The Need to Exchange · Thursday February 25, 2010 by Crosbie Fitch
Steve R. said 5176 days ago :
Could you clarify: “developers of donation facilities”?
The internet has theoretically put the middleman out of business. Artists can now market directly to the fans.
Of course there may still be room, in a limited context, for middlemen who can provide a degree of value added. Artists, I doubt, would want a manufacturing facility. The middlemen might have a manufacturing facility that can generate the customized merchandise what the fans want from a variety of artists.
Crosbie Fitch said 5175 days ago :
Donation facilities are things that make it easier for people to donate money to artists or other organisations that those people feel deserve their support, a monetary token of their appreciation, a reward for the good work they’ve done and are likely to keep doing.
‘Developers of donation facilities’ are people or organisations who develop such easy-to-use online payment mechanisms, e.g. those who developed FairTunes, TipJoy, Kachingle, and Flattr.
The Internet is an extremely efficient communications and publication facility, greatly assisted by such things as Google’s search facility. One no longer needs the use of a ‘manufacturing facility’, printing press or CD duplication plant to publish, reproduce and distribute one’s intellectual works.
Perversely, it remains very difficult to pay the producers of such works to produce further work. It is difficult even to donate money to such producers by way of reward. This is why we keep seeing people develop donation facilities. However, exchange facilities are even thinner on the ground, with very few people developing them or even recognising a need for them.
One can easily dispense with a middleman or publishing agent who’ll take a 99% cut, if all you want to do is publish-for-free. However, if you want to get paid for your work, the 1% revenue share begins to look attractive. But then the 99% share looks very attractive to those traditional publishers who also now no longer need expensive plant to manufacture and distribute copies to retailers. There’s a bit of a gap in the market for a means of getting 100% of customer revenue to producers. However, that’s customer revenue, not donor revenue. A customer is someone who agrees with a vendor to exchange an agreed amount of money for an agreed amount of work. A donor is simply someone who throws an arbitrary number of coins into a street performer’s violin case.
There are indeed people who want a facility to throw coins into a violin case (and have 100% of them actually arrive in it). However, there are also people who want to commission a professional violinist to record a studio performance of a classical work and have 100% of that commission (instead of 1%) reach the violinist (the violinist is quite keen about this too).
On one side we have artists apparently giving their work away, and on the other we have their fans apparently wanting to give their money away, to donate it to them.
The mistake on the part of FairTunes, TipJoy, Kachingle, Flattr, etc. is to perceive the fans’ wish to give as a demand for a donation facility – to match the Internet’s facility in helping artists give away their work. It’s a mistake in the same way that someone might think people jumping from a ship need a diving board instead of a liferaft.
There is a more fundamental need that developers of donation facilities are failing to recognise. This is the need for an exchange.
As has been demonstrated in mankind’s long history there is a far more efficient and productive means by which people exchange their work for the money of those who want it.
It’s known as a market. A place where people with work offer it in exchange for money, and people with money offer it in exchange for work. Neither adopts the approach of ‘give it away and pray’.
We are finally recognising that the market for copies has ended, that the monopoly of copyright can no longer protect the sale of that which everyone can illicitly produce themselves for nothing. The role of the intermediating publisher to convert their purchase of art from the artist into the sale of mass produced copies to a mass market is coming to an end. Artists must now look to the arrival (or return) of a disintermediated marketplace, one where the artist and their fans directly exchange art for money, money for art.
I’m working on such a market. I call it the Contingency Market. It enables deals such as “If you publish a new article, I’ll pay you $x”/“If you all pay me $X, I’ll publish a new article”.