From: Alistair Davidson <lord_inh(a)yahoo.co.uk>
Date: Sun, 09 Sep 2001 15:10:40 +0100
Now, if you think back to your economics classes, you'll remember that
in an environment where competition exists, prices approach the marginal
cost. So if it costs £100 to create a prototype, and £1 to produce each
copy of that, the price shouldn't be too much higher than £1 once
competition has come into play. Obviously, companies like to have a
profit margin and need to recoup their initial investment, but certainly
the cost of one unit should be under £1.50.
Imagine that what you're producing is music, or software, or some other
form of information. Suddenly, the marginal cost is extremely close to
0. In fact, it may be 0, with a one-off cost to seed distribution of
your music, and all further distribution performed by your listeners.
It seems ludicrous, in such an environment, to charge for distribution.
The price tends towards the marginal cost, so the price of your music
should be extremely low, if you allow listeners to make their own
copies. What's needed is a way of covering that one-off cost. Companies
and some individuals that profit from the sale of information would have
us believe that a non-scarce resource should cost money. They try to
enforce this idea by making a non-scarce resource scarce, using
copyright laws. They talk of "intellectual property" and "copyright
theft". But "intellectual property" is not like normal property. If I
commit an act of "copyright theft", I don't deprive the owner of their
"property", like with normal theft.
So, how do you cover the cost of creation (as opposed to the cost of
production/marginal cost, which is effectively 0)? There are a number of
ways. The most popular right now is to charge for additional value that
is sold on top of your product- for example, making CDs and charging
money for them is okay, because there is a significant marginal cost,
and your listeners gain value from things like sleeve notes, and the
benefits of having the music on a physical medium. Red Hat software
gives away its Linux distribution (you can download it from their
website, and it regularly appears on magazine cover-disks), but if you
pay them money they will also provide technical support, and an
automated update service. Richard M Stallman, founder of the Free
Software Foundation (that's free-as-in-freedom, not free-as-in-beer),
supported himself for some time by giving away the Emacs text editor- he
only charged if you wanted it on disk. He also made money by customising
the software for companies- if a company wanted feature x, they could
pay him to add it.
Red Hat turned profitable earlier this year, in an environment where
many established IT companies are struggling- even Microsoft is
frantically trying to find new business models, because most people no
longer see any need to upgrade to the latest version of Windows or
Office or whatever, they had 95% of user's needs covered by Windows 98 +
Office 97 + Internet Explorer 5.0.
There's a second method, which is slowly gaining ground. This is to
distribute your product free of charge, and ask altruistic
listeners/readers/users to give you small donations if they like what
you do- kind of like a busker. It sometimes helps to point out that if
you don't receive enough donations to break even, you won't be able to
offer music or your comic or your software any more. Kuro5hin.org gets
money from advertising, and also offers an advertisement-free version, if
you pay a subscription fee. Many online comics and garage bands also
make money from selling t-shirts and so on.
There's one final myth that needs to be exploded- that if there's no way
to make money from software development / music / comics / book-writing
/ whatever, people will stop doing it. This is patently not true. You've
been playing music for years, mostly at a loss. I have an online comic,
which makes me no money but costs me none either. The world has
thousands of garage bands and underground magazines and so on that
barely cover their costs- why do they do it? The simple reason is that
creating things is fun, and it's nice when people gain enjoyment from
your work. Personally, I don't want art that's created solely for money-
I'd rather have one decent amateur musician than a thousand Brittany
Spears clones.
It's like "the Economist" was saying a while ago; the music industry
wants to create artificial scarcity of information not because this is
the best way of ensuring future creation of art, or because it's best
for the artists, or the public. They want artificial scarcity in order
to protect their existing business models.
I hope you can understand my position on copyright now. I don't
necessarily want complete abolition, but huge reform is needed for
copyright to keep in step with new technologies, and creating scarcity
where none need exist is *not* the kind of reform I mean.
I'd ask that if you agree with any of my arguments here, you carefully
consider the license under which your music will be published, think
about using the Electronic Frontier Foundation's Open Audio License for
the works that are copyrighted to Tarneybackle, and your interpretations
of traditional songs (can performances of traditional songs be
copyrighted?).
There's a FAQ about the license here:
http://www.eff.org/IP/Open_licenses/20010421_eff_oal_faq.html
The license itself is here:
http://www.eff.org/IP/Open_licenses/eff_oal.html
The GNU Free Documentation License, which is the license I intend to
apply to the website, is here: http://www.gnu.org/copyleft/fdl.html
--
Alistair
