Micropatronage · Thursday July 16, 2009 by Crosbie Fitch
In NOT AN UPGRADE — AN UPHEAVAL Clay Shirky begins to warm to the idea of micropatronage – the radical idea that an author’s most interested readers might pay them to write and publish their writings.
If the journalist has already been paid for their writing, who needs to pay the manufacturer and distributor of copies of their writings? Does the public really need to continue paying the publisher a hundred times the revenue that they’d pay the journalist?
If the publisher truly does add 99% of the value of a published copy, then with a free market in copies, there’s no copyright monopoly to prevent the publisher producing a copy of the author’s work (at $0.0001), adding their value ($0.0099), and then selling it at $0.01 a copy.
I have a sneaking suspicion the publisher adds very little. We’ll find out what happens when the audience commissions the artist directly.
- Micropatronage = Disintermediation
It’s about time.
Traditional (Copyright+Publisher)
1,000,000 readers pay a publisher $1 for a journal comprising articles from 100 journalists. Each journalist gets $100 for their article. The publisher takes $990,000 from which they cover their modest costs.
Micropatronage (Copyleft/Abolition+Disintermediation)
Each blogger has 1,000 keen readers paying them a penny for each blog item they publish. That nets them $100 every ten blog items (for argument’s sake qualitatively equivalent to a single journal article).
An online journal, being free to copy the work of 1,000 bloggers (copyleft) and republish them, erects a paywall charging punters $1 to download a PDF containing 1,000 of the best blog items. Now each blogger has already been paid $10 for each item by their keen readership. The $10,000 it would normally have cost the journal to pay their writers has already been paid. They now get their writing free. The journal can also make and distribute copies at a fraction of a penny. So the $1 is now closer to 99.99% added value.
If the publisher sells a million copies they take $999,900 with negligible costs. Laughing all the way to the bank eh? That is, of course, assuming the market for copies hasn’t ended…
If it has ended there will still be a market for selectors. I suggest the selector is going to enjoy micropatronage as much as each writer. Thus the online journal (sans paywall) will actually get a penny from each of their 10,000 keen readers for each issue ($100). That journal may even state that it gives a 50% commission to each blogger it publishes – after all, it needs to encourage the production of good writing in order to be able to select it.
One of the vexing questions with content revolves around the word “value”. Of particular concern is the role of the distributor as “adding” value to a creators work. Before the rise of the internet, it appeared obvious because the distributor could prepare the product for market and then market the product to a large audience. With the rise of the internet content creators can fully prepare the product and reach potential buyers directly. So who needs a publisher anymore?
What I am leading up to is the concept that we need to be clearer concerning how a publisher actually adds value to a product. I would assert that the distribution of a product by a publisher does NOT add value to the product. However, if publisher is involved in preparing graphics, editing, designing the layout of the product, then one can assert that the publisher/distributor is adding some value.
However, it should be realized that all these value adding activities can actually be performed by the person creating the product. For example the content creator can hire his/her own free lance design team or their own free lance editors.
Seems that I am getting wordy. My overall point – the limited role of the publisher/distributor, in marketing a product, does NOT add value.
Comment #000306 at
2009-07-20 01:00
by
The price of a copy is higher than its cost either because its manufacturer has added value, has a monopoly, or is remedying a market inefficiency. I am admittedly being a little sardonic in suggesting a publisher’s 99% cut is mostly made up of added value rather than monopoly.
If the publisher is adding value then the loss of monopoly won’t hurt their bottom line. Indeed, without copyright, authors and audiences will continue to commission and patronise the publisher to obtain their valuable services. Thus the publisher’s extreme enthusiasm for copyright betrays a tacit admission that they add very little value.
Comment #000307 at
2009-07-21 07:29
by
Crosbie Fitch
Super-Negotiation · Wednesday June 24, 2009 by Crosbie Fitch
In P2P And Putting In Place A Workable Business Model Chris Gilbey is right to observe that the obvious alternative or adjunct to a monopoly on the manufacturing and distribution of copies is a tax on the distribution of copies. In other words, if people start ignoring the monopoly by making and giving away their own copies they can be taxed for the copies they distribute.
Unfortunately, all this is ‘obvious’ only from the perspective of a monopolist publisher. What those publishers and their friends in high places don’t want to recognise is that not only was the monopoly of copyright an iniquitous piece of legislation in the first place, but a tax would compound it.
Instead we should recognise that the publishers are being rightly ejected from their privileged position in the value chain. They aren’t needed for manufacturing copies, distributing them, retailing them, or even promoting them. The public can do this all by themselves thanks to the Internet, or as Chris describes it: ‘super-distribution’.
What may easily slip one’s notice is that hand in hand with super-distribution goes super-communication. In fact the former came from the latter.
One of the key commercial advantages of copyright in the 18th century was that it removed the then considerable costs involved in what should have been communication/negotiation between the customers of books (words, not paper) and the authors thereof. The printers (in pursuing their monopolies) were thus in an ideal position to commission the author’s work – to negotiate a price of the work on one hand, and the price of each copy on the other.
Now just as super-distribution renders the monopoly of copyright ineffective, super-communication also renders the prospect of an author negotiating with their readership feasible. They can eliminate the costs imposed on the value chain by the printer, publisher, distributor, and retailer, eliminate the promotional costs of copyright, and thus negotiate what may well be a more lucrative commission from their readers directly. The market for printed copies is thus free and independent of the market for the intellectual work (qv WikiTravel & WikiTravelPress).
What should have happened in the 18th century was that the readers commissioned the author directly (via subscription), and then printers competed with each other in a free market to print copies of the author’s work. No doubt subscription technologies would have improved no end in the absence of copyright – and the price of books would have been a tad lower.
Today, with copyright ineffective, necessity is spurring the invention of efficient subscription or negotiation facilities. This is what I’m working on (ContingencyMarket.com), a means of enabling the author to haggle with readers, the audience to haggle with the artist, to make a collective bargain concerning the exchange of art for money, money for art. After all, it’s art the audience wants to pay for, not copies.
So, I don’t think the future business model for intellectual work will be quite as complicated as Chris suggests (no compulsion, levy or tax should be necessary). It should actually be rather simple, e.g. the author says “I’ll sell my book for $10,000”, and 9,000 readers say “We’ll buy your book for $1” and then the author says “Aw, alright then, done!”. Well, perhaps that’s an oversimplification. The negotiations and exchanges will no doubt be far more subtle and fluid (low friction) – or will be when this approach takes off. But, the point is, the author no longer needs to pay the publisher for printing, distribution, and promotion. They simply need a tadette of money from their readers, their customers. In exchange, the readers get the author’s words, and their liberty restored to share and build upon published works.
As Chris says, we need to “get people to the table to negotiate”, and that’s the artist and their audience: the negotiator with the art, and the negotiator with the money. Having enabled their negotiations, and once their deal is done, both sides have what they want. The artist has their audience’s money. The audience has the artist’s art – and both retain their liberty (there’s no longer any motive to preserve the monopoly in the production of copies). As with WikiTravelPress, if any CD manufacturer reckons there’s still a market for copies of the art, there’s no monopoly stopping them. After all, you can still buy CD copies of Red Hat Linux, and there’s no monopoly to prevent anyone else making and selling copies of that.
We could call this direct exchange of art and money between artist and audience super-negotiation.
Really interesting concepts.
Just a a few quick comments/questions
“I’ll sell my book for $10,000”, and 9,000 readers say “We’ll buy your book for $1”
So, the author should release the book (on a digital format?) once he received the $9000?
How would buyers/readers do the payment “all at the same time”?
Or is this somewhat similar to ransomware?
Comment #000300 at
2009-07-04 20:49
by
Maniquí
Ok, I’ve read the FAQs on ConvergencyMarket.com and now it’s more clear to me what is this all about.
Comment #000301 at
2009-07-04 23:04
by
Maniquí
> So, the author should release the book (on a digital format?)
> once he received the $9000?
That is the effective exchange, although bearing in mind the large number of patrons, it isn’t a single transaction, but a cascade. $4,000 may be cash in hand, $3,000 due from readers with a good credit rating, and $2,000 from those new to this revenue mechanism. It’s likely to match the advance+royalty revenue stream provided by traditional publishers (the role soon to be taken over by the audience). And don’t forget, the author doesn’t have to accept the deal if they don’t want to. Moreover, each would be patron can also change their mind (prior to any deal of course).
This is not the only approach – there are many (see PayyAttention for example). Some approaches I think are worth a try, and some I think are dubious. However, because as Dirty Harry is wont to say “A man’s got to know his limitations”, I have created the Contingency Market, a general purpose back-end, precisely to permit many different approaches to be more easily explored. I can’t predict which one will become the most popular, but I can at least predict that one or two of them will be.
> How would buyers/readers do the payment “all at the same time”?
Well, via some Internet based system, e.g. the Contingency Market. That would be the system that makes the simultaneous payment. Each payee has made the decision to pay asynchronously, and will similarly pay their dues asynchronously (with a lump sum).
> Or is this somewhat similar to
> ransomware?
The SPP is a rather simple subscription mechanism, and as described on the Wikipedia page you link to, has a long pedigree. Something a tad more sophisticated (and unprecedented as far as I’m aware) is the Digital Art Auction, which enables a single price per copy to be determined from a collection of valuations.
Comment #000302 at
2009-07-05 12:46
by
Crosbie Fitch
>
It should actually be rather simple, e.g. the author says “I’ll sell my book for $10,000”, and 9,000 readers say “We’ll buy your book for $1” and then the author says “Aw, alright then, done!”. Well, perhaps that’s an oversimplification.
<
Yes, oversimplification. Many assumptions here. The biggest being the arbitrary figure of $10,000 that you have plucked from somewhere. The writer has just spent 18 months writing the book. Living in a western country, the writer feels that a slightly better than average wage is acceptable. After all, the writer is the one that is providing the creativity to entertain others. So let’s say 18 months x $900 (gross per week, lets not forget taxes) So that’s $64,800 gross the writer needs just to get their wages for the 18 months. Lets say that it’s a good book (but not a “harry potter”) and people are prepared to pay $3 to download it (after all you can buy books for a dollar now under this new system so they wont pay too much). So now the writer has to get 21600 people to pay the $3 each. So now the writer has to get the word out. OK, it can be twittered, or blogged, etc, but ultimately the writer will probably have to resort to adsense (lets forget about the traditional mediums) to promote it. More cost that has to be recouped. So more books have to be sold, so more advertising is required to get the message out. So more expenses need to be recouped, etc, etc.
Or doesn’t the writer deserve a decent wage?
Comment #000308 at
2009-07-22 03:29
by
Skeptical
Everyone deserves a decent wage for decent work. Unfortunately, not everyone appreciates decent work, so not everyone will get what they deserve. If you spend years researching and writing a book on a subject that few are interested in you may well find fewer people willing to pay you a decent amount for your work, compared to many who might pay a good deal for hastily scribbled thoughts, by a celebrity say.
I’m developing a revenue mechanism that enables writers to exchange their writing with their readers’ money – without suspending those readers’ liberty to share or build upon that writer’s work, and without forcibly extracting money from the readers (taxation). I suggest it’s also better than removing value from one’s work to sell one’s audience’s eyeballs to advertisers.
Building up an appreciative audience (to maximise revenue) will depend upon the author’s ability to demonstrate that their writing constitutes decent work, the existence or development of a market demand for the writing, and maximising the ability for that market to discover the author and their writing. There are many others to help in those respects. I’m focussed on providing help at the point where reader and writer need to make an exchange (including the haggling).
To an unknown/undiscovered author, I would suggest that either they work on building up their audience/market with a series of smaller publications first, or if they can afford to invest 18 months of their time unfunded, to publish that book free, as a promotional work (exchanging sales revenue for marketing costs). You can’t get paid unless there’s a market for your work and that market has discovered you. Of course, with a reproduction monopoly, it is possible future sales could be predicted to warrant an advance from an investor (publisher). However, irrespective of the fact that a monopoly is unethical, I think you’ll find it’s no longer viable. We’re left with the choice of exchange in a free market or taxation.
If the author is known/discovered then being a decent writer they’ll have a decent audience and a decent wage in exchange for their writing. This will also help increase the size of their audience. Hopefully, by the time most authors decide to invest 18 months on a book they have already built up a large enough audience that they can be confident that around 20,000 readers will be prepared to exchange $3 each for it – or 2,000 readers $30, or 60,000 $1.
Comment #000309 at
2009-07-22 07:47
by
Crosbie Fitch
I suggest that the money for art comes from the customers who want the producer to produce it, i.e. the artist’s audience.
Just because publishers have traditionally intermediated, purchasing the art from the artist in order to subsequently sell copies of it to the artist’s audience (with a monopoly on manufacture of copies), this doesn’t mean that this is the best way today.
Given that the artist’s audience are now quite capable of manufacturing and distributing their own copies, it seems obvious neither they nor the artist need the publisher’s services any more.
There’s no way of avoiding it, but one has to conclude that publishers are now redundant. They have no new business model to rescue them – unless they really can live off of the ill gotten gains from suing artists’ audiences for producing unauthorised copies. That model won’t last too long, thankfully, especially when they lobby for the legislation to be made ever more draconian (hastening copyright’s demise).
What you’re left with is a far more efficient exchange between the artist and their audience, or the journalist/blogger and their readers.
Without the services of the publisher, the producer and their customers aren’t going to stare at each other across an imagined chasm, blankly wondering what the future holds; artist worrying that the audience will no longer want to pay, and audience worrying that the artist will no longer want to produce. Naturally, they will do a deal (without 99% or even a significant chunk of the money going to the intermediating publisher or collection society).
This is the new deal (the same as the one before copyright):
- Art for money, money for art.
The market for copies has ended.
Artist: Abandon selling your art to a publisher, or selling copies to your audience. From today, you shall sell your art to your audience.
Audience: Abandon purchasing copies from a publisher, or from an artist. From today, you shall pay your artist to produce art.
Notice how the audience has assumed the role of publisher? This shouldn’t be too surprising. The commissioners of published work have always been the public.
Check out Clay Shirky for a second opinion:
Newspapers and Thinking the Unthinkable
In NOT AN UPGRADE — AN UPHEAVAL Clay Shirky begins to warm to the idea of micropatronage – the radical idea that an author’s most interested readers might pay them to write and publish their writings.
If the journalist has already been paid for their writing, who needs to pay the manufacturer and distributor of copies of their writings? Does the public really need to continue paying the publisher a hundred times the revenue that they’d pay the journalist?
If the publisher truly does add 99% of the value of a published copy, then with a free market in copies, there’s no copyright monopoly to prevent the publisher producing a copy of the author’s work (at $0.0001), adding their value ($0.0099), and then selling it at $0.01 a copy.
I have a sneaking suspicion the publisher adds very little. We’ll find out what happens when the audience commissions the artist directly.
It’s about time.
Traditional (Copyright+Publisher)
1,000,000 readers pay a publisher $1 for a journal comprising articles from 100 journalists. Each journalist gets $100 for their article. The publisher takes $990,000 from which they cover their modest costs.
Micropatronage (Copyleft/Abolition+Disintermediation)
Each blogger has 1,000 keen readers paying them a penny for each blog item they publish. That nets them $100 every ten blog items (for argument’s sake qualitatively equivalent to a single journal article).
An online journal, being free to copy the work of 1,000 bloggers (copyleft) and republish them, erects a paywall charging punters $1 to download a PDF containing 1,000 of the best blog items. Now each blogger has already been paid $10 for each item by their keen readership. The $10,000 it would normally have cost the journal to pay their writers has already been paid. They now get their writing free. The journal can also make and distribute copies at a fraction of a penny. So the $1 is now closer to 99.99% added value.
If the publisher sells a million copies they take $999,900 with negligible costs. Laughing all the way to the bank eh? That is, of course, assuming the market for copies hasn’t ended…
If it has ended there will still be a market for selectors. I suggest the selector is going to enjoy micropatronage as much as each writer. Thus the online journal (sans paywall) will actually get a penny from each of their 10,000 keen readers for each issue ($100). That journal may even state that it gives a 50% commission to each blogger it publishes – after all, it needs to encourage the production of good writing in order to be able to select it.