That quote, taken out of context, is misleading — which is why it often is delivered in support of piracy and the claim that “people won’t pay for content.”
Quotes should be presented so as to accurately convey their original meaning:
On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.
Traditional media companies weren’t decimated because “information wants to be free.”
They were decimated because the people in charge of making money — often not the people in charge of making content — were bad at their jobs.
They clung to traditional ways of doing business despite the clear evidence that they were no longer profitable. They ignored current consumer preferences and behaviors, in favor of their own preferences (“subscriptions are awesome for us — let’s focus on selling subscriptions even if prospective buyers don’t want them!”).
They accepted vague, misleading claims like “information wants to be free” and “consumers won’t pay for content” as justifications for their failures to respond to market changes and adapt monetization methods accordingly.
To be fair, content owners are small players in a very big market, and that market is extraordinarily challenging. But for the most part, they don’t even try to adapt and succeed — they carry on with business as usual while actively choosing to participate in the very things that impair their control and profitability.
In short, they were decimated because the market works properly: sellers who fail to respond to the demands of buyers … while voluntarily giving away their products for free and deliberately positioning them as low-value …. tend to not make much money.