Thursday, October 14, 2010

Bounty Markets for Open-Access eBooks

Mozart: The Piano Concertos
In January 1773, Wolfgang Amadeus Mozart placed advertisements asking patrons to "subscribe" to the three piano concertos he was writing. If he received enough support, the concertos would be finished by April, and subscribers would receive beautifully copied manuscripts. More importantly, they would have the pleasure of supporting the creation of a great work, which would be performed around the world. The  resulting concertos, K413-415 are today considered important works, but it took quite a long time for Mozart to gather enough subscribers.

This old model for publishing was modernized with the addition of cryptographic assurance layers by cryptographers John Kelsey and Bruce Schneier, who started their examination of intellectual property business models with a deep pessimism about the long-term technical viability of digital rights management systems. Kelsey and Schneier dubbed their system "the street performer protocol" in tribute to a friend who friend who had travelled Europe earning money with bagpipe performances. Presumably, the friend found that he could earn more money by passing the hat before or during a performance rather than after.

Street Performer Protocol is a fund raising method designed to support the free release of a creative work. The creator agrees to release the work only after a threshold amount of money is pledged by supporters. For this reason, the method has been termed a "threshold pledge system". Kelsey and Schneier describe how a third party, who they term the "publisher" can provide supporters with a layer of assurance that the creator will live up to his end of the bargain if the threshold is reached; otherwise, pledges are refunded to the supporters.

Another term that has been used for systems of this sort is "ransom publishing", which is particularly apt when an author gives away the first few chapters of a novel, but holds the rest of the chapters hostage until a suitable ransom is paid by readers who want to read the cliffhanger ending.

Somehow I doubt that a cryptographic assurance layer would have helped much with Mozart's concertos. Nor do I think that Mozart would have had much success giving out the first movement before asking for contributions.

What might have helped Mozart a lot, however, would be a market.

Markets function by bringing together many buyers, many products, and many sellers. If Mozart had been able to offer subscriptions to every music lover in the world, and those music lovers had easy access to all the composers in the world, Mozart would have been a very wealthy man.

Web sites that attempt to create markets for creative work around threshold pledge systems are definitely a trend. Kickstarter is perhaps the best example- They provide opportunities for creative people to solicit support for worthy projects. In many cases, the creators provide benefits for people who have supported their work. Another example is FashionStake, a website which lets ordinary people support fashion designers by pre-ordering designs before they hit stores. Supporters of successful projects thus get special access and special prices for the latest designs from the world’s top designers.

Kickstarter and FashionStake share several characteristics. The number of projects available for support is not huge; there are selection filters that have a side effect of preventing significant competition between projects. Also, there is an assumption that projects will not be executed if the threshold funding is not reached. The incentive to keep the threshold price low is that projects priced too high will not achieve their support threshold, and thus won't receive any funding at all.

I've been thinking about how to apply threshold pledge systems to the sponsorship of open access for ebooks. I believe that with some modest but essential innovations, a sort of threshold pledge market could become a powerful economic force in many segments of the ebook business.

The first innovation would be to create a market that covered ALL books. According to the Google Books team, there are over 100 million books that can be identified in the world; a relatively small fraction of them are out of copyright, and an even smaller fraction of them are available as open-access ebooks. Why not let people sponsor any and every book they cared about?

Note that these books have already been written and published, so the sponsors are not being patrons of artistic creation, as in Kickstarter, FashionStake, and Mozart's concerto subscribers, instead, they are posting a reward for conversion to open access. It's wrong to think of this as "ransom publishing"- a parent doesn't kidnap their own child! A better way to think of it is posting a "bounty" for the delivery of the ebook into a Creative Commons compatible license.

A second innovation follows from the first. If you allow the posting of a bounty on any book, then a lot of books will get only minimal sponsorship. Many of these books may be "orphans", without known rightsholders for the public to purchase ebook rights from. The only way to keep sponsorship dollars from sitting unused is to allow them to be posted to many books at once. The first book to claim a bounty would take home the money.

Multiple commitment of sponsorship dollars has two interesting effects. First, it magnifies the impact of sponsorship dollars. An commitment ratio of 100 to one allows 10 million dollars of support to look like a billion dollars offered to rightsholders. Smart rightsholders who participate at the right time could walk away with sizeable rewards. Second, multiple commitment puts rightsholders in competition with each other for sponsorship dollars. If two books share many sponsors the bounty for one book would go down significantly when the owners of the other book decide to accept their posted bounty. Rightsholders are thus discouraged from waiting too long for sponsorship dollars to build.

None of this will work if sponsors don't get something for their money. It seems to me that the released ebooks should include some sort of recognition text, but maybe just loading the sponsor's devices automagically with released ebooks would be enough. Given some format validation, the released ebooks would slide easily into Google Books, OpenLibrary, Feedbooks, other places- LibraryThing, GoodReads, WeRead, GetGlue and devices/apps- Kindle, Kobo, Nook, iBooks, Ibis Reader. Perhaps most importantly, the released ebooks could be curated and preserved by libraries around the world, something that can't happen properly with today's copyright system. That alone would be enough to get me to participate.

Mozart would approve, I think.

Next week: who would create a market to help people post bounties for the release of ebooks?
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  1. Why not an autographed physical book or special discounts to merchandise around the book?

    I know of some authors who do that.

  2. akuma- That might be a great strategy for monetizing returns. You could lay out tiers of support. It could also spawn a collectors market, since supply is guaranteed to be limited.

  3. This doesn't address your post-creation rights market idea, and It's not quite the same as threshold pledging, but I suspect Mozart would have seriously considered something like ArtistShare ( which seems to be the closest modern analog to the subscription creation model you mention up top.
    ArtistShare has been quietly plugging away at the tiered project-based funding model for years now (full disclosure: my brother managed their web operations years ago). It seems to do a decent job of mixing digital media with the kind of physical collectors market you mention. However, it also depends on a relatively small group of jazz aficionados that are used to going to some lengths to enjoy their non-mainstream hobby, and are as much into experience as they are into content consumption. I'm not sure how well the model scales beyond the enthusiast-driven markets for jazz and classical music, and I certainly don't know how you'd build in the rights-transfer aspect. But it is an example to consider in terms of trying to get readers to care about something beyond the immediate gratification of zipping through that next book in the series.

  4. I saw this in 2000 around the same time as Kelsey & Schneier - independently.

    I'm working on a generic back-end The Contingency Market to support all manner of sites based on a similar principle: bargains between large numbers of people and those responsible for the performance of public events or delivery of public goods, e.g. publishing an intellectual work. I hope to demonstrate the idea with something rather simple: - those readers of a blog who want to encourage the blogger sponsor further articles at a penny each.

    You're one of the few (if not the only one I've come across) to recognise that one only needs a single penny on the table to back thousands of penny pledges, and thus amplify the liquidity of all commissions, and magnify the total funding available.

  5. This is an interesting approach, but for it to be really powerful as you suggest, it requires publishers to cooperate in supporting such a policy. Unfortunately, many of them - and many vedors such as Amazon - think DRM is the answer.

    I use a donation system for my Creative Commons-released book, and I've already seen several donations from nice people! I added the "Donate" button almost as a lark, hoping that maybe someone would drop a tip here or there, but my main motivation in posting the ebook for free was initially to get more visibility for the book and then to combat piracy.

    One thing for sure: Book sales have changed a lot recently!


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