You've got a million customers, followers and leads. And you're broke. Why? Your competition started giving their product away for free.
On the Internet, anything can be copied and everything is.
You can copy a song, this blog post, software, design, anything. Of course, customers tend not to pay for things they can get elsewhere for free. So how do these web businesses make money? They change.
A few models of note:
RedHat provides paid support for free software. Skype provides their VOIP service for free and charges for premium upgrades. These new business models have had a profound effect on the software and telecom industries. They are progressive capitalist approaches, but still vulnerable. Their business models can be copied and so can their products.
There is no such thing as scarcity or fear of loss anymore. If you're willing to put in the time, you can learn or do pretty much anything yourself -- middlemen beware, again.
To avoid becoming the music industry, start supplying things to your customers that can't be copied with the click of a mouse. Authenticity and insight are a good start.
If sharing and generosity aren't part of your business model, make it so. People will actually pay for it. Really.