Chad Perrin: SOB

26 August 2009

It’s not my fault your business model sucks.

Filed under: Liberty,Profession — apotheon @ 10:37

(The following was inspired by a question asked in response to The Mythology of Intellectual Property.)

There are innumerable ways to make money without copyright — and, in many cases, people are already doing so and may not even realize it.

For instance, for the most part signed bands use record sales solely to pay off debt incurred as part of their record deals for purposes of getting initial record publishing and distribution done; they get their actual living wages (on the rare occasion when they can make a living from music) by playing live gigs and selling merchandise. They may not actually realize it in many cases, but for most professional musicians the real financial benefit they get from record sales — the one part of the profession that requires copyright — is advertising. The record labels get profits directly from record sales, while the musicians just get well enough known to be able to make money at their live shows. News flash; it’s a lot cheaper to distribute yourself over the Internet, and let people burn your CDs if they want to, than to pay out the nose to have some suited schmucks at Sony/BMG make money off you and only advertise for you incidentally.

For other examples of how people can make money without jealously guarding their intellectual monopolies, look at Cory Doctorow (he keeps making his books and short stories available for free online); Radiohead, Nine Inch Nails, and Harvey Danger (made more net profits off records they basically gave away than on albums distributed through the usual channels); and Websites that use movies and other video productions to drive traffic to them so they can make money through secondary effects (such as on-site advertising, merchandising, and so on).

There are also services such as fundable that provide an easy framework for getting people to pledge money toward the eventual free release of something. You create something, ask for a particular target value in contributions and, once you get the money, release it to the world; voila, you’ve been paid. A number of writers have used this to finance authorship of books, and a number of musicians have done the same for production of album-length collections of music.

I make money by writing (both articles in English and software source code), in fact — far more than the piddly quantities I get from advertising on this obscure site — and I would love for copyright to go away. It’s not like I’m working in manufacturing and advocating for someone else’s industry to change all its rules. I’m talking about what I want to happen with the very fields of endeavor where I make money. This is why, every time I can reasonably do so, I attach a copyfree license to everything I create — usually the Open Works License.

The real answer to the question, though, is much simpler than all of the above:

It’s not my fault your business model sucks.

I’ve said it before (more than once in fact) and, given half a chance, I’ll say it again.

8 Comments

  1. I appreciate the follow up. I myself am a software developer and hobbyist writer. I dig the idea of abolishing copyrights, trademarks, and especially patents; but everytime I play it out in my mind, I don’t see an advantage to giving it up completely.

    I feel that those creative enough to produce these works that I enjoy so much should be compensated, but when I think of how the whole process would work sans IP law, I keep arriving at the conclusion that the creator is going to get screwed.

    Because it seems like the only way to profit from your creativity becomes merchandising, but if anyone can sell your work, those that already have established marketing, manufacturing, and retail processes will benefit the most; in other words the same companies/people that are screwing artists today.

    The Fundable approach sounds good on paper, but it doesn’t sound viable to depend on it. It can be bad for both parties since as the fan/consumer, you are not guaranteed a quality product and the creator is guaranteed anything.

    Maybe the concept of copyfree would work in a more utopian society where consumers would actually do the right thing and buy (or otherwise support)products from the artisan instead of the cheapest, most readily availble version at Walmart.

    Anyways, this is probably the most exercise my mind has done in a long while, I appreciate the posts.

    Comment by Mad Brew — 27 August 2009 @ 05:35

  2. I feel that those creative enough to produce these works that I enjoy so much should be compensated, but when I think of how the whole process would work sans IP law, I keep arriving at the conclusion that the creator is going to get screwed.

    Two points:

    1. The creator is already screwed. Creators don’t “own” shit, currently; large corporations do. Don’t think about the millions that can be made from writing something — think about the piddly leftover scraps the writer actually gets out of it in the Real World, and how a good business model can result in greater income than that. Consider also that things are only getting worse under the current copyright regime for the individual creator, not only because corporate control of industries that depend on creative workers is tightening all the time, but also because people are increasingly bypassing the law and there’s nothing we can do about it. As technology advances, copyright law becomes increasingly unenforceable, and further attempts to make it enforceable will only make things even worse as they result in greater restriction of free speech, greater invasion of privacy, and greater harm to those who aren’t even involved in copyright infringement.

    2. I’m sure all those creative people of whom you speak are creative enough to come up with alternate business models, especially when many people are already using such business models and serve as examples of how they can make a living. Given a little time, some standard, widely proven models will evolve, and they’ll replace the current copyright dependent model. Markets adapt, but when they adapt to government interference they lose efficiency. Considering that markets drive generation of wealth, and wealth generation is what raises the standard of living for people all over the world, lost efficiency in markets is not an acceptable loss; meanwhile, the very creativity of the people whose livelihoods depend on the product of the intellect is the best guarantee of their success in a market that doesn’t depend on government enforcement of monopolies.

    Because it seems like the only way to profit from your creativity becomes merchandising

    A couple of points:

    1. Counterexample: Radiohead made good money directly off music downloads without actually requiring anyone to pay for anything, and without trying to prevent free sharing of what was downloaded.

    2. Definition: Software installer CDs, music CDs, movie DVDs, and even physical books are just “merchandising”. The actual content is what’s recorded on those media. You’re already making money off the merchandising, if you’re making money in traditional markets trading in the product of the intellect.

    if anyone can sell your work, those that already have established marketing, manufacturing, and retail processes will benefit the most; in other words the same companies/people that are screwing artists today.

    They’re also the people most likely to be hurt, and come tumbling down as the market shakes up — and, frankly, you don’t need established marketing, manufacturing, and retail processes to distribute your works and make money:

    1. Musicians only need to produce one copy of their work, then use the Internet to spread it far and wide as advertising for live shows, Websites, and so on; any money they make directly off that first recording of the music is just gravy. You should know as well as I do that merchandising from the official source will sell better than knock-offs, too, especially if you put autographs on some of the merchandise.

    2. Materials paid in advance by methods such as those provided by the Fundable site I mentioned above allow you to ensure you get paid up to a specific minimum standard before anything is released, and it has worked for creative people already — it’s not just a theory.

    3. Industry giants would still try to be first to market with something; that’s where most of the money is currently made in creative industries, because people want the first run and not just reprints most of the time. This is part of the reason the first print run of a novel is an expensive hardback rather than a cheap paperback. It’s also why first editions of works of literature are worth so much more to collectors than twenty-fifth editions, all else being equal.

    4. Some people just want a free lunch — but, considering the way grey markets in digital copies of copyrighted works are going, they’re going to get their free lunches no matter what happens. Other people like to support their favorite creators, though. Consider me as an example: I’d love to buy music from my favorite recording artists, but I’ve sworn off giving any money to the RIAA and its member corporations. Given unencumbered digitial files for a reasonable price, I’d rather pay for good music from the source than hunt around for someone willing to give it away, and I refuse to give money to someone who thinks he has the right to force me to pay rather than accept it for free from a friend. Meanwhile, I wouldn’t refuse a friend’s offer to share something I would otherwise never have heard, and if I like it, that might cause me to pay for more music later. Free music distribution really is advertising, and you don’t have to ensure that everybody who listens to your music has paid for it to make a living. You don’t even have to necessarily make sure they’ve all paid for it to make a better living than you likely could under strict copyright enforcement.

    The Fundable approach sounds good on paper, but it doesn’t sound viable to depend on it. It can be bad for both parties since as the fan/consumer, you are not guaranteed a quality product and the creator is guaranteed anything.

    As a consumer, you aren’t guaranteed a quality product if you go buy a book or CD in a store, either. I’m still disappointed by book purchases from time to time, in part because I want to try new authors once in a while. Back when I actually bought CDs without concern for whether an RIAA label produced them, I was regularly disappointed by the shitty quality of what I got, when I purchased something from a band that didn’t have a proven track record for quality that matched my tastes.

    The whole point of Fundable is that it provides a guarantee for the creator if consumers show interest, though. If they don’t show interest, you’re screwed anyway. I don’t see how the creator is any worse off if Fundable fails him than if the RIAA or the book publishing industry fails him. If you drum up interest by giving away a couple creative works for free first (the sort of thing a major corporation would call a “loss leader”: products as advertising for other products), you can build significant interest and support for a new work, and get a lot of people to pledge money to the cause.

    Maybe the concept of copyfree would work in a more utopian society where consumers would actually do the right thing and buy (or otherwise support)products from the artisan instead of the cheapest, most readily availble version at Walmart.

    It doesn’t require a utopian society. You seem to assume that everyone needs to be on-board for it to work at all. All you need is for enough people to support the artist — not all people. People who want to support creative workers who develop quality work already exist.

    Anyways, this is probably the most exercise my mind has done in a long while, I appreciate the posts.

    I appreciate your interest and discussion. I’m also glad you’re finding some value in it — even if I’m not getting paid for that value. Hah.

    Actually, to the extent these ideas get spread further, and more people seriously consider them, I feel like I’m “paid back” anyway.

    Comment by apotheon — 27 August 2009 @ 08:48

  3. Shakespeare didn’t need copyright, and Archimedes didn’t need patents.

    Comment by Chip Camden — 27 August 2009 @ 09:07

  4. I think the example of the musician is the best, because they can earn a living from performances. If I could somehow make my brain apply that dynamic to other forms of entertainment (which seems to be the most significant part of copyright), I wouldn’t hesitate to destroy the legacy of copyright (trademarks & patents I think I can do w/o entirely).

    I agree the copyright climate is worsening; beginning with the Mickey Mouse Act, it has quickly become just another bastion for corporate control of industry/markets.

    While I think I have plenty I would like debate about, I think where our thoughts truly differ comes down to this statement of yours:

    It doesn’t require a utopian society. You seem to assume that everyone needs to be on-board for it to work at all. All you need is for enough people to support the artist — not all people. People who want to support creative workers who develop quality work already exist.

    I don’t think everyone needs to be on board, but I do believe there wouldn’t be enough people that would support creative workers. My faith in humanity, particularly the variety that I share the U.S. with, is practically non-existent.

    @Chip: The speed of information and methods of delivery have significantly changed since Shakespeare and Archimedes, so I while I can appreciate the sentiment, I don’t think the comparison is applicable.

    Comment by Mad Brew — 27 August 2009 @ 10:13

  5. I think the example of the musician is the best, because they can earn a living from performances. If I could somehow make my brain apply that dynamic to other forms of entertainment (which seems to be the most significant part of copyright), I wouldn’t hesitate to destroy the legacy of copyright (trademarks & patents I think I can do w/o entirely).

    Authors could directly monetize “peformances” (readings and book signings) pretty easily. In fact, the current practice of using signings and readings as advertisement for the book has kind of turned the whole thing on its head; things should work the other way around, but corporate control of copyrights has made it essentially impossible to do things the more natural way, and ensured that the author gets only a tiny percentage of the money he could make.

    I don’t think everyone needs to be on board, but I do believe there wouldn’t be enough people that would support creative workers.

    I think there would be exactly enough, because markets reach equilibrium between supply and demand by way of price (as adjusted by other contributing factors, of course). It’s a core principle of economics, in fact, and it works because people who care about quality are willing to put more time, effort, money — whatever resource they have available — into getting that quality.

    My faith in humanity, particularly the variety that I share the U.S. with, is practically non-existent.

    You should understand that I’m not talking about people giving creators money out of the goodness of their hearts (though some few patrons of the arts would certainly do so — and some already do). I’m talking about people supporting something merely because they want more of it. I don’t want to give money to musicians and authors just because I think they deserve it; I don’t even know most of these people, so I have no idea what they deserve. Maybe they’re terrible people who deserve to die destitute and alone (for all I know). I want to give them money because I want to encourage them to give me more of what I crave: good music and writing.

    Even if they haven’t thought it through that far, there are at least hundreds of millions — if not billions — of people in this world who feel the same way, and are mostly limited only in what they can afford.

    The speed of information and methods of delivery have significantly changed since Shakespeare and Archimedes, so I while I can appreciate the sentiment, I don’t think the comparison is applicable.

    How exactly do you think that the ease of distribution makes people less likely to create new works and even profit from them? I think quite the opposite is the case, because the more broadly you can distribute something, and the more quickly you can distribute it, the more money you can make and the more you can shorten the gap between creation and profit — even if the average payment per recipient is smaller. Is it better to get paid $500 by a single rich patron or $1 each by 5,000 average citizens out of a total of 50,000 recipients?

    Comment by apotheon — 27 August 2009 @ 12:12

  6. A slight variant to Mad Brew’s thought is that there wouldn’t be enough people to support a wide variety of creators. I think you would see a sharp narrowing of market demand. Only small, select types of creative work, and from an even smaller pool of creators, would be viable as a means of sufficient income to support full-time creators. Not that I’m opposed to seeing this happen, even considering how it would affect my own hopes of becoming a full-time novelist.

    Comment by Kameron — 27 August 2009 @ 12:14

  7. Actually, I think your chances of becoming a full-time novelist might improve, though it would probably require writing more to gain meaningful entry to the market. While it would take more initial writing (assuming you’re good) to gain an audience that’s willing to pay a living wage for your work, you could spend more time writing and less of it hustling because when you aren’t constrained by a business model that is dominated by gigantic publishing houses in New York City there are no gatekeepers preventing people from entering the market.

    It’s a bit like the difference between starting a small business of your own and getting a nine-to-five job with a gigantic faceless corporation, except that it’s easier to start building a customer base as a writer than as a consultant or business-model competitor to Microsoft, and it’s harder to get published by Random House than to get a regular work-a-day job with a corporate employer (as long as you’ve jumped through the requisite hoops to meet the posted job requirements).

    Comment by apotheon — 27 August 2009 @ 12:27

  8. I think the opposite is true, Kameron. As things stand, people are used to funneling their money through publishers who choose a very small percentage of content providers to make available. If that funnel were removed, then more open market mechanisms for choosing and compensating content would be more likely to evolve more quickly than they currently are.

    Comment by Chip Camden — 27 August 2009 @ 12:27

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All original content Copyright Chad Perrin: Distributed under the terms of the Open Works License