I read on TechDirt that Paul Mulshine recently wondered in the online Wall Street Journal what the new revenue model would be for newspapers, or rather, what the new model for ‘compensating journalists’ would be, and if anyone could tell him.

Well, it does seem that to tell him takes an inordinate amount of arcane technical knowledge, even if it doesn’t quite take a genius.

Attempting to reply by following “Please add your comments to the Opinion Journal forum.” simply wastes your time by informing you after you attempt to submit your reply that the topic is closed.

And then, when attempting to contact the journalist directly you find that such a privilege is only available to WSJ subcribers.

This is not the right way for a newspaper to go about either obtaining an answer from its readers, or forming a constructive relationship with them. Furthermore, I doubt such hurdles will endear the most avid potential customers to the journalist, nor persuade them to realise their potential by getting out their wallets and encouraging the journalist to continue writing.

I have therefore decided to resort to the message-in-a-bottle equivalent of blogging about this in the expectation that Paul Mulshine will eventually find the answer to his question washed up on his shore (if he can find it amongst the sodden newspaper jetsam).

Online newspapers would do well to at least make a meagre attempt to test their readers’ experience of using their sites. The last century may have brainwashed them into thinking that feedback can only occur via ‘Letters to the Editor’, but they should have the intelligence to check that their online equivalent actually works – rather than cast aspersions against the ability of their readers to ever exhibit any intelligence.

So, here’s my answer to Paul Mulshine:

Good news will always be valued.

Unfortunately, copies are extremely cheap to make, and ever greater numbers of people are paying a black market price for them rather than the monopoly price, i.e. paying nothing instead of something.

Instead of a revenue model that depends on monopoly protected sale of copies of news, you’ll have to move to sale of news. Sell what people want (news), not that which they can make themselves for nothing (copies).

Fortunately, the very device that makes copying so cheap is the same device that makes communicating with one’s customers so cheap, i.e. The Internet.

So, form a bi-directional relationship with your online customers (see VRM) and sell the news to them, and moreover, encourage a free market in copies (rather than the black one that exists anyway).

That’s what the new revenue model is.

Too many people remain mystified that an MP3 that is free to copy or download can still become the best selling album, i.e. Ghosts I-IV by Nine Inch Nails.

That is a quandary that results from the copyright inculcated tradition of conflating the copy with the art. This is why people have so much difficulty figuring out why people pay for that which they can get for nothing.

So, let’s separate the copy from the art:

• Those who value the art should pay the artist.
• Those who value the copy should pay the printer.

There will thus remain a residual market for valued souvenir/collectible copies, e.g. vinyl.

However, in the digital domain the Internet is dissolving the idea that the art (and the commission to the artist) is bound with the copy.

We should then recognise that art should be released from the impotent shackles of copyright, changing from black to white a free market in the production and distribution of copies – distinct from the production and publication of the art.

Why should the artist receive a royalty from someone else’s hard labour in producing a copy?

Let the artist be paid for their art, not the production of copies.

The difficulty facing audiences today is figuring out how they can pay the artist for their art, given they don’t need to pay them (or anyone else) for copies.

For example, if you’ve already downloaded the MP3 copy for free, but want to pay the artist for their art, why also pay Amazon for a copy you don’t need? Why should Amazon get a cut of the money the audience wants to pay solely to the artist?

I’m amused by Mike Masnick’s astute observation in Newspapers Are Souvenirs that a blip in sales of newspapers around Barack Obama’s presidential election is not necessarily indicative of a preference for the paper and ink based medium during important events – it could be indicative of an abnormally high value placed on permanent and authentic copies produced by a news vendor, e.g. for souvenir, archive, memorabilia, or collectability value.

This is just one of those peculiar circumstances in which a newspaper is valued for being a copy of the news, rather than for being a convenient means of obtaining the news (and commissioning it).

So, as Mike suggests, now is not the time to be buying up old printing presses for an apparently growing market for paper copies of news.

It still seems as if the future is to sell the news, and then without the anachronistic monopoly of copyright, enjoy a free market in printed copies for whatever price the market will bear.

As an early example of this we have such novelties as WikiTravel books being published (uncontrained by copyright). The online information may be copied without charge, so the value of a book printed from it must be wholly due to it being a material book, and thus its value attributable entirely to its printer – not its authors¹.

One of the key requirements for business success concerning intellectual works (without monopoly) is working out whether you’re selling the copy or the intellectual work.

With the monopoly of copyright, they’re notionally bound together. That’s why it’s so difficult for people who’ve grown up with the equivalence of ‘copy=work’ to figure out what the flip I’m talking about when I try and explain that they’re as different as a map from the land – the copy is not the work.

If one doesn’t understand Magritte’s “Ceci n’est pas une pipe” then there’s a long way to go.

Given copyright is ineffective today (and as unethical as ever) it’s now vital to be able to distinguish between them – the work and the copy.

Once the producer of the intellectual work has exchanged the value of their labour for whatever the market can bear, that’s the end of the matter. Authorship is not entitlement to royalty (this is a prerogative of kings). Moreover, the author also remains unentitled to the value of any material or intellectual work other people add to it or incorporate it into.

___________________________

¹ I’m talking about the value of the book, the material copy that is the book. The value of the intellectual work within the book is of course entirely attributable to its authors – and they have already exchanged the value of their labour. If you buy a WikiTravel book you are paying its printer – not its authors. If you want to pay its authors for their intellectual work you should pay them.

Perhaps unsurprisingly, when I suggest to a musician that they should sell their music rather than copies of it, they probably think I may as well be suggesting they crack the pointed end of their eggs rather than the blunt end, as if either suggestion might just as effectively improve their life.

It is not obvious to me how to succinctly explain the difference between selling music and selling copies. This is related to the psychological disorder of copy-blindness. If you have it, you’ll find it very difficult grokking the difference. If you don’t have it, you’ll find it difficult understanding how anyone can’t grok the difference.

Following on from this, is the difference in value between music and copies of it, and how the value of copies (unlike music) has changed relatively recently. Therefore, because the value of copies has diminished, it seems nearly everyone concludes that the value of music has diminished. It hasn’t.

There is actually a colossal difference between music and copies. And it’s not sophistry.

Every man and his dog can make copies of great music for next to nothing – irrespective of the publisher’s traditional monopoly we call copyright. So of course, copies aren’t worth much at all these days.

Nevertheless, very few people can make great music, regardless of whether it costs them much to produce and record. Consequently, music remains just as valuable as ever, although it’s still very much in the ear of the beholder as to which of it is great and which of it isn’t. Thus few people want to pay 99p a time to audition a hundred songs before they find something they like. However, they’ll be very happy to persuade the musicians they do like to produce more great music, perhaps at a tenner a time.

So music remains valuable, whereas copies do not – especially digital copies. This is unfortunate for manufacturers of copies (publishers), but not for musicians (except those still indentured to publishers or record labels). Fortunately, musicians have never had to sell copies, and they don’t need to start.

There are two ways musicians have traditionally made money from their music: performing it before an audience, and recording it for a publisher of copies (aka a record label).

Unfortunately, publishers have organised their business on the large mark-ups they can obtain given a monopoly on the production and distribution of copies. A monopoly that was over-generously provided by not particularly scrupulous governments a couple of centuries or so ago.

As the tide of nature comes racing back to restore the public’s cultural liberty, we see the publishers’ privilege of copyright become less respected, its monopoly almost completely ineffective. Nature never did imbue individuals with the power to control what other people do with the material and intellectual works they give or sell to them. To be in receipt of a grant of such power, a legislated suspension of the public’s liberty, is neither an entitlement to respect, nor a way of earning it. When we erect sandcastles on nature’s beach, we cannot be too despondent when nature washes them away.

Anyway, now that the record labels are disappearing, musicians can no longer sell their music to them, and so are wondering who to sell their recordings to and how. Their audience is the obvious answer. However, whilst they’re quite used to selling their live performances to their audiences, selling recordings to them is not something they’ve ever done before. So, the question of ‘How?’ remains unanswered.

What we have today is the sorry sight of musicians who don’t know the answer, going through the motions of being their own record label and attempting to sell copies where their labels cannot.

The thing is, if labels needed a monopoly to sell copies, and considerable wealth to enforce it, then it’s inescapable to conclude that a self-publishing artist is going to have even more difficulty relying upon a monopoly – despite having far less overhead than a label. Moreover, given that a musician’s audience can make their own copies, one must deduce that if they do appear to be purchasing copies from musicians, that this is either convenience, indoctrination or patronage at work.

So, if a musician is to sell recordings of their music to their audience, instead of copies, then how do they do it?

We have the artist and their recording on one side of the table, and the audience and their money on the other.

All we need is an exchange. Art for money, money for art.

Well, if the artist can sell a live performance to an audience of ten thousand fans, why can’t they sell a studio recording to the same audience?

Admittedly, ten thousand fans don’t really want to turn up at a large stadium, hand their tickets in, and then file back out again despite knowing they’ve just paid for a studio recording – even if they are handed a free copy of it on their way out. It would seem there’s a far more efficient way of doing it online…

Why not sell tickets to your audience online, but tell them that this is for a recording rather than a performance? What’s more, you can tell them that they don’t need to come to the stadium. Instead they can stay at home, and a free copy of the recording (copyleft and in FLAC format) will be e-mailed to them (or at least a link to where it can be downloaded via BitTorrent).

Just as with a concert, you’ll refund everyone’s money if the recording doesn’t go ahead, perhaps because not enough tickets were sold.

In fact, this approach also works for live online performances. You can sell tickets, and then (if there’s a big enough audience) use RawFlow to broadcast yourself live.

You can’t sell people what they already have, or can make themselves.

So, don’t try to sell copies of your music to your audience, sell your music to them instead.

If your audience wants to see and hear you play live they’ll buy tickets to your concerts (at stadiums or online). If your audience wants to have your new music recordings, they’ll buy tickets to your studio sessions (even if they’ve already happened).

As the market for copies ends, the market for music evolves.

Dear Digital Artist,

You asked if someone could succinctly explain what the future holds for digital artists.

Let’s have a go:

1. The market for copies has ended. You will never be able to sell copies again (everyone can make their own at zero outlay and extreme convenience).
2. People will not pay for what they already have – as a general rule.
3. However, no-one else can make art like you can. You still have a natural monopoly even if your unnatural one has ended, so exploit it.
4. Your art is your ambassador (don’t waste money or effort trying to force people to like you or your style). Therefore encourage people to promote your music by playing it, sharing it, building upon it, and ideally letting people know it’s you who produced it. However, don’t get bolshy, demanding credit, or forbidding people from certain honest uses, e.g. making money from your art (you can’t expect funding if you deny it to others).
5. You don’t sell what you’ve already sold or given away (remember, people don’t pay for what they already have). You sell yourself and the art you’ve yet to produce and publish. Thus you invite your growing audience to patronise your artistic production (commission more work, or specific works).

So what does the future digital art production process look like?

• Production – provided by artist, funded by audience: patronage
• Promotion – provided by audience: word of mouth and online socialising, blogging, discoveral agencies, etc.
• Reproduction – provided by audience: individual and commercial file-sharing
• Distribution – provided by audience: individual and commercial file-sharing

From now on, it’s just you and your audience. You make the art, your audience enjoys it and pays for more.

The publisher has disappeared from the value chain.

The copy as a saleable product has disintegrated – there is no copy – there is only art you have released and art you have not.

The market stall, the table across which you and your audience meet to exchange art for money, money for art, is the Internet, with its growing number of facilities that let you engage in agreeable business with each other.

Questions?

Who’s going to facilitate my audience funding me?

I and a few others (see Peers) are working on online facilities to enable direct payment from audience to artist.

What are these ‘discoveral agencies’ you mention?

They are services that help people find artists to their taste, e.g. Last.FM and Pandora help people discover new musicians based on the musicians they’ve already discovered.

Can I afford a commercial file-sharing service?

MiniNova is one that uses advertising to support its free reproduction and distribution service, so that should indeed be quite affordable. Also see alternatives.

I thought everything in the future was going to be funded by advertising?

Advertising is certainly going to play some part in the next few years, but that will diminish as the Internet rebalances communications between vendors and customers (see ProjectVRM). Until that time, yes, advertising can provide some funding. For example, there will be ways for people to redirect their website’s ad revenue as patronage (see JuiceTorrent).