Here we'll explore the nexus of legal rulings, Capitol Hill
policy-making, technical standards development, and technological
innovation that creates -- and will recreate -- the networked world as we
know it. Among the topics we'll touch on: intellectual property
conflicts, technical architecture and innovation, the evolution of
copyright, private vs. public interests in Net policy-making, lobbying
and the law, and more.
Disclaimer: the opinions expressed in this weblog are those of the authors and not of their respective institutions.
I'm pretty sure I'm indebted to Warren Ellis for this pointer: The Private Eye comic. It's a story-based comic by Marcos Martin (Daredevil, Spiderman, art) and Brian K. Vaughan (Saga, Ex Machina, writing) that is being put out in DRM-free, pay-what-you-think-it's-worth style. You can preview on the site, or direct download the unencumbered files. The creators are quite honest with a simple pitch: you pay us to make this comic and we'll make more. There's no charity or fancy rewards. This makes it much more like NoiseTrade, except for visual artistry. It's refreshing to see more people trying out these new models and I wish Martin and Vaughan well. If their creative style appeals to you (and I think many Warren Ellis fans will see the connections) then click the big blue "Buy Now" link at the bottom.
The only thing I'd like is a little more clarity in pricing. It would be nice to see a suggested price, or average price paid information (a la Humble Bundle). This series could go up to 10 issues, at 32 pages per which is a pretty hefty output but it's not clear whether you're paying now for the premier issue or subscribing for the whole series. Obviously people are free to choose the option that they like, but guidelines and suggestions would help me, I think.
David Post, writing at Volokh Conspiracy on the Kirtsaeng decision, is worth quoting entirely: The Court – in a utterly brilliant opinion by Justice Breyer, a minor classic of the “here are all the reasons why my arguments are better than yours” school of opinion-writing — rejected Wiley’s argument and refused to impose the geographical restriction Wiley sought.
Thayer wasn't happy about being asked to work for free, and posted the editor's request along with some heated response, highlighting his career as a professional journalist not to mention his need to pay bills, feed his children and so on. In general, Thayer noted, "[I] am not in the habit of giving my services for free..."
Thayer's public scolding brought a number of responses, two of which I want to visit, and to draw parallels with other things here and elsewhere. First up, Cord Jefferson wrote a piece for Gawker, which brings up an important point: who's really paying?
When people work for free, particularly in businesses like writing, they are often able to do so because they have other resources they can draw on. A "day job" or friends and family can provide the financial resources necessary for someone who isn't able to get paid at writing to pursue that vocation. Crucially, external financial resources may enable someone to tolerate the zero- or low-wage situations that interns and freelancers find themselves in and that then lead them to the higher-paying or even salaried opportunities. Jefferson points out (I think correctly) that this unacknowledged dependence on outside resources leads to a self-selection process whereby people who have access to those resources (coarsely, to a rich family) get those opportunities whereas those who come from lower economic status are denied them. People in lower economic status are much more often non-white or single working parents - which is to say, women. Since they do not have the resource cushion to survive on the "work for prestige" rungs of the ladder they are thereby denied the opportunity that more well-off (and more often white male) people have. Thus the "work for free" regime acts to perpetuate racial and gender inequalities.
So far so good. Unfortunately the last two paragraphs of Jefferson's essay go off the rails as he chooses to misinterpret and attack Amanda Palmer and her TED talk. First of all, calling Palmer "wealthy" is almost certainly factually incorrect. But more importantly, Jefferson claims that Palmer's talk is promoting the ideas "...that artists should be willing to work for free." Say what? Certainly that's not how I or most other respondents I've read heard that talk, which seemed to me to be encouraging people to ask for things, including money.
Leaving aside the last two paragraphs, I also want to highlight the response from Ta-Nehisi Coates who happens to be Black and has the singular point of view of writing regularly for The Atlantic. Coates' reply column was titled 'Lucrative Work-for-Free Opportunity' and told his own story of receiving a similar offer to the one that offended Thayer. Coates was solicited by Matt Yglesias to write for The Atlantic in exchange for the greater exposure rather than for a by-the-word payment rate. Like Thayer, Coates was an established writer at the time and also like Thayer he was a struggling professional with bills to pay.
Coates took the offer, negotiating his ability to commit to what Yglesias wanted with his own need to publish his own things. He highlights the fact that this is common practice in the industry, but also calls Thayer's tactics (such as publishing private emails with names attached) into question. Yes, Coates says, it would be nice if the industry could provide more living-wage positions to alleviate the kinds of disadvantaged situations that Jefferson talks about. But it's also true that right now The Atlantic is employing more journalists than ever before.
Which leads to the point of this long-winded think piece: it's a continuation of our discussion of what it means to be an author in the 21st-century media environment. We've been conditioned to think of a "successful" artist as one who sells a million records or has a million followers/fans/readers/whatever. But if you price your offerings right (as Felix Salmon argues and I agree) then you don't need the superstar/megahit/blockbuster model to be successful. Palmer's Kickstarter gets mentioned for its dollar amount a lot - Jefferson highlights its dollar totals - but few people seem to notice that there weren't that many people backing it. A few tens of thousands. That's a highly replicable model - at least much more replicable than the blockbuster/megahit model.
The challenge is that making this model replicable requires new ways of business. As Palmer and others have said, this model works best if you are an extrovert. If you are comfortable asking for money, asking for crash space on tour, asking for a loaner piano to practice on, asking for a stage prop to be delivered, then you can move faster and get more done - at the 'cost' of intensive fan service. Not every author or artist is comfortable doing that, but that's OK. It's not a flaw in the model, it's a business opportunity.
Filling this need means we'll see the emergence of a new class of intermediaries. Just as many successful authors today have "web goblins" (as I think Neil Gaiman calls his Webmistress) or other staff who maintain their online presences, other artists are going to need social media intermediaries to handle that fan service. This is no different from the need authors have for traditional literary agents or performers have for tour managers. Performing is a business; people in business hire out the parts they can't handle themselves. Some of those hired people are called things like 'accountant' and some are going to be called 'twitter wrangler'. Shy performers (writers, artists) will have more need of these people than extroverts but that's not a fatal blow. Sometimes shy performers will have to get by doing things they're not good at because they can't afford to hire people, just like musicians starting out today often have to book their own shows.
Or maybe these artists will learn to ask, and somewhere within their few thousand fans will be someone who knows a club owner and can book a gig. That fan may even do it for free because, after all, there is something to be said for prestige.
(I am indebted for many of the ideas in this post to a fine group of savvy friends, many of them writers in their own regard. In no particular order thanks to JC Chatelain, Fred Barrett, David Weinberger, John Sundman, and Joe Mahoney. You should buy their books.)
Thanks to my friends at Owner's Rights Initiative I just got word that the Supreme Court decision in Kirtsaeng v Wiley has been issued, and the decision has gone 6-3 to Kirtsaeng, reversing the Second Circuit.
Publisher's Weekly confirms - as of this writing there hasn't been a statement yet from Wiley, nor have I had time to read the decision and dissents or concurrences. I'm sure there'll be more to say later. But for now all libraries, individual sellers, used bookstores, and the rest of us can breathe a sigh of relief.
ETA: decision is here. I'm still reading it, but the first thing that strikes me is it's a fairly odd alliance of Justices. How often will we see Kagan and Alito filing a (concurring in this case) opinion together?
Natco's manufacturing is protected under an Indian national compulsory licensing scheme that follows the guidelines set out under TRIPS, a WTO-governed international trade agreement. Bayer has said that it will continue to fight against Natco and other country-local producers who are targeting lower-income buyers and in the process disrupting big-pharma international monopolies.
As I've made clear in the past, my sympathies in these cases are divided. Development and testing of drugs is a socially valuable but intensely expensive undertaking. Until and unless governments are willing to shoulder the entire burden of this process we must rely on commercial companies to do it. These companies need to be compensated for their costs of research and development and they need to make profits to stay in business. It's not enough just to make money on some drugs - if companies only have incentives to produce certain kinds of drugs then treatments for important conditions will lag. The sad state of anti-malaria treatments versus, say, expensive first-world mental health medications demonstrates this clearly.
However, the reason these medicines are so socially valuable is that they are often life-saving. They may be the only thing standing between millions of people and significant suffering or even death. Companies that are granted special rights such as manufacturing monopolies (patents) need to be willing to give up something in exchange - likely that means giving up some of their possible profits in order to ensure that life-saving medicines are more affordable.
More elaborately the answer is "No. You don't get compensated for sales of used physical books; why do you think e-books ought to be different?" Well, for one thing a used electronic item doesn't degrade in the way that a physical item does. There's something nice about buying a pristine copy of a book and every used-book marketplace I know of requires sellers to state the condition of the book because a sufficiently degraded physical book can be unpleasant or impossible to use.
In theory, if there are pristine copies of e-books out there it will destroy the marketplace for new copies. Except there are already vast stocks of pristine physical books around. Ever heard of overstock? Or check those condition listing for physical books. I bet you can find descriptors like "unopened" or "still in shrink-wrap" or "pristine" or "like new". It's true that not every copy is like that, but it's simply false to assume that every used book is lower quality.
Scalzi and Waldman wail on at length about how authors need to get paid, a philosophical foundation I share. But the used book was sold, and the author did earn her or his money on that sale. That, as I said last time, is the entire point of first-sale doctrine. If authors or publishers feel that used sales are taking some amount away from first sales then the proper response is to increase the price on first sales to compensate. Teeth-gnashing and trying to shut down entire commercial marketplaces is a sorely misplaced sentiment.
And speaking of misplaced, I think Scalzi and Waldman would do well to watch Amanda Palmer's discussion of the art of asking. Rather than spending their time and energy trying to figure out how to force people to pay, authors need to learn how to connect with people and in so doing encourage them to help the authors.
(Sorry for the week-long hiatus. An unexpected change in job situation sort of threw me off track.)
Salmon comes in for a mention in the talk, but his reason for posting it is because he wants to talk about the same things that Palmer talked about: how do you convince (not force!) people to pay for what you can offer? This is the flip side of his first column about how to package your product so that it diffuses out to the appropriate audiences. The payment side requires that people - as Palmer describes - overcome a certain shame in asking, and develop a level of trust in themselves, in their audiences (fans, readers) and in the relationships that can be built. Salmon points out that the publishing business has been frankly awful at this, though he shares Palmer's sense that Twitter may create a fundamental change there.
Salmon talks at length about the various models most in use today and argues that there are no sharp necessary distinctions between such things as paywalls and tip jars. In particular, as an economist or a businessperson you might want to try to compute the relative merits or likely payoffs of different models but that's likely an impossible task. What you need to do (like every business) is try to match up your supply and demand curves and make them meet at a point you can live with.
How long you live with it, though, is another problem entirely. Salmon points out that high (or pricey) paywalls may generate more short-term revenue and look better to the current bottom line, which is great if you're trying to pump up your stock price or make yourself look like an attractive buyout target. But they may be killing you long-term as your current readers die off or move on and your paywall not only shields you from those who want to rip off your content, it also makes you invisible to new people who are searching.
This matters because you're probably not talking about reaching audiences of millions or even hundreds of thousands. Palmer's fan base is probably in the tens of thousands and that's probably about the right size, for her. Salmon notes that the Internet "...enabled smallish numbers of people to pay modest amounts of money..." and that can add up to a sustainable model. This is, I think, the answer to the question I started gnawing on in January: how many people can be counted on to sustain a writer?
The answer is "probably not a lot, but that's OK" because if a few tens of thousands of people can be enough then there's a lot more subscriber base to go around. I'm trying my own little personal experiment in this area, seeing how many Kickstarters I feel comfortable backing. Right now I think my appetite is something like 1 or 2 a month at probably $20 or $25 each. We'll see how it goes.
Well it turns out that both Congress and the EFF have decided to take up the issue. CNET's Declan McCullagh provides a brief history and overview. (I have to wonder if he'll be allowed to continue reporting on this once CBS figures out that DMCA exemptions and changes to the law are not in their corporate interest. But I digress...)
Congress, in the personage of Senator Ron Wyden (D - Oregon), introduced a bill intended to fix some of the DMCA's problems. At the same time the EFF, startup incubator Y Combinator, the Mozilla foundation, and Reddit got together to launch FixTheDMCA.org, which is specifically focusing on repealing section 1201 of the bill - that being the anti-circumvention provisions.
As McCullagh points out, past attempts to modify 1201 have raised the full ire of the Cartel, which may be why Wyden's proposal is much more modest. Modest or not, I suspect we're going to see a lot of FUD raised around Wyden's bill.
It seems that most of the parties in this case also don't like that answer, and for good and sensible reasons. I was particularly taken by Bowman's lawyer's argument that a finding for Monsanto would elevate patent rights over personal property rights. This is a powerful point and highlights some of the great contradictions we've built up in our current maximalist system. I wonder how my libertarian friends see this, as many of them are highly respectful of property rights, but also feel that government should not interfere in business market practices. Does the trump card of personal property rights in this case mean that Monsanto's business model must fall?
And if it does fall, what does that mean for the patent system in general? I can see no rational basis to distinguish a biological machine from a physical one and grant patent protection only to produces of the latter, just because of the composition of the machine. Our notion of what makes a "natural" object in the world versus an engineered object may also have to change as we learn more about "horizontal" DNA transfer (see here in Biology Online and here in a story about how blood-sucking insects may be part of a process of horizontal transfer in humans). So it's not a good solution to say "well, just don't allow patenting of biological machines".
It also seems clear from the summary that SCOTUS understands that the patent system's "exhaustion doctrine" isn't sufficient here, either. I suspect we're going to see this question come up again, soon, as we're not far from a world in which 3D printers can print out all their own parts, after which assembling the parts into another 3D printer that can self-replicate won't be far behind.
Unfortunately, the administration can't single-handedly order this done. As the response points out the decision still lies with the Librarian of Congress, though other agencies such as the FCC are sure to get involved. FCC Chairman Julius Genachowski has also chimed in his agreement with the administration on this issue.
So, what does the Librarian have to say? Um, nothing. To be fair, the brief response acknowledges that the White House has weighed in. Not that they're going to do anything about it, but at least they acknowledged.
It will be interesting to see who moves next in this little Mexican stand-off. As of now the rule is still in place - if you bought a new phone after January of this year you can't legally jailbreak it.
Pretty much ever since she put her Kickstarter in motion a bit under a year ago one lingering question has been whether this sort of thing is unique to Palmer, or whether there's something reproducible in this experience. Although it's not framed as such, what I hear Palmer saying in her talk is "Here is how I did this and here's what you can try, too."
It's not about the details (which is good and right for a TED talk) - it's about the philosophy. Although the talk is titled "The art of asking" and Palmer talks extensively about her experiences asking, the secret sauce for me is in her discussion of trust. You could equally well title the talk "The art of trusting" as she talks about the degrees and kinds of trust she has in her fans and how that affects what she does with her music.
In particular, she says she never tried to "make" people pay for the music; she asked people to pay and as she says,
When you connect with them, people want to help you
Connecting isn't easy, particularly if one is not a naturally outgoing or gregarious person. Neither is trusting. But both are skills that can be practiced and if anyone is going to replicate the AFP model, they're going to do it using huge elements of connection and trust.
I'm trying to remember how long ago it was that Cory Doctorow wrote, "Giving my stuff away is selling the hell out of it" or words to that effect. (Actually, I don't have to remember because the Internet remembers it for me.) The notion that giving people something for free would entice them to pay more is as old as coinage, I believe.
For a long time the notion of giving your stuff away was buried from mainstream sight. Buried first under the glare of celebrity/blockbuster/mega-hit productions in which corporations made stars of people and shows and books and things for which people paid ever-increasing prices. Then it got re-buried under an avalanche of FUD about piracy and sharing.
But of late the notion of free is making an important comeback. In gaming, there's an entire genre of "free to play games" in which you get the game for free and pay for things you want related to the game: cosmetic items, power-ups, unlocks of special features, more capabilities, etc. Authors and musicians and other creators have recognized the power of giving their things away to connect with audiences, build loyal fan bases, and maybe put up a tip jar so people can pay if they think it's worthwhile.
This week, under the title "How to get people excited about education", Felix Salmon posted about what I would call the economics of some of these freedom-driven models. In particular, he talks about the spectrum of education experience that ranges from massive open online courses (MOOCs) to individualized, in-class direct education. His argument is these are complementary, not competitive products. Giving away your lectures via YouTube isn't going to cut into your enrollment, he argues. It's going to build your brand and name and value and while it filters out those who don't have the drive or money or time to sit through intense graduate-level education courses, it's also going to select for the people who do have those things, and bring them to you.
He points out that the same model of increasing yields as you increase costs can be made to work in other areas - his second example is about the Metropolitan Opera and he concludes that,
...the more you give such things away, the more demand there is for the very expensive live product
Yes, exactly. Salmon calls these different offerings "diffusion lines" as in different ways you get ideas and content out to people. And he argues that this kind of thinking can be the basis for what I would see as a broadly economically sustainable set of marketing and business models.