After the advertising bubble bursts

Thesis #74 of The Cluetrain Manifesto says, “We are immune to advertising. Just forget it.” We wrote that in 1999, when everybody thought that advertising was going to be THE model for businesses on the Internet. The crash came less than a year later.

Then the next bubble came, and this time everybody thought (surprise!) that advertising was going to be THE model for businesses on the Internet. This time they were right, because Google made it so. In fact, Google makes billions with advertising, not just for itself, but for millions of other sites, including countless blogs. Google does it by making advertising accountable, and by moving the wasteful side of guesswork. They take it off ink, paper, airwaves and billboards, and shift it to server cycles, pixels, rods and cones.

Still, most advertising is still wasted. The difference now is that advertising is accountable while it wastes less costly things. This is fine as far as it goes, which is pretty far, even in the current crash.

But advertising is still a bubble, and has been since it was invented more than a century ago. I’ve been saying this for many years, including last month right here.

In fact, last May I reported how Mike Arrington of TechCrunch was “outraged” by my suggestion that advertising was a bubble (or something to that effect… it’s in this podcast somewhere… maybe one of ya’ll can hunt down the quote). [Later... Dave Wallace found a clip.]

Now comes Why Advertising Is Failing On The Internet, by Eric Clemons, Professor of Operations and Information Management at Wharton, writing in TechCrunch, no less. When I read it the thought balloon over my head said “Yess!” and “Amen, brother!” over and over. For example:

Pushing a message at a potential customer when it has not been requested and when the consumer is in the midst of something else on the net, will fail as a major revenue source for most internet sites.  This is particularly true when the consumer knows that the sponsor of the ad has paid to have this information, which was verified by no one, thrust at him.

Exactly what we said in Cluetrain, and what most people say when they look for havens from advertising, which they find with TiVo and many ad-free places on the Web.

Clemons follows that with this:

The net will find monetization models and these will be different from the advertising models used by mass media, just as the models used by mass media were different from the monetization models of theater and sporting events before them.  Indeed, there has to be some way to create websites that do other than provide free access to content, some of it proprietary, some of it licensed, and some of it stolen, and funded by advertising.

At ProjectVRM we have been working on one, called PayChoice. [Later... changed to EmanciPay.]  Since most of you don’t follow links, I’ll drop the first two sections in right here:

Overview

PayChoice is a new business model for media: one by which readers, listeners and viewers can quickly and easily pay for the goods they use — on their own terms, and not just those of suppliers’ arcane systems.

The idea is to build a new marketplace for media — one where supply and demand can relate, converse and transact business on mutually beneficial terms, rather than only on terms provided by thousands of different silo’d systems, each serving to hold the customer captive.

PayChoice is a breed of VRM, or Vendor Relationship Management. VRM is the reciprocal of CRM or Customer Relationship Management. VRM provides customers with tools for engaging with vendors in ways that work for both parties. PayChoice is one of those tools. Or a set of them.

Background

We now live in a media environment where goods previously sold directly or paid for by advertising are freely available and shared widely over the Internet. A number of factors contribute to a business and social conundrum for suppliers of those goods:

  • Easy copying and sharing makes the goods freely available at growing ease and convenience.
  • Copying and sharing is so widespread and common that punishment for copyright and other usage violations touches only a small minority of offenders, and has proven to be a losing proposition.

What the marketplace requires are new business and social contracts that ease payment and stigmatize non-payment for media goods. The friction involved in voluntary payment is still high, even on the Web, where one must go through complex forms even to make simple payments. There is no common and easy way either to keep track of what media (free or otherwise) we consume (see Media Logging), to determine what it might be worth, and to pay for it easily and in standard ways — to many different suppliers. (Again, each supplier has its own system for accepting payments.)

PayChoice will create a “buy button”-simple payment system to allow readers, listeners and viewers to pay whatever they like, at their discretion, for whatever media products they use. For too many media the traditional business models — subscriptions, newsstand sales, advertising and underwriting — are not sufficient. (Especially in the current economic environment, which is akin to an earthquake that won’t stop.) Nor do they support full participation and involvement with their users.

PayChoice differs from other payment models (subscriptions, newsstand, tip jars) by allowing the customer to pay any amount they please, when they please, with minimum friction — and with full choice about what they disclose about themselves. PayChoice will also support credit for referrals, requests for service, feedback and other relationship support mechanisms, all at the control of the user. For example, PayChoice can provide quick and easy ways for listeners to pay for public radio broadcasts or podcasts, for readers to pay for otherwise “free” papers or blogs, and paid request for stories or programs to be expressed and aggregated, without requiring the customer to disclose unnecessary private information, to become a “member”. This will scaffold real relationships between buyers and sellers, and for supporting journalists covering what Jake Shapiro calls “microbeats.” It will also give deeper meaning to “membership” in non-profits. (Under the current system, “membership” means putting one’s name on a pitch list for future contributions, and not much more than that.)

PayChoice will also connect the sellers’ CRM (Customer Relationship Management) systems with customers’ VRM (Vendor Relationship Management) systems, supporting rich and participatory two-way relationships. In fact, PayChoice will by definition be a VRM system.

Micro-accounting

The idea of “micro-payments” for goods on the Net has been around for a long time, and has recently been revitalized as a potential business model for journalism by an article by Walter Isaacson in Time Magazine. What ProjectVRM suggests instead is something we don’t yet have, but very much need: micro-accounting for actual uses. These including reading, listening and watching.

Most of what we now call “content” is both free for the taking and worth more than $zero. How much more? We need to be able to say.

So, as currently planned, PayChoice would -

  1. Provide a single and easy way that consumers of “content” can become customers of it. In the current system — which isn’t one — every artist, every musical group, every public radio and TV station, has his, her or its own way of taking in contributions from those who appreciate the work. This can be arduous and time-consuming for everybody involved. What PayChoice proposes, however, is not a replacement for existing systems, but a new system that can supplement existing fund-raising systems — one that can soak up much of today’s MLOTT: Money Left On The Table.
  2. Provide ways for individuals to look back through their media usage histories, inform themselves about what they have been enjoying, and to determine how much it is worth to them. The Copyright Arbitration Royalty Panel (CARP), and later the Copyright Royalty Board (CRB), both came up with “rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller” — language that first appeared in the 1995 Digital Performance Royalty Act (DPRA), and tweaked in 1998 by the Digital Millennium Copyright Act (DMCA), under which both the CARP and the CRB operated. The rates they came up with peaked at $.0001 per “performance” (a song or recording), per listener. PayChoice creates the “willing buyer” that the DRPA thought wouldn’t exist.
  3. Stigmatize non-payment for worthwhile media goods. This is where “social” will finally come to be something more than yet another tech buzzmodifier.

All these require micro-accounting, not micro-payments. In fact micro-accounting can inform ordinary payments that can be made in clever new ways that should satisfy everybody with an interest in seeing artists compensated fairly for their work. An individual listener, for example, can say “I want to pay 1¢ for every song I hear on the radio,” and “I’ll send SoundExchange a lump sum of all the pennies wish to pay for songs I hear over the course of a year, along with an accounting of what artists and songs I’ve listened to” — and leave dispersal of those totaled pennies up to the kind of agency that likes, and can be trusted, to do that kind of thing.

Similar systems can also be put in place for readers of newspapers, blogs and other journals.

What’s important is that the control is in the hands of the individual, and that the accounting and dispersal systems work the same way for everybody.

No, we don’t have it yet, but we do plan to put it in the Public Radio Tuner in due time. It will help that well over a million of those tuners have been downloaded so far for iPhones.

Back to Eric Clemons’ piece:

The internet is the most liberating of all mass media developed to date.  It is participatory, like swapping stories around a campfire or attending a renaissance fair.  It is not meant solely to push content, in one direction, to a captive audience, the way movies or traditional network television did.  It provides the greatest array of entertainment and information, on any subject, with any degree of formality, on demand.  And it is the best and the most trusted source of commercial product information on cost, selection, availability, and suitability, using community content, professional reviews and peer reviews.

My basic premise is that the internet is not replacing advertising but shattering it, and all the king’s horses, all the king’s men, and all the creative talent of Madison Avenue cannot put it together again.

This is exactly where we were going in Cluetrain. Back then, and still today, people tend to think of the Net as yet another one-way producer-to-consumer “medium” for “delivering messages” along with goods that “consumers” pay for. But the Net was and remains a place that serves demand at least as well as it serves supply. The demand side just hasn’t been fully equipped yet. That’s what the VRM movement (which includes but is not limited to ProjectVRM) is all about providing. When we (and others) succeed, we won’t just be consumers anymore. We’ll be customers in full standing.

Eric Clemons goes on to explain many reasons why advertising is a bubble. I agree with all of them, though I am not as pessimistic about Google, for the main reasons Jeff Jarvis visits in What Would Google Do? The fact remains that Google, more than any other large company operating on the Web, gets the fundamentals of abundance: that you make money because of it rather than with it. They know the vulnerability of advertising as a model, and I expect them to work no less hard disrupting the model than they have at building it out. (Perhaps in their secret labs they are already at work on this. I don’t know. But if they’re smart, which they are, they’re on the case.) Clemons closes with this:

The internet is about freedom, and I suspect that a truly free population will not be held captive and forced to watch ads.  We always knew that freedom comes at a price; perhaps the price of internet freedom and the failure of ads will be paying a fair price for the content and the experience and the recommendations that we value.

Among the other tools we need are pricing guns for customers. We haven’t had that since before Industry won the Industrial Revolution. But we’ll get them. PayChoice is one example of them. There will be more. And they’ll work because not paying will be increasingly stigmatized.

Right now, for example, most music is available for free. Never mind that some of us call downloading it “theft” or “piracy”. The other price is 99¢, which millions pay in iTunes and through other online stores. Those two price points are not enough. We need ones we can set on our own.

For years Congress and its regulatory arbitrators (first the Copyright Arbitration Royalty Panel and later the Copyright Royalty Board) have been saying there is no “willing buyer” to match the “willing seller” in the online radio, or streaming, business. That is, Internet radio. So, in the absence of that buyer, these panels have handed the pricing gun to the sellers (the RIAA and its collection agency, SoundExchange), but set the prices first. Last I heard, the royalty rate was set to peak at $.0019 per recording, per listener, in 2010.

If you pay 99¢ per song, you’d have to listen to it, what, 521 times to equal the same rate? If you use iTunes, check and see how many times you listen to any song.

So I’m thinking, hey, I’d be glad to pay a penny a recording for what I hear on the radio. These days you have a huge choice of radio stations on the Net. Most play music. All could carry data about that music. I’d be glad to account for that listening, and pay accordingly. And I’d like right now to set that price at a defaulted penny a song. I’d be glad to aggregate my listen-logging with others, with a pledge or an escrow account containing a sum of money for dispersal to artists at that rate. And see what happens.

In fact, that’s what I want to do with PayChoice after we work out the kinks by providing a supplementary business model for public media. Stay tuned.

Oh, and this topic will be among the many I’ll talk about at lunch tomorrow at the Berkman Center. More here.

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79 comments

  1. bowerbird’s avatar

    simon-

    i said this:
    > “customers won’t pay…
    > fans will, because they
    > want their status as fans
    > publicly acknowledged”

    in reply, you said this:
    > might seem politically-correct to some,
    > but it is an assertion that is
    > not backed up by any empirical data
    > or reference to some kind of
    > objective evidence.

    i then supplied data and evidence.

    you said “of course that’s true”, and then
    maintained you aren’t talking about that.

    so, you know… you have confused me…

    and i will leave it at that, thank you…

    artists-and-fans _will_ change the world.
    if the greedy people don’t blow it up first.

    -bowerbird

  2. Simon Edhouse’s avatar

    Bowerbird,

    “empirical data and evidence” that fans buy merchandise? You were wanting to prove that fans buy merchandise? No argument.

    However, strictly speaking, fans are customers… but you differentiate them. You say “customers won’t pay, but fans will”… OK, so… I guess your argument is that, VRM and the PayChoice button will work as a system, providing it involves selling highly desirable stuff to devoted fans, who really want that stuff… and they will pay an “inflated price because they know that money goes to the band”

    OK… so the suggested system we have been discussing, is that:

    PayChoice will create a “buy button”-simple payment system to allow readers, listeners and viewers to pay whatever they like, at their discretion, for whatever media products they use.

    So, yes… you are right. If the PayChoice Button is used for these enthusiastic fans who “buy those t-shirts to show fanhood,
    and laugh at the inflated price…
    Then the PayChoice button will indeed work!

    What was I thinking? This is pure genius… all we have to do is get all customers, (sorry “fans”) to be in this state of mind, and Doc Searls will get the Nobel Prize for economics; and you will have a good percentage of the bragging rights for making it all so clear for everyone.

  3. Doc Searls’s avatar

    bowerbird,

    A pause amidst the fray to say I love worthapenny. Downstream, after we get paychoice working for public radio, I want us to bring it to the music business. It wouldn’t be through a site, but through a simple pledging and/or escrowing a penny for every song heard on the radio, a podcast, or in a live performance. Where and how the sums get stored is open for whatever business anybody wants to build around it.

    More about this later when I have time.

    Meanwhile, much thanks to all contributing to this thread.

    Again, it’s early. We’re raising a barn here. Or … something. All help is welcome.

  4. Doc Searls’s avatar

    Simon, I do get (your later sarcasm aside) that you’re trying to be constructive and just doing some tire-kicking. And I know you understand what VRM is about and support its general ambitions.

    It needs to be said that what I’m proposing with paychoice is a set of unproven theses. No arguments against them will be wrong. Not yet, anyway.

    Also, we’re not trying to cure cancer or world hunger here. We’re proposing a new voluntary payment system for free stuff — one that gives the customer a pricing gun, and a few handy other tools (not much mentioned above) to go with it.

    This hasn’t been done before, and it might not work. But if it fails, what’s to lose, other than time and effort that will prove instructive anyway? If it succeeds, it won’t win anybody a Nobel prize. It’ll just add to the roster of ways of paying for some things.

    It doesn’t need to be more complicated than that.

  5. LEADSExplorer’s avatar

    Survey (for all of you commenting above):

    Who clicks on the online advertising?

  6. bowerbird’s avatar

    ok, well i think doc has cleared stuff up
    with this last comment of his, so thanks.

    doc makes it clear that he’s talking about
    _voluntary_ payments for _free_ stuff…

    that is, paychoice is about digital goods,
    with their new-and-unique quality that
    the “copying and sharing” of these things
    is now _easy,_common_and_widespread_.

    because of this, even if such goods were
    not originally offered on a cost-free basis,
    they’re _de_facto_ available cost-free, as
    > punishment for copyright and
    > other usage violations touches only
    > a small minority of offenders, and
    > has proven to be a losing proposition.

    in other words, paychoice — which is what
    we’re discussing, simon — as it’s imagined
    has little to do with the commercial world
    of scarce-and-limited _physical_ goods
    and their necessarily-high variable costs.

    so, simon, dragging the marketplace into
    the discussion here, which you have done
    repeatedly, is simply off-topic, in my view.
    further, the idea, which you expressed on
    twitter, that you are “kicking arse” here,
    is just downright silly. that’s my opinion.
    you might be kicking, but your foot ain’t
    hitting doc’s “arse”, it’s just flailing in air.

    i hope that doesn’t sound harsh, because
    i don’t mean it harsh. it’s just my opinion.
    but i have no doubt that it’s what i think.

    ***

    simon said:
    > I guess your argument is that,
    > VRM and the PayChoice button
    > will work as a system, providing
    > it involves selling highly desirable
    > stuff to devoted fans, who really
    > want that stuff… and they will pay
    > an “inflated price because they
    > know that money goes to the band”

    so, i guess reading comprehension is
    not one of your strong suits, is it now?

    so let me try and make it more simple.

    the reason i had to express the fan bond
    in _commercial_ terms like “t-shirt sales”
    is because we don’t have infrastructure
    that allows it to be expressed as a _gift_.

    fans would be willing to _gift_ the artist
    – hand them a small amount of cash –
    if there was an infrastructure allowing it.
    but there isn’t, so fans “give their gift”
    in the best way they can, which is by
    allowing themselves to be “overcharged”
    for things like t-shirts, posters, and such.

    but if there was a method facilitating it,
    i’m convinced fans would be willing to
    gift a small amount of cash voluntarily.

    in other words, the t-shirt itself is largely
    superfluous. (not entirely, but largely.)

    and you can see this, for yourself, simon,
    by seeing how people tip in a restaurant.
    we’ve created a convention whereby you
    can “gift” your server in a small amount,
    or even not-so-small, and people _do_…

    now, there’s no _bond_ there between
    the customer and the server. all parties
    agree that it’s a one-time occasion, and
    that what’s being expressed is not “love”,
    but merely appreciation for good service.
    yet many people make their living off of
    this convention of voluntary reciprocation.

    so what i’m saying is that we can create
    this convention between artist and fans,
    since there already exists a bond there
    – a strong one — and “love” is relevant.
    and i believe artists can make their living
    off of this convention of gift-reciprocation.

    that is why i expressed my opposition to
    paychoice vocabulary that casts the thing
    in terms of “buyers and sellers”, because
    “love” is a _critical_ part of this equation,
    and love has no place in the marketplace.

    the situation runs a little deeper, in that
    i believe it takes a little bit of something
    to stimulate the gift from fan to artist –
    but i don’t think it will take all that much.

    i believe fans want to be in a community,
    that they want their fanhood expressed,
    so i feel the voluntary gift of cash needs
    to be reciprocated by public recognition
    that acknowledges the gift as a signal of
    the fan’s appreciation, and thus serves to
    identify the fan as a community member.

    that’s all it’d take: a public recognition of
    the gift, placing the fan in the community.

    ***

    doc said:
    > through a simple pledging and/or
    > escrowing a penny for every song
    > heard on the radio, a podcast,
    > or in a live performance

    well, pledging and escrowing sounds like
    they’re something done _before_ the fact.

    i tend to think in terms of after-the-fact…
    the artist puts out a free gift, and the fans,
    on coming to respect its value, reciprocate.

    plus if you’re paying a penny for every song,
    rather than only the songs that you _love_,
    then i’d say you’re a fan of the radio station.

    but maybe these aren’t fundamental gripes,
    rather just merely implementation details…

    -bowerbird

  7. Simon Edhouse’s avatar

    Doc,

    sarcasm is the unfortunate last resort when it all gets too silly…

    I have a number of concerns, 1st of which is that you appear to have been ‘moving the goal-posts’… VRM stands for ‘Vendor Relationship Management’. ‘Vendors’ vend… definition: verb [ trans. ] “offer (small items, esp. food) for sale” i.e. they sell stuff…

    If you are: “…proposing a new voluntary payment system for free stuff” then you have chosen a very soft-target; and please explain: Why does the customer need “a pricing gun” for things that are already ‘free’?

    There are a lot of reasons why ‘Free’ should remain ‘Free’… You must be aware of a lot of so-called new-economy thinking coming from some very smart guys like Umair Haque, Chris Anderson, Geoffrey Moore and Clay Shirky (and I would have thought, for starters, that Umair Haque’s well known standard non-negotiables, might have resonated with you) i.e.

    > Light beats heavy.
    > Open beats closed.
    > Free beats paid.
    > Good beats evil.

    and then of course there’s Chris Anderson’s well constructed arguments on exactly this topic: i.e. ‘Free! Why $0.00 Is the Future of Business’ http://tinyurl.com/2okqbk and a direct link to a video presentation by Chris: http://tinyurl.com/dcvtqz

    Geoffrey Moore: “…From computing is free to memory is free to now the bus is free. It changes the economic game, particularly for services businesses.” http://tinyurl.com/dc3oa3

    and Clay Shirky on: “why free communities are more thorough, creative and productive than formal institutions designed to accomplish the same things.” http://tinyurl.com/6g7dpf

    Now, Clay’s talk, although absolutely brilliant, is not strictly about pricing models and/or the wisdom of ‘Free’ vs ‘Paid’ like Haque, Moore and Anderson, but Clay’s talk is fascinating in that he starts by using Flickr as an example of “coordination costs falling through the floor” and the macro consequences thereof …he highlights that the Printing Press “precipated 200 years of chaos” and points to a likely upcoming “50 years of chaos… in which loosley coordinated groups will have increasingly high leverage”

    This all may sound over-complex and unrelated… BUT, its very much about the same phenomena that Chris Anderson, Umair Haque and Geoffrey Moore have been table-thumping about and its directly related to the ‘open-source’ movement.

    Which side of history are you on?

  8. bowerbird’s avatar

    simon said:
    > Which side of history are you on?

    maybe doc is on the side of _the_future_,
    and thinks “history” is not all that relevant.

    here in the 21st century (welcome, simon!)
    many things once offered at a _price_ –
    like music, books, movies, and the news
    – are now being provided “free of charge”,
    which is wonderful, except for the nagging
    question about how creators will get paid.

    that’s the question doc is trying to answer.

    i’m kinda surprised you haven’t heard about
    this question being asked by lots of people,
    simon, because it’s rather a big deal today…

    -bowerbird

  9. Doc Searls’s avatar

    Simon,

    Re:

    I have a number of concerns, 1st of which is that you appear to have been ‘moving the goal-posts’… VRM stands for ‘Vendor Relationship Management’. ‘Vendors’ vend… definition: verb [ trans. ] “offer (small items, esp. food) for sale” i.e. they sell stuff…

    Not sure what you’re talking about here. If you’re insisting on a strict definition of ‘vendor’, sure. We’re using it more broadly than that. Problem is, we don’t have a single noun that covers all conditions. Also that “VRM” caught on while other terms did not, and now we’re stuck with it until something better comes along. Suggestions welcome.

    If you are: “…proposing a new voluntary payment system for free stuff” then you have chosen a very soft-target; and please explain: Why does the customer need “a pricing gun” for things that are already ‘free’?

    We chose a soft target — public radio — because it is soft, and because its value for many customers exceeds zero. The same is true also of music and many other forms of media.

    The customer needs a pricing gun because it would be good to have one. In economic terms, it can be a signaling mechanism to sellers. Right now the signaling only goes one way: from seller to buyer. We want to give customers a way to send pricing (and other) signals the other way: from buyers to sellers.

    Right now public radio has essentially two pricing mechanisms. One is to pitch big contributors for underwriting. The other is to pitch listeners to become members. Most of us are familiar with the second method, which involves “pledge breaks” in programming. It also involves donation systems on station websites. Even though these systems allow listeners to contribute any amount they wish, it’s always on the station’s terms, and within the stations’ CRM systems (or the equivalent).

    Right now, for example, I would like to contribute money to WUMB in Boston. But when I click on the renewal link in their reminder email, I get to a page that says I need to enable cookies. I have cookies enabled. If I go ahead and try to contribute in any case, I assume I’ll appear as a new rather than a returning one. I don’t want that. I want them to remember that I’m a loyal listener. So we’re at an impasse. I haven’t renewed yet because their system is broken.

    Instead I want my own way to say what I like about the station and how much I want to contribute. Also to remind the station that I’m a returning customer, whether or not they want to call me a “member”. I’d also like my own way to say, “Here’s everything I’ve been listening to, if you want to know.”

    So, for example, let’s say I really like Acoustic Sunrise. I’d have my own way to say that. It would be a standard way that works with all stations, and not just WUMB. I’d also have a way to say I also really like American Routes, and would be glad to pay to hear it in podcast form.

    This latter kind of feedback is critical if we want to get rid of insane copyright regulations that require producers to get specific permission from every copyright holder before music is podcast (while the same is not the case for what’s played over the air or in live streams). If that feedback comes only through each station’s and producer’s own websites, all different from each other, and many with no easy and standardized means for communicating with them, not much will happen. The PayChoice system will provide that standard means. If all goes the way I hope, lots of music producers will go pound on Congress to change the copyright terms.

    As for music over the Net, right now it has three prices: 1) free to download (what the music companies call “piracy”), 2) $.0019 paid by Internet radio stations to the RIAA for streaming each song to each listener; and 3) 99¢ through Apple (or other similar prices through less popular sources). Those aren’t enough, and they’re set entirely by sellers. If you had a pricing gun, you could say, for example, “I’m paying 1¢ for every song I hear on podcasts or live streams”. You could keep track of those songs (with ListenLog) and choose what and how to pay for them (through PayChoice).

    There are a lot of reasons why ‘Free’ should remain ‘Free’… You must be aware of a lot of so-called new-economy thinking coming from some very smart guys like Umair Haque, Chris Anderson, Geoffrey Moore and Clay Shirky (and I would have thought, for starters, that Umair Haque’s well known standard non-negotiables, might have resonated with you)

    Oddly, the only one of those I haven’t yet met is Umair, who is right across the campus here at Harvard. We’ll correct that. But yes, I’m familiar with what all of them say. In fact Chris Anderson starred in a panel I moderated a couple weeks ago at SXSW, titled “Rebuilding the World With Free Everything“.

    What all of these guys talk about is what I summarize as “because effects”. These are what happens when you make money because of something rather than with it. For example, Wired makes money selling its magazines through subscriptions and on newsstands in part because they also give them away for free on the Web. (This is something Chris talked about on the panel.)

    I’m all for that. Hell, I use it myself with this blog. I make money because of the blog rather than with it.

    What we’re working on with VRM is different. We’re working on “with” cases rather than “because of” cases. We want to make it possible for people to pay easily for stuff that’s available for free but worth more than that. One can do this now in a few isolated cases, as the TechDirt piece that bowerbird linked to points out. What we want to do with PayChoice is expand far beyond those isolated cases, which are still under the control of the seller. We want to put payment under the control of the buyer, and to do it in a way that gets standardized, so sellers have a simple, easy and straightforward way to take in the money (plus whatever other information might come through the same channel).

    Does that clear things up?

  10. Simon Edhouse’s avatar

    Doc,

    to say that public radio’s value “exceeds zero”, as you also indicate does ‘music’ and ‘many other forms of media’, is something only a fool would argue against. (If something has ‘zero value’… who wants it?) But it still does not explain why a “pricing-gun” (and I’m not clear what that term actually means) is needed, if the goods/services in question are free.

    To say: “The customer needs a pricing gun because it would be good to have one.” is… well, at best a very facile justification.

    You say: “In economic terms, it can be a signaling mechanism to sellers. Right now the signaling only goes one way: from seller to buyer.

    Actually… buyers ‘vote with their feet’, with their purchases, with their ‘churn-rate’ from telco-networks and ‘subscriptions’, ‘page-views’ and ‘click-throughs’ on the web… demand tells supply a lot. To ignore all that and say that all this is not so, in such an unqualified (without defining context) statement is disingenuous.

    The kind of feedback mechanisms that you say you as a public-radio listener, could be enacted by you as an individual, but you indicate you require a pan-systemic epiphany that will induce “lots of music producers will go pound on Congress to change the copyright terms.” That is sooooo Yasgur’s-Farm meets a Larry Lessig wet-dream!

    Your strategies are the opposite of ‘disruptive’… You can’t knock on the door of the Tower of Babel and say: “Excuse me, but I’d like to knock you down and make you irrelevant”… To deal with a behemoth multiple times your size, you have to either do a Trojan Horse or put into play a benefit that is determined at the level of the architecture of the system, not one that tries to apply an honor-system as a component/button in the system you want to disrupt.

    Also, your description of “because effects”, as what happens when you make money because of something rather than with it, is ‘riddle-like’, and doesn’t seem to have much gravitas because the object of your making money ‘with’ something seems usually to be something that is already available for free. As they say: where’s the business-model?

    If your mission is simply to: “make it possible for people to pay easily for stuff that’s available for free but worth more than that. then there isn’t going to be much to discuss…

  11. bowerbird’s avatar

    simon said:
    > where’s the business-model?

    there isn’t one. and that’s the whole point.

    but your persistence is… curious, simon.

    perhaps you’d like to explain your vision?

    -bowerbird

  12. Simon Edhouse’s avatar

    Bowerbird,

    Doc says: “We want to put payment under the control of the buyer, and to do it in a way that gets standardized, so sellers have a simple, easy and straightforward way to take in the money (plus whatever other information might come through the same channel).

    That is an attempt at describing a business-model, so saying simply that “there isn’t one” is yet more fancy (and evasive) footwork…

    “A pricing-gun – for free-stuff – because it would be good to have one”

    ..and I’d like a car that ran on water and generated enough electiricity while doing so to power my house! ….why? because it would be good to have one.

    Explanation? You could start here: http://www.edgepolitics.com/?cat=18

    But in short, there is a science to ‘Disruption in Marketplaces’ it doesn’t happen by accident, or competing openly with legacy players, even if the form of commpetiition is neutered by only targeting “free-stuff” on a kind of honor-system basis. – It happens by ‘moving to uncontested ground’…. ‘targeting non-consumers’ and by developing ‘new architectures’, not new buttons, and hoping that will, it will cause a moral movement, that will (Moses-like) part the Red-Sea of Congress.

  13. bowerbird’s avatar

    we’re evidently talking past each other,
    simon, as i can’t fathom your objections
    (and believe that if there is anything of
    substance, you could say it much better),
    _or_ see whatever _your_ vision might be
    (other than a super rosy glow around p2p,
    which i likely share with you in large part,
    but don’t see where you’re going with it),
    so i’m just gonna let doc deal with you…
    or not…

    -bowerbird

  14. Simon Edhouse’s avatar

    My objections are, that Doc has a highly public-platform to promote innovation, but from my point of view, he has set the bar very low, and the metrics for success are indistinct and vague.

    There is a lot more to the P2P-Meme than Napster-esque Piracy… [see the expansive work of Michel Bauwens at: http://blog.p2pfoundation.net/ ]

    However, Michel’s work, much as I greatly admire him, is on the theoretical side of the study of the P2P-Meme, and he is absolutely prodigious… a massive resource. – I am not cut from the same cloth… I have a practical focus, but I’m hardly likely to spill my I.P. out here in a public forum.

    I am just doing what I can to stir people up… promote vigorous intellectiual debate, challenge dogmas and preconceptions etc etc… If someone wants to seriously engage me on practical plans, I am all ears.

  15. Doc Searls’s avatar

    Simon,

    This has been a long thread, and we’ve failed to convince each other of a damn thing.

    Let’s move on.

  16. bowerbird’s avatar

    simon! simon! simon!

    you have been a _huge_ waste of time!

    and then you say this?
    > I’m hardly likely to spill my
    > I.P. out here in a public forum.

    your “i.p.”? my goodness gracious! you
    are looking for a way to get yourself paid?

    i am trying to get _everyone_ paid!
    and shatter the notion of “property”
    in the process. no wonder that we’ve
    been totally unable to communicate…

    > I am just doing what I can
    > to stir people up…

    sorry, you haven’t done that here.

    > promote vigorous intellectiual debate

    you can’t even _spell_ “intellectual.”

    and vigor? this interaction was _limp_…

    > challenge dogmas and preconceptions

    nope and nope.

    > etc etc…

    and nope and nope again.

    > If someone wants to seriously engage
    > me on practical plans, I am all ears.

    well, for someone who is “all ears”, you
    certainly don’t seem to be able to listen.

    and when i ask for _your_ vision, you
    clam up, the better to guard your “i.p.”.

    so i’m not really sure why you showed up,
    simon, not sure why you showed up at all.

    because you know what they say:
    lead, follow, or get out of the way.

    -bowerbird

  17. Simon Edhouse’s avatar

    Bowerbird…

    Doc suggested we close the thread… But you have decided to taint the discussion with bitchiness… and now have become down right insulting.

    I typed that post quickly at about 7.15 am before dropping my kids to school… It was a typo, because I was rushing… Of course I can spell ‘intellectual’…

    I.P. is ‘Intellectual Property’… as I am sure you know. My motivations are not based on greed, but rather to try and protect ideas that have had years of work (by a number of people) put into them, that others may immitate, plunder and execute badly.

    My I.P. is about empowering ordinary people at the edges of the internet to gain power over centralized corporate forces… but am I a bleeding-heart nihilistic completely non-commercial person? Of course not… I have two children to put through school and college and to feed and look after and other loved ones to support. – So, do I want to earn some income from my hard work, and support others who work with me to do the same? Yes…

    At least I have the courage to say who I am, and to write openly and concisely about my ideas and principles, and put them on the public record, for all to see… and not hide behind a pseudonym.

    Who are you mate?

    Besides an invisible coward who hides behind a fake name, and a link to: http://worthapenny.com with it’s 34 words of fanciful utopian dribble

  18. Crosbie Fitch’s avatar

    Yo, Simon! :)

    In a parallel universe Bowerbird is substituted by someone such as myself, someone without a pseudonym, and a site called 1p2U (as in ’1 penny to you’). This is a site to permit a blogger’s readers to pay them to blog, at the rate of a penny per article.

    It utilises a web service called The Contingency Market, that is to enable people to make monetary exchanges contingent upon the outcome of dependent future events, e.g. the publication of intellectual works.

    Given neither of these are yet operational, my words can also be written off as utopian drivel, but heck, it’s good to dream eh?

  19. bowerbird’s avatar

    bowerbird is not a “fake” name, simon.

    it’s my poetry name, and i have been
    interacting exclusively with that name
    since i got on the web back in 1996…
    (under poetry, i’ve used it since 1987.)

    so i would suppose you would say that
    robert zimmerman was “hiding behind”
    the “fake name” of bob dylan, right?

    or that samuel langhorne clemens was
    also just “an invisible coward” who was
    “hiding behind” his mark twain moniker.

    or perhaps eric arthur blair was afraid of
    “big brother” for real, and that’s why he
    wrote as george orwell?

    do you know any more about those
    3 people knowing their “real” names?

    conversely, would your own message
    be any less obtuse, simon, if i were to
    dub you “bitter gobbledygook idiot”?

    as for my “fanciful utopian dribble”,
    exactly what part of “i don’t give a
    flying fuck if you ‘take me seriously’”
    did you fail to understand, simon?

    -bowerbird

  20. bowerbird’s avatar

    wow. simon is going ballistic on twitter.
    slimy. i feel like i need to take a shower.

    -bowerbird

  21. Simon Edhouse’s avatar

    Bowerbird…

    You are comparing yourself to Mark Twain and Bob Dylan? I won’t even comment on that…

    ‘Bowerbird’ is, as Pseudonym… commenting here without using your real name is tantamount to being a ‘Troll’ ….pure and simple

    Here’s an article by Kathryn Darden on:
    Using Avatars & Pseudonyms – License for Rude Behavior?
    http://tinyurl.com/cnyy7t

    This is exactly the pattern you have followed… using a Pseudonym to come here and say whatever your like, with as little accountability as possible.

  22. bowerbird’s avatar

    people all over the world know me as
    bowerbird, dude. i’m fully accountable.
    and my style is unmistakably mine alone.
    i’d be hiding if i used some other name…

    -bowerbird

  23. TheoffScore’s avatar

    Having fun with my Ipad. It’s the bomb. One problem is that the navigation buttons are flaky. Perhaps I have a setting wrong?

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