Many science fiction writers and readers recoiled in horror when Howard Hendrix (who was then the vice-president of the Science Fiction Writers of America) decried writers who give away their work online, calling us "webscabs" and threatening a future filled with "pixel-stained techno-peasants" whose fortunes had been destroyed because of us scabbing give-it-away-ers. Howard debated web-novelist/podcast-novelist Scott Sigler last week at San Francisco's SFinSF event, and Rick Kleffel recorded it. The debate is pretty civilized, but also often unsatisfying.
I confess that I don't understand Howard's argument — it seems to be that a world in which free text-files circulate is one in which readers stop paying for printed books. This isn't supported by the facts — indeed, there's plenty of evidence to suggest that the biggest problem writers have is that readers don't go to bookstores, and that books compete with MMORPGs and other networked activities for time. Giving away ebooks puts them on an equal footing with all the other online activities, and puts books in serendipity's way, where non-bookstore-going readers might find them. (Howard also seems to labor under the misapprehension that writers are being pressured to do free online releases, when the reality is that writers have to fight and spit and pitch tantrums to get permission to put their work online)
Part of Howard's argument seems to be that big corporations profit from the free circulation of materials online — ISPs, telcos, search-engines, hosting companies, etc. This is undoubtedly true, but not endemic to online solely. Bookstores, phone companies, newspapers, publishers, shipping companies, and so on — they've all profited through the ages from writers' activity. The important question for a writer who cares about writers' economic fortunes isn't "How much money does Google make from a world of free text?" but rather, "Do writers make more money from a world that has Google in it?" The answer to the latter question is an unequivocal yes — the easier it is for a work to be found, the easier it is for an audience to be found, the better off a writer is.
Finally, Howard characterizes supporters of online distribution as blind techno-optimists who've never heard of the law of unintended consequences. This is an ugly straw-man, visibly untrue. Liberal copyright campaigners are also generally the loudest anti-DRM/pro- Net-Neutrality/ pro- Free-Software voices, people who spend their lives warning everyone who'll listen of the danger of technology in the wrong hands.
The biggest expense a writer bears is search-cost: either directly (writers who self-publish and have to market their work to a diffuse audience) or indirectly (writers who "pay" their publishers 90 percent of the cover price to get their words into the hands of an audience). The lower the search costs are, the more leverage writers have. The net diversifies the ways in which works find audiences and vice-versa, undoing the 20th century's enormous trend to concentration and more bargaining power for fewer media companies. And that is good news for writers indeed.