Information goods derive their value from the information they contain, rather than the material they are made of. Examples include books, software, and online content. However, the rules governing ownership of information goods are complex due to the ease of copying without destroying the original.
An information good is something that is valued for the information it contains rather than the material from which it is made. A common example of an information good is a book. The paper and glue that make up the material part of the book are not what generate the price of the good. The price is derived from the written and drawn material on the pages. These goods are contrasted with a physical good, the value of which derives from the material of which it is made and the final form it takes.
What actually constitutes good information is often not as direct as material goods. In most cases, books, magazines, music and movies are based on information and the physical method of delivery is not important. These terms have been extended to include computer-based software, documents, and other materials as such items have become more common.
Even if an information good is valued for its content, it will typically also have a physical component. The books are made of a variety of papers, glues, even textile products such as string or fabric, and the software is usually packaged in a paper and plastic box. While these physical components of the goods are tangible, the real value of the good is only marginally affected by its cost. If a bundle of video games didn’t give access to the actual game, consumers are unlikely to attach any value to the product.
Some information goods are more likely to exist as simple information. One of the earliest examples of this is pay television broadcasting; a consumer would pay for the service of sending information through his television. The programs actually viewed were purchased information that used a physical asset – a television – for consumer interaction. A more modern example is online software. Users can purchase the software online and then download it to a computer, making all electronics good.
While the rules that govern material goods are very simple, those that govern information goods are not. Since an information asset can be perfectly copied without destroying the original, the ultimate ownership of the information will often become unclear. For example, if a person owns a piece of music and copies it as a gift to his friends, this is illegal, unlike a material object, which is generally free to give away. If so, the ownership of that music is in doubt. The consumer may have purchased the music, but have only partial rights to it.
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