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UNDER REVISION | | | You can compete with zero
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< | Copyright is no longer needed in the Internet society where we live in. It is outdated and lacks of effectiveness, because it does not consider the social changes that technology has generated. When Copyright was born it was believed that monopolistic financial incentives stimulate artistic production and that it will guarantee artists a decent income. However, as Ithiel de Sola Pool conceived in 1983, copyright practices become unworkable with the arrival of electronic reproduction. Moreover, in recent years, some scholars such as Danny Colligan had written about why Copyright is detrimental to society, referring that its enforcement by the government necessarily entails monitoring computer communications and erodes public domain and free culture. | >
> | Copyright is no longer needed in the Internet society. It is outdated and lacks of effectiveness, because it does not consider the social changes that technology has generated. When Copyright was born it was believed that monopolistic financial incentives stimulate artistic production and that it will guarantee artists a decent income. However, as Ithiel de Sola Pool conceived in 1983, copyright practices become unworkable with the arrival of electronic reproduction. Moreover, in recent years, some scholars such as Danny Colligan had written about why Copyright is detrimental to society, referring that its enforcement by the government necessarily entails monitoring computer communications and erodes public domain and free culture. | | | In this new age, content is information and on a computer, information is anything that can be digitized, that is, encoded in a sequence of zeros and ones. In that order of ideas, information has two important properties that modify the foundations of Copyright: it is both non-exclusive (any number of people can access and use it simultaneously) and non-rivalrous (the fact that one person has more information does not imply that another person has less). | |
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< | Under this new scenario, the ownership idea must be change for access, sharing and selling added value. For example, Michael Masnik (Techdirt) explains that people do not buy “a movie”; they buy the “experience” of going to the theater. They like the differentiated value they can get from bundled goods and services that helps justify a price that is more than $0. Kevin Kelly (Wired Magazine) clarifies this approach and sustained that under actual technological circumstances, the idea is not to sell books or music copies, because they must be available to everyone, instead content industry should follow the path of attention to consumer preferences and provide intangible value to the content. In that sense, Kelly defined eight categories of intangible value that consumers will buy when they consider that it is worth value to pay for: immediacy, personalization, interpretation, authenticity (quality), accessibility, embodiment, patronage and findability. These generatives demand an understanding of how abundance breeds a sharing mindset. | >
> | Under this new scenario, the ownership idea must be change for access, sharing and selling added value. For example, Michael Masnik (Techdirt) explains that people do not buy “a movie”; they buy the “experience” of going to the theater. They like the differentiated value they can get from bundled goods and services that helps justify a price that is more than $0. Kevin Kelly (Wired Magazine) clarifies this approach and sustained that under actual technological circumstances, the idea is not to sell books or music copies, because they must be available to everyone, instead content industry should follow the path of attention to consumer preferences and provide intangible value to the content. In that sense, Kelly defined eight categories of intangible value that consumers will buy when they consider that it is worth value to pay for: immediacy, personalization, interpretation, authenticity (quality), accessibility, embodiment, patronage and findability. These generatives demand an understanding of how abundance breeds a sharing mindset. | | | | |
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< | In accordance to the referred economical model, and proposing the freemium business model (combination of free and premium), Fred Wilson stated that the market will identify the right point to pay money to information providers, when they see a real value: “free gets you to the place where you can ask to get paid.” Wilson’s model realizes that the cost of delivering many services over the Internet has decreased significantly from what it cost to deliver them in the analog world. Thus, once you have built a large audience providing free content, then you can offer premium priced value added services or an enhanced version of your service to your customer base. | >
> | In accordance to the referred economical model, and proposing the freemium business model (combination of free and premium), Fred Wilson stated that the market will identify the right point to pay money to information providers, when they see a real value: “free gets you to the place where you can ask to get paid.” Wilson’s model realizes that the cost of delivering many services over the Internet has decreased significantly from what it cost to deliver them in the analog world. Thus, once you have built a large audience providing free content, then you can offer premium priced value added services or an enhanced version of your service to your customer base. | | | | |
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< | In 1997 and in a more economical sense, Eric Schlachter described that the profit-maximizing price on the Internet will be where marginal revenue equals marginal cost, because intellectual property will be cross subsidized by other products in a manner sufficient to cover the fixed costs associated with intellectual property creation and distribution. Under this statement, Schlachter considered that a market price of zero for intellectual property can still create long-term economic profits by means of advertising, sales of upgrade models and sales of complementary technology. Michele Boldrin and David K. Levine, also contribute to this economical discussion demonstrating potential profitability in an age of unrestricted copying. In their book, Against Intellectual Monopoly, they discuss several instances where the absence of copyright has not led to bankruptcy, and in the contrary some industries became profitable. For instance, consumers may often pay to get access to the breaking news stories first, even though the same will eventually be available to the public at a later time. Recently, Pandora, MOG and Spotify business models follow this path in the music industry, where users would listen for free, but they would have to submit to a few minutes of advertisement every hour. | >
> | In 1997 and in a more economical sense, Eric Schlachter described that the profit-maximizing price on the Internet will be where marginal revenue equals marginal cost, because intellectual property will be cross subsidized by other products in a manner sufficient to cover the fixed costs associated with intellectual property creation and distribution. Under this statement, Schlachter considered that a market price of zero for intellectual property can still create long-term economic profits by means of advertising, sales of upgrade models and sales of complementary technology. Michele Boldrin and David K. Levine, also contribute to this economical discussion demonstrating potential profitability in an age of unrestricted copying. In their book, Against Intellectual Monopoly, they discuss several instances where the absence of copyright has not led to bankruptcy, and in the contrary some industries became profitable. For instance, consumers may often pay to get access to the breaking news stories first, even though the same will eventually be available to the public at a later time. Recently, Pandora, MOG and Spotify business models follow this path in the music industry, where users would listen for free, but they would have to submit to a few minutes of advertisement every hour. | | |
- Richard Stallman, Misinterpreting Copyright (http://www.gnu.org/philosophy/misinterpreting-copyright.html) | |
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< | - Kevin Kelly, Better than Free (January 31, 2008) (http://www.edge.org/3rd_culture/kelly08/kelly08_index.html)
- Michele Boldrin and David K. Levine, Against Intellectual Monopoly (November 11, 2005) (http://www.dklevine.com/general/intellectual/against.htm)
- Mike Masnik, Saying You Can't Compete With Free Is Saying You Can't Compete Period, Techdirt (February 15, 2007) (http://www.techdirt.com/articles/20070215/002923.shtml)
- Fred Wilson, Freemium and Freeconomics (July 4, 2009) (http://www.avc.com/a_vc/2009/07/freemium-and-freeconomics.html) | | | Once again, you should
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