You've probably heard of this intriguing new crowd-funding service called Kickstarter, right? (If not, how are you getting this website from that cave of yours?). A lot of people are using it to fund all kinds of exciting new things, and it's obviously useful option for free software projects. Properly used, it can allow us to close the gap against proprietary applications that still have more polish or exist in niches that require more capitalization. But the idea that it is somehow immoral to ask for money to work on free software has got to go!
In the United States, Nielsen has long been the main source of data for evaluating television shows and stations for advertisers. It's considered a very reliable source. So their inclusion of data on web video watching habits in their 2011 report on the "The U.S. Media Universe" is a real boon to anyone planning to enter this field. It's interesting to ask what are the consequences to free culture productions and the free software used for creation and consumption of video arts.
Recently, as I was browsing the shelves of my local used book store, I realized that I was engaged in "piracy" of exactly the same kind as what the legacy entertainment industry has slammed as a scourge so terrible that it is worthy of giving up our online freedoms to protect. This is what SOPA is supposed to protect us from.
Recently, I was directed toward an excellent analysis of commons-based peer production as a phenomenon which separates "entrepreneurs" (who want to get things done and create value in the world) from "capitalists" (who want to get a return on an investment of property without contributing any labor). An observer -- clearly outside of the community of free software developers -- expressed dismay at the example of Mozilla Foundation, which makes money from the open source Mozilla project, but does not pay for most voluntarily contributed code improvements to the Mozilla software. Is he right? Is this exploitation of those contributors?
Can artists actually make money on a free software driven free culture project? Having established the motivations and the basic principles in the first two parts, I'm going to look at the big picture here: how money would be distributed among major parts of the project (drawing partly on knowledge accumulated from the proprietary film and television industry -- taking into account the differences), where the money would come from, and what sort of income might be realistic based on the few projects that have gone before us.
Thanks to Sam Tuke for a well-written and constructive response to my article Is free software major league or minor?. Tuke refers to my post as a "dismissal" of free software, however, which is ironic at best. There is no such dismissal in my article. Instead, there is a challenge: "Can we raise our game?" Furthermore, I would argue that classifying that challenge as a "dismissal" stems from a fundamental lack of faith in our ability to succeed -- which is ironically, the accusation Tuke levels at me. Where does this disconnect happen?
Information in the computer age is the last genuine free market left on earth except those free markets where indigenous people are still surviving (Russell Means)
Some of the surviving nations in North America have tried Casinos and call centers. Others have tried meat packing for freedom. Yet, unemployment remains high, over 80% for some communities, such as on the Lakotah reservations. Similarly, per capita income often remains below the poverty line. On the Lakotah reservations, per capita income is less than $4,000 annually. The exact story is of course different for each nation, but the overall results of these efforts have usually been rather bleak.
Could free software change things?
There is no "magic" to commons-based peer production. Most of the techniques that have brought free culture products ranging from software to art to electronic hardware have been in play for hundreds or thousands of years. But they do run counter to the patterns of commercial proprietary industry. Due to the massive improvements in communications and authoring technology, we have reached a point where we can be more productive in our "leisure" than we are in our "work". And any labor of love is almost always going to be superior to labor alone.
Most of the assumptions on which our present economic system is based are based on nothing much better than "conventional wisdom": which is a fancy way of saying "it just sounds plausible". Sometimes conventional wisdom is wrong, and that's what the first part of this book has been about: six things that ought to be impossible if conventional wisdom were correct. But if the foundational assumptions of our economy are false, then where does that leave the economy? And if it's no longer standing on a firm foundation, then what are the new rules?
A report by the Standish Group indicates that adoption of 'open source' has caused a drop in revenue to the proprietary software industry by about $60 billion per year. That's not a huge amount of money compared to what has been lost though the misselling of mortgages, but it is still a lot. The report identifies the value of these 'open source' products to be about 6% of the world market for software.
The bazaar development model turns out to be amazingly versatile: it seems that most software, even things you wouldn't think would be feasible, can be developed using such an approach. But there has to be some working core software before the community will have enough interest to contribute to a project, and there are some projects where that is really too much work for one person to do.
One such area is sophisticated 3D graphics applications, like Blender (and also Computer Aided Design applications, like BRL-CAD). Such projects typically need some sort of seed project in a "cathedral" mode in order to get started. Other projects, such as creative endeavors, are simply not going to be as successful in the committee atmosphere of a community-driven project.
In such cases, there's a need to simply accumulate capital and pay people for their work. But surely this is impractical for a loosely-bound group like the free culture community? Let's look for some counter-examples.
A new conventional wisdom began to spring up around free software, led in part by theorists like Eric Raymond, who were interested in the economics of free software production. Much of this thought centered around service-based and other ancillary sales for supporting free software. Based on this kind of thinking, it's fairly easy to imagine extending free licensing ideas to utilitarian works. But what about aesthetic works? The Creative Commons was established in 2002, largely to solve the kinds of licensing problems that aesthetic works might encounter, and it has been remarkably successful, pushing the envelope of even this newer wave of thought. Today, Creative Commons licensed works number in at least the tens of millions. And more than a quarter of those are using the "Attribution" or "Attribution-ShareAlike" free licenses.
A new conventional wisdom began to spring up around free software, led in part by theorists like Eric Raymond, who were interested in the economics of free software production. Much of this thought centered around service-based and other ancillary sales for supporting free software. Based on this kind of thinking, it's fairly easy to imagine extending free licensing ideas to utilitarian works. But what about aesthetic works? The Creative Commons was established in 2002, largely to solve the kinds of licensing problems that aesthetic works might encounter, and it has been remarkably successful, pushing the envelope of even this newer wave of thought. Today, Creative Commons licensed works number in at least the tens of millions. And more than a quarter of those are using the free "Attribution" or "Attribution-ShareAlike" licenses.
With any paradigm shift, it is difficult to see the new world from the old one, even though it is glaringly obvious once you've crossed over. Empirical evidence is one way to bridge the gap. Let's look at some solid evidence for the success of what is probably the most obvious "impossible" achievement of commons-based peer production: free software, as exemplified by the Debian GNU/Linux distribution.
With any paradigm shift, it is difficult to see the new world from the old one, even though it is glaringly obvious once you've crossed over. Empirical evidence is one way to bridge the gap. To that end, I want to show some solid evidence for the "impossible" things that commons-based peer production (CBPP) has already accomplished—things that the old conventional wisdom would tell us "can't be done". This week, I'll look at what is probably the most obvious case: free software.
Some people who advocate against free software claim that it's bad for the economy and not sustainable in the long term, because the lack of direct revenue on developing free software makes it harder to make money out of developing such software. If generating direct revenue out of software development is not possible, they claim, then less people will be inclined to write software professionally. In turn, this will mean that end-users will have less high-quality software available. Is that really true? Let's find out.
Revenue, and money as a motivator
One of the principles of free software is the ability to develop on a platform for your own personal advantage without having to pays IP fees to the framework originators. As we see from the free software movement this principle evolves itself into different models both in software and in other domains.
One business model that I’m surprised hasn’t been further explored for funding free software is advertising. Ads have been a standard way to make “free” media pay in countries like the USA, where advertising-based commercial television broadcasting has been the dominant medium for decades.
There are really two bazaars that fire the boilers for free software: one dominated by talented amateurs who create for love; the other, by professionals who create for money. This creates a curious bi-modal nature to the free software/open source community: there's always a certain amount of tension between the schedule-driven bottom-line interest of commercial entities like Novell, Red Hat, or even Canonical and individual hobbyist developers.
Companies seek to counter their competition in a variety of ways - pricing, packaging, branding, etc. There are a lot of options and any good product manager will know them well. One of the toughest situations to be in is that of competition, with the usual responses, when you are up against a competitor using the natural forces of the market place. Marketers refer to these tectonic shifts as “shocks”, because they are unusual events. They change the way the game is played, and once that change is made, there is usually no going back. The change is structural.