One of these is not like the others. As you were just pointing out, we can make free software without those inputs. Your category of "professional software" includes an image processing program, but not operating systems, databases, and office suites? Even about Photoshop you are talking through your hat. Evidently you have never encountered the GIMP.

This also includes the cost of financing which is a function of the risk of the venture. Higher-risk ventures require a higher rate of return as part of the fixed cost—start-ups and movies are expensive to finance.

That depends. All this really turns out to mean is that expensive things are expensive, and that money is sometimes expensive too. But, for example, extraordinary films are made all the time on budgets that are infinitesimal by Hollywood (or even Bollywood) standards. Expensive celebrity "actors," expensive promotion and expensive distribution (financed of course by purchases of expensive money multiplied by risk premium) are irrelevant to the production of compelling, informative, elegant and intelligent culture. So all this supposed economic sophistication is, to put it mildly, actually beside the point, as it is when the pharmaceutical industry talks about the cost of drugs.

A Survey of Business Models

Sharing. The free economy shifts the balance of power to consumers, providing on demand access to any digital good. For some, however, sharing raises ethical questions about misappropriation from other consumers. A classic free riding problem can occur, such that one group of people benefit from the contribution of another group of people (producers, sellers, or the buyers which pay and subsidize fixed costs) without their consent.

No. You're not describing the sharing economy, you're repeating bilge washed into your brain by the "content" oligopoly. In the sharing economy, producers and distributors have consented to the terms of sharing. They make production and distribution possible that otherwise would not occur, they give everyone value, and everyone has agreed to share. All the supposed problems, including the "ethical" problem you arrogantly claim we have, are therefore non-existent. I explained all this more than a decade ago in Anarchism Triumphant. Creative Commons, Free Software, the Wikipedia, and many other pillars of the sharing economy have arisen since, as I said they would. You're welcome to disagree about how all this plays out, but you're not welcome to distort the argument by assuming falsehoods.

For institutions structured to produce costly digital goods, this interferes with generating market compensation and leads to antagonism with a powerful and otherwise beneficial distribution channel. More people see the content but less profit is made.

Not necessarily. And at any rate that tradeoff is radically reductive. Is your view of the overall significance of the total replacement of the world's proprietary encyclopedias by Wikipedia, for example, captured in the proposition that "more people see the content but less profit is made"? Should we include in the cost-benefit analysis that we all have instantaneous access everywhere to information in a fashion that has changed everyone's life for the better? That we have democratized the production of knowledge in ways that will continue to transform the nature of human thought? That we have provided an experience of intense beneficial collaboration to hundreds of thousands of people around the world? Less profit? Even if that is true, who gives a shit? Economic rent is tolerable because necessary. Since when has it become an end in itself?

No, the difficulty is that the need to cripple the technology in order to support the service-restriction model distorts the technology. Flickr is not better than federated photo sharing through this thing we invented about 7,000 days ago called the World Wide Web. Dropbox is a ridiculous form of stupidity-reinforced privacy-destroying cloud storage than which all Columbia students already have better alternatives available for free that no one tells them about. There's no ethical attraction in making technology deliberately worse so that you can also sell people something they don't need at prices they shouldn't have to pay. Your analysis is only attractive if you're prepared to ignore everything that someone who disagrees with you might say about it.

This conclusion doesn't mean anything.

We're a little better off than we were in the last draft, but some significant problems remain. Your supposed ethical objections to sharing depend on outrageous factual falsehoods uncritically repeated. Your analysis of the "profit economics" of culture contains both some factual inaccuracies and some serious theoretical blind spots. The theme of the essay now sometimes seems to be that the future should be postponed if possible, for reasons that aren't very clear except that profit in the hands of a few is inherently good and the betterment of humanity is not enough of a reason to reduce it. The primary argument on the other side—that knowledge has always been strictly rationed in human society, unjustly, but necessarily, for reasons we can now avoid, thus allowing billions of existing human beings to escape ignorance—is not even acknowledged, let alone answered.