As a copyright producer of both music and software I really feel copyright protection is moral and just. The damages awarded for copyright infringement for personal use are clearly ridiculous and should be seriously limited. Also I think both copyrights and patents terms should be reduced and the originality threshold for patents has to be increased. Each patent term should be determined separately with reference to how expensive something has been to bring to market and how novel it is.
That of course is not to say that the balance is a good one right now, still, it's not just the producers that benefit, it's the public who gets access to things the producer creates because he/she has a means to make some money from it.
In my option IP law does little to promote the creation of quality works instead it promotes churning out low quality crap because you must pay before you can view. IMO you could produce a much more effective system by limiting the High Definition version of a movie while not protecting a standard definition copy of a movie. Thus you could watch any movie for free but you would need to pay to see it in HD or in theaters.
You could do the same thing with books and movies. You're free to download a text file but if you want the pictures or fancy formatting you need to buy it. Ditto for low bit rate MP3 vs. lossless copies.
I'm not sure what the answers are, but I still like the idea of looking at it as a compromise between producers and consumers that should give something to each one. Giving nothing to the producers will discourage production of those kinds of goods. Give too much power to the producers in an age where copying is so easy means using fairly heavy-handed and invasive government power to enforce their rights.
Probably more information than you needed.
Information is inherently free because information is basically numerical, and anyone can (potentially) think of any number. However, information is only useful when the numbers are correlated with actions or objects. It's this correlation that is truly valuable, and the creation of the correlation requires resources (i.e. time and energy).
That day is today, actually. http://thepiratebay.org/
There are not contracts that stand up in court under those circumstances. There clearly is no real contract here -- where "contract" assumes "agreement".
Music downloaders are not free riders. They've broken the law (at least the uploader has clearly broken his contract with the artist not to do this). In a classic public good case, like the flood valley and dam, the difficulty is that people who own property in the valley, and break no laws by continuing to farm there, benefit from the flood control that the dam owner can't prevent from affecting their property.
Which is only a problem because it gives them an incentive to get their neighbors to pay for the dam, while not doing so themselves.