Naturally people want to know, "How can you compete with free?"
Kevin Kelly, former editor of Wired Magazine and a leading digital thinker, has a compelling answer: "When copies are free, you need to sell things which can not be copied."
And what kinds of things are those? Well, trust, for one thing.
Trust cannot be copied. You can't purchase it. Trust must be earned, over time. It cannot be downloaded. Or faked. Or counterfeited (at least for long). If everything else is equal, you'll always prefer to deal with someone you can trust. So trust is an intangible that has increasing value in a copy saturated world.
You should go and read his whole post on this subject, which expands on a list of eight attributes he argues can make you better than free: immediacy, personalization, interpretation, authenticity, accessability, embodiment, patronage and "findability."
Thanks to Phillip Lenssen for the pointer.