Copyright updates

Paul Heald's excellent graph has brought commentary from all over the web; it's been fun watching where it's popped up since he gave the talk here at Canterbury. If I had to guess, a talk for 15 economists at Canterbury hit an audience, for that graph, in the hundreds of thousands.*

TechDirt usefully notes that things are even worse than pictured. While copyright protection extends back to the 1920s, that's only for works where the rights-holder has renewed his copyright. Rights to most works aren't renewed. But it isn't always easy to figure out whether or not the rights-holder has renewed the rights, and getting it wrong can be costly. Masnick writes:

This is something most copyright supporters ignore: entering the public domain can actually renew the value of art, and can (and does) stimulate the economy by allowing others to exploit additional commercial value from a work beyond what was possible under copyright. The commercial usefulness of a monopoly on a book has a shorter shelf-life than the monopoly actually granted by copyright law. Based on Patry's findings, that shelf life is somewhere under 28 years, otherwise more people would have renewed their registration—but copyright lasts much longer than 28 years. Thus you get the giant gulf on Heald's chart: in between the pre-1923 public domain books and the books that are new enough to still be actively sold, there are several decades of titles that are no longer worth anything to their rightsholders, but can't be offered by anyone else because they are still effectively under copyright.

Yes, just effectively—not actually. As you may have noticed, there seems to be a contradiction here: if the majority of copyright registrations went un-renewed, then the majority of books published between 1923 and 1963 have lapsed into the public domain alongside the books from 1922 and earlier, so the drop-off in Heald's chart should be much, much smaller. This is not a conflict in the data, it's a symptom another massive and entirely separate problem with copyright law which I discussed in a recent post: the difficulty of determining a work's status.

Copyright is a good thing. But not at its current duration or its current scope.

*An incomplete summary: Marginal Revolution, Matthew Yglesias, Kevin Drum, Rebecca Rosen [made the most popular on The Atlantic's front page on the Saturday after posting], Brian Doherty, Kevin Kelly, and FAIR. It's hit Memeorandum, Reddit, Hacker News, The Glittering Eye, the CEI's Open Economy Blog, Politikon, and LISNews. Topsy tracks the tweets; here are the +Ripples. And TechDirt and Information Liberation and Right to Read and Habr. At 15000 post views and counting, if the click-through rate to Offsetting from the other sources is maybe 5%, then multiply my views by 20 to get a ballpark audience of 300k.

Crowdfunding the kitchen

Back in May, I pointed to Conflict Kitchen in Pittsburgh. As much performance art project as restaurant, they brought Iranian food to Yinzers.

Their next iteration will serve Afghan food (oh how I miss Panshir). They're raising funds for it using Kickstarter - a conditional donation system where donors aren't on the hook unless the project gets enough support. From The Economist:

As crowdfunding has matured from a series of one-off efforts into something reproducible, the money has followed. Millions of dollars, in increments as small as $5, have poured into efforts that connect artists, musicians, writers and others with people willing to fund their projects. Venture capitalists have also shown an interest by investing in start-ups that facilitate crowdfunding.

There have of course been “tip jars” on web pages for years, and even big sites like Wikipedia ask for donations. But this approach works for a vanishingly small number of sites, and then only in conjunction with other sources of revenue. Crowdfunding is different, say its advocates. “It’s not a tip jar, and that’s what makes it sustainable,” says Perry Chen, the boss of Kickstarter, the largest of several start-ups that act as matchmakers between donors and projects.

...

Crowdfunding has benefited from the rise of social networking, which allows even non-celebrities to accumulate large numbers of fans or followers online, to whom they can reach out when a project needs funding. Successful projects, says Mr Chen, usually require an “anchor audience” of friends or fans who engage in “micropatronage”, enjoying the association with a successful project and a personal link with an artist or writer.

...

Crowdfunding may turn out to be a fad, says Cory Doctorow, a bestselling novelist and blogger who is experimenting with various forms of micropatronage, including selling a bespoke short story for $10,000 to one of his fans. “There will be some people for whom the fact that they raise money for themselves will be a marketing story,” he says. But crowdfunding’s early success at raising sums large enough to be useful, though not large enough to replace other sources of funding for creative works, fits in with a broader trend of using technology to bring artists and their audiences closer together. As Mr Chen notes, artists can now ask their audiences directly for support, and will often get it. “People are thrilled to be involved in the creative process and see something come to life,” he says.

Conflict Kitchen is looking for $4,000. The micropayments scheme follows Masnick's "Connect with fans - Reason to Buy" formula: even small donors can feel useful if their donations were critical in getting to the $4000 threshold that would draw in the other donors' pledges; larger donors get affiliative goods ranging from food vouchers to a dinner, via Skype, with a dining partner in Tehran:

Your very own Skype meal with a dining partner in Iran. We will provide everything you need for a meal for yourself and a Kubideh Kitchen collaborator in Iran. You will receive a special kit including spice mix, recipes, directions for a three course feast, and contact information with your dinner partner in Tehran, who will prepare the same meal as you in their home and with whom you will share the meal (via Skype); AND 10 Kubideh Kitchen food wrappers for your guests.

Hard to bomb folks with whom you've dined.

CWF-RTB, NSFW update

Masnick at TechDirt picks up on the prior economics discussion of the end of effective copyright and the porn industry.

[Crampton] then suggests that touring is a possibility -- with online clips being used as enticement to come out and see "live" performances of some kind, though, I would imagine that might not fully work either. I would guess that for most -- "stripping" and "porn" aren't quite the same thing, and while I'm not familiar with how licenses for strip clubs work, I'd have to imagine that most don't allow actual sexual acts between people to happen either. Though, the Freakonomics article does say that some porn actresses use online clips to drive people to come see them strip -- which is a higher margin business.

Of course, a commenter suggests an even more obvious (though very illegal, mostly) form of CwF+RtB: prostitution. Though, that's got all sorts of problems as well.

What surprises me is that one of the more obvious models is mostly left out: straight up advertising. One thing that porn does well is attract a lot of eyeballs. In fact, plenty of online porn sites have supported themselves with advertising for ages. There's no reason for that to change. And, certainly you could think of interesting "tiers" that some top porn stars could use to attract people to pay for greater levels of access, such as private videos, chats and the like. A few months ago, someone had submitted a story about a porn star who was offering special packages on her website where she would attend sporting events with you (I believe for the Phoenix Suns), but I can't find that submission any more.

Either way, I have to concur with the initial analysis [Freakonomics]. Whatever the business model that comes out, it doesn't seem likely that porn is going away any time soon, even if copyright is totally ignored.

Advertising pays the clips sites, but it doesn't pay the content producers. Absent effective copyright, something else has to pay the producers. I still expect that we wind up with a segmented market where the clips sites mostly host amateur or very cheaply produced content, but where a few star performers are able to capitalize on acquired fame by selling props from the set, touring, or providing higher end experiential goods - the DVD costs $20, but the DVD plus dinner with the star costs $20,000.

Folks over in the comments section there had some interesting ideas for business strategy as well. They point out that there is already a pretty lucrative touring market for big name stars in adult entertainment venues. One commenter notes that "game used" memorabilia in sports has a big market; he's surprised it's not taken off in this context. I wonder whether there are regulatory barriers connected to health and safety issues, though presumably disinfectant would solve such problems. Another notes that one star has taken to occasionally advertising that she has two tickets to a Phoenix hockey game; folks could then presumably bid to go see the game with her. A third suggests "pay more to produce more":

For example, a famous porn actress could star in a free but short porn clip, with a possibility of 3 different ways it could be extended. Folks would pay .50 or so to vote for their favorite choice, and then a short time later the next segment would be free released as well, with yet another vote for the next segment.

Serialization of the show, with the next installment produced when enough micropayments have been received, and a chance to vote on ...plot developments... as incentive to pay - neat idea.

I'd appreciate it if any readers who pay more attention than I do to innovations in this industry (you know who you are) would report in if any of these start taking off.

Palmer on CWF-RTB

I like TechDirt's Mike Masnick's take on how artists can make money in effectively a post-copyright regime.

Amanda Palmer also gets it.

One Friday night earlier this year, Palmer says she was bored, and so she accidentally started a tee-shirt project with her fans on Twitter. Just two hours of work earned her a whopping 11,000 dollars. It’s just one of the many ways Palmer has made a living by tapping into her fans’ goodwill. The key, Palmer says, is trying out lots of different ways of making money.

AMANDA PALMER: Everyone has to stop thinking there is an answer. The answer is, there’s an infinite number of answers.

RICK KARR: You've done some fairly unusual things to raise some money from your fans.

AMANDA PALMER: I've done free webcasts in which I've auctioned off props from the videos that I've shot and handwritten song lyrics and weird stuff from my apartment. People have bid hundreds and hundreds of dollars on this stuff. But a lot of it is not even really so much about the stuff itself as it is about their willingness to, to connect with me and support me.

And I've also done a lot of sort of flash mob shows using Twitter and my blog to get a bunch of people in a public space, and literally put a hat out and said, I gave you this show for free, I'm really glad you came. If you can afford to give me some money, do it. If you’re too poor, don't.

If you go to Palmer's website, you'll see her store offering all kinds of interesting bundles of products with lots of exclusive, non-replicable content: ordering the CD pre-release can get you a "pre-release only" t-shirt; you can pay more for bundles including a custom ukulele. Higher end bundles include dinner with Palmer, 11-week around-the-world trips with Palmer, and even a moon launch for the low low price of $11 billion.

Artists ought to be building their business models on an assumption of copyright not really being there. It's the non-digital, hard to reproduce complements to the music that'll be earning the money going forward: experiences with the artist, artifacts associated with the artist. The music builds the market for the artifacts and the experiences. And, of course, CWF makes folks at least feel a bit guilty about ripping off music.

Susan and I are of course greatly looking forward to tonight's Amanda Palmer show at Al's Bar in Christchurch! We hope that Ira's young sister, due to arrive end-April, also enjoys. Hope to see some of you there!

Update: Lots of other folks have covered this in more depth: here here here...

Masnick on Music

Mike Masnick, who earlier put together the rather nice explanation of Trent Reznor's business strategy, continues to be one of the most sensible analysts of the current state of the music industry. Today he writes:

...selling music is just not a good business model, but it doesn't mean there aren't good, music business models. It's just that selling music isn't a very good one. Instead, you need to learn to use the music (which still needs to be good, and is still the central reason why these other business models work) to sell something else -- something scarce, which can't easily be copied. That can be attention, access, time, creative ability, cool physical products, whatever. All of those things are made more valuable the more popular the music is, and you can build all sorts of powerful and immensely profitable businesses once you recognize that.

But if you still think that selling the music or making money directly from the music has to be at the "center" of any music business model, you're shutting yourself off to the largest opportunities out there. But, the thing is, music has always been a product that makes something else more valuable. While there was some disagreement on the panel from someone about how record stores were profitable in the 70s, that's a case where the music was making the vinyl (and later, plastic) more valuable. Today, it makes iPods more valuable. As the big box retailers know, it acts as a loss leader to bring people in to buy higher margin goods. Music is great at selling other, higher margin things. If you ignore that in the music business model, you're missing the big opportunity.

This isn't to downplay the importance of music, or say that the quality of music doesn't matter. It absolutely does. But the music is not the scarcity, and you don't make money off of selling something that's abundant. You use the abundance to figure out what other scarce goods it makes more valuable and you sell those.