have to be unable to amortize the costs of the project normally, but you have to be so addictive that pirates would be your customers and you could amortize the costs of the project if piracy weren't a factor. I'm not saying it's impossible, I'm just saying that the more I think about it, the harder it is to come up with a clear example that I can use to think through to find a solution. (Maybe I'm peculiar, but that's the way I think about problems: I call particular instances to mind and throw lots of ideas against them hoping one of them sticks as a solution. I'm having trouble seeing a particular instance which wouldn't already be solved by, say, Kickstarter or the BBC.)
Well, thanks. It's interesting to think about in any case. I guess I'd just end on a hopeful note: hopefully the production costs for art steadily drop down as well, as more and more technology becomes cheaper. There will be human-professional costs that cannot go down because people have got to eat, but they just don't seem like the most significant costs in producing art -- at the very least, bands haven't stopped living off of live shows yet, and theaters can still cover their actors and set staff with simple ticketing. I will also make the hopeful comment that people really do care about authenticity enough to support artists. That's why fashion design can still be lucrative even though there's a huge industry dedicated to knock-offs.
Let me get this structure right, so that I can be sure that I understand you, before you go on. (I'm a little perplexed because if the first copies weren't produced, that would obviate the willingness of people to buy copies in the first place.)
I assume you're pretending to be perplexed for effect here as it's standard economics to recognize that people will not produce goods if they don't anticipate making a profit.
Kickstarter is an interesting counterexample - basically get sufficient people to pay up front before production begins. Of course that may not work for everything, but then nor does any system.
The BBC? You mean impose a mandatory annual license fee on computer users and then give it to a state owned software company to produce digital goods for us?
(1) I don't have "effects" really; I don't have some delusion that someone other than you is reading this. I am perplexed because you defined a problem as, "if the unwillingness of people to buy copies because they can easily avoid paying, results in these first copies not being produced". That phrasing perplexes me quite legitimately because you have literally said that the problem is "if you won't buy something which does not exist because you can easily avoid paying for it." So I was very cautious to reread the problem in words much closer to what you're now saying -- "that people will not produce goods if they don't anticipate making a profit" -- in an effort to parse the sentence.
(3) No, I mean the British Broadcasting Corporation. You know, those guys who make Doctor Who. They are not funded by a mandatory annual license fee on computer users, and I would not describe them as a state owned software company. Nonetheless, when they produce a new episode of Doctor Who, it rapidly appears on BitTorrent networks.
Copyable digital goods are special because unlike the majority of physical goods, they are templates that can be used to make virtually free copies of themselves.
The first copy still needs to be paid for somehow, as do improvements.
A free rider problem exists if the unwillingness of people to buy copies because they can easily avoid paying, results in these first copies not being produced.
Your analogy doesn't counter this at all. You are simply suggesting that some digital goods can be financed and given away for free because they enhance the value of a service or non-digital good that provides revenue to the creator. I don't dispute that this is a valid option for certain kinds of good.
I do agree with you that trying to 'punish' customers or potential customers is a mistake, even if they are free riding on your business model, but I think that's a separate issue.