1. The world of bits

The question ‘what can we control?’ underpins both the information society and the knowledge economy, and represents the maturity of information technology. Most importantly, it signals a transition from a world that saw economic value in terms of atoms to a world which values information in bits. This chapter examines this transition and the role of bits in the information society. It first provides an overview of bits and their place in the digitization process. The chapter then looks at the advent of digital music and other digital goods such as digital video and electronic books. It also considers the shift from rivalrous goods to nonrivalrous goods before concluding with a discussion of the legal challenge of the information society.