Category: Because Effect

Of sacred cows and barbecues

I’ve maintained for years that the core of my understanding of opensource came not from Richard Stallman or Eric Raymond but Jerry Garcia, that my understanding of open markets and democratised innovation came not from Yochai Benkler or Eric von Hippel but Jerry Garcia and his cronies. It goes beyond pure opensource, I think my understanding of the Because Effect was also stimulated by Garcia and by the Grateful Dead. Their commitment to live performances, the very concept of taping rows, the sheer size of the bootleg market for Dead recordings, all these bear powerful witness to my thesis. In fact, trivial as it may sound, my collection of over 50 Jerry Garcia ties is probably another simple example of the Because Effect. [If you want to know more about the Dead’s taping rows, you could do worse than start with this book.]

Bearing all that in mind, I was sure to take delight in this poster:

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My thanks to Paul Downey for the poster. You should really go to his flickr site and view the poster there, tags and all. Tag by tag.

I spent quite a while gently navigating the poster, viewing the tags that came up, occasionally doing myself an injury as I sought to harrumph away my laughter and continue sipping my green tea. There’s probably something there, within the intricacy of the poster, to raise an objection from pretty much every person who reads this post. I’ve rarely seen such an open barbecuing of sacred cows. Delightful, helps me remember not to believe in my own propaganda.

I also love the tagline.

The Web is agreement.

My thanks again to Paul.

Which have eyes, and see not: Musings about the music industry and The Because Effect

which have eyes, and see not; which have ears, and hear not:

Jeremiah 5:21, KJV 

Madonna is reported to be leaving Warner Music and moving to Live Nation.

This, at a time when, as the AP report states:

Regulatory filings show that Ticketmaster’s revenues jumped 14 percent to $1.1 billion in 2006 and generated almost a 25 percent operating profit margin for the nation’s largest seller of tickets

This, in a week when Radiohead released their latest album In Rainbows as a digital download, with the price of the download left up to the buyer. As Wikipedia puts it:

While the discbox, which includes the MP3 download, is priced at £40 (about $80 U.S.), the price of download by itself is left up to the buyer. Upon purchase, the buyer is prompted to type their desired price, plus a credit card transaction fee of 45 pence if purchased for more than £0.00. [15]

The unique nature of the album’s availability has put doubt on whether the album will be eligible for inclusion in the UK album charts.[16] According to Gigwise the album has ‘sold’ 1.2 million copies from the website, as of 12th October 2007, with the average price people paid expected to be £4.[17]

This, in a month when a Led Zeppelin reunion concert attracts 20 million fans in a mad scramble for tickets, and crashes the internet service provider used to run the concert ticket lottery:

A spokesperson for the gig told Guardian Unlimited Music that mid-way through yesterday’s press conference to announce the one-off gig at London’s 02 Arena in November, at the precise point where promoter Harvey Goldsmith confirmed details of the show, ISP Pipex reported to organisers that their network had collapsed.

This, in a period when Prince gave away his latest album for free, as a newspaper insert, before the actual release of the album:

On June 28, 2007, the UK national newspaper The Mail on Sunday revealed that it had made a deal to give Prince’s new album, Planet Earth, away for free with an “imminent” edition of the paper, making it the first place in the world to get the album. The date chosen was July 15, 2007. This move has sparked controversy among music distributors and has also led the UK arm of Prince’s distributor, Sony BMG, to withdraw from distributing the album in UK stores. [27] The UK’s largest high street music retailer, HMV decided to stock the paper on release day due to the giveaway.

Okay, he got paid by the newspaper for giving the album away. But that’s not the point.

The point is that he sold out all his concert tickets. For 21 concerts. In a single tour. In record time:

On June, 13 2007 Prince announced a further six nights at The O2 arena, Europe’s ultimate entertainment destination that opens on 24th June. Prince is now performing ALL 21 dates at The O2, after his last 15 concerts SOLD OUT in a matter of hours. The shows eclipse all previous arena attendance records and will see Prince perform his greatest hits for the last time ever.

David Campbell, President & CEO of AEG Europe, commented: “Prince’s 21 nights at The O2 are a testament to London’s eagerly awaited new entertainment destination. We’re thrilled that a world-class artist like Prince is part of our opening season, and that he’ll be breaking a world record in our arena.”

Promoter Rob Hallett of AEG Live said, “It is extraordinary that any artiste can sell out so many nights in London, the previous record was 14, but to sell this quickly and in August is quite remarkable! However with Prince we are talking about a phenomenal artiste who has spent his whole career raising the bar so we shouldn’t be too surprised. I can see this record outliving the century!”

Madonna. Radiohead. Led Zeppelin. Prince. They understand the intrinsic abundance of digital music and the intrinsic scarcity of live performances. They understand what’s broken and what needs fixing. They understand The Because Effect as originally expounded by Doc Searls.

Looks like Live Nation understand this as well:

Live Nation Chief Executive Michael Rapino has made no secret of his desire to use the company’s relationships with artists to get into related businesses. He has talked about selling T-shirts, parking passes, VIP party passes, secondary tickets and DVDs as well as broadcasting shows live. And gaining direct access to fans through ticket sales is seen as a crucial building block to collecting other profit related to the event.

Rapino said Live Nation owes its window of opportunity to the rise of the live show as a profit driver — instead of the records and CD sales as in previous years. “Thankfully for our business, the center of that pie has really become the live show now,” he said in September at a Goldman Sachs conference.

What can I say?

……Please heed the call
Don’t stand in the doorway
Don’t block up the hall
For he that gets hurt
Will be he who has stalled
There’s a battle outside
And it is ragin’
It’ll soon shake your windows
And rattle your walls
For the times they are a-changin’.

 Bob Dylan, The Times They Are A-Changin’

Random musings on opensource

As you would expect, I spent a lot of time with my wife and children over the Easter break. And then stayed up to watch the golf. When I wasn’t doing either of these things, I was catching up on my reading.

Dan Farber’s True Nature Of Open Source post got me thinking. Go take a look yourself, Between The Lines is a place I visit regularly; in fact I read most of the ZDNet bloggers pretty often.

Dan ends with the following:

Economics don’t favor pure open source. The future is hybrids–cars, software, people, pets. It’s better for the planet…

And that’s what set me thinking. As usual, I’m sharing that thinking with you, in the knowledge it is provisional and only-partially-formed. For the sake of brevity I’m making this a bullet-point list. [Yes even I can be brief sometimes!]

1. Economics can favour opensource. Commodity economics, based on scarcity, does not. But gift economics, based on abundance, can and does favour opensource. There’s a lot we have to learn about the economics of abundance. It is at the heart of Doc Searls’ Because Effect; it connects Stallman and Raymond and Torvalds to Brand and even Garcia.

2. Gift economics relies, to quite an extent, on delayed gratification. The same delayed gratification that is at the heart of Daniel Goleman‘s Emotional Intelligence work. The same human capacity that engenders the perseverance that characterises so much of innovation, of invention. For that matter, the same human capacity that allows people to have faith.

3. The willingness to accept delayed gratification (besides being central to Goleman’s themes) is critical to building community, to engendering teamwork and collaboration. Communities are defined by their shared purposes, their treasures in heaven. They evolve and grow despite their differences, held together by their common goals. I would go so far as to say they evolve and grow because of their differences, they learn more from the differences than from the similarities. But they stick together because of their shared vision.

4. Teamwork and collaboration are essential for the success of any 21st century organisation. Collaboration within the enterprise, collaboration across the supply chain, collaboration across the customer chain. Collaboration with the customer.

5. Opensource connects the customer with the coder in different and powerful ways. Transparency of demand and supply. The impact of Linus’s Law. True future-proofing. The wisdom of crowds. Evolution of software as a result of natural selection, driven by open market adoption rather than the slave trade of vendor-locks. [If you think about it, vendor-locks are really a form of slavery].

So for me there is a golden thread that links opensource with abundance with delayed gratification with collaboration and teamwork all the way to co-creation of value with the customer. All economically sound, just not scarcity-economy sound.

What Dan says about opensource is true, but we must understand why before we can make the right calls. I will post separately about the inevitability of hybrids.

Look what they’ve done to my song, ma

[With thanks to Ms Safka, and to Malcolm for alerting me to this story via his post here.]

[An aside: Would you believe Melanie turned 60 earlier this week? Happy belated birthday.]

In a HotNews post earlier today, Steve Jobs opened up (pun intended) with his views on DRM. Well worth a read. For me, the most telling quote was this:

Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven’t worked, and may never work, to halt music piracy. Though the big four music companies require that all their music sold online be protected with DRMs, these same music companies continue to sell billions of CDs a year which contain completely unprotected music. That’s right! No DRM system was ever developed for the CD, so all the music distributed on CDs can be easily uploaded to the Internet, then (illegally) downloaded and played on any computer or player.

I am aware that there have been attempts to develop DRM systems for CDs, as discussed here. But they were (thankfully!) catastrophic failures.

This whole DRM thing, when put in the context of what Steve says, now reminds me of something else tangentially Apple-related.
Soon after iPods came out, we had this flurry of activity from some information security professionals saying things like “iPods should be banned from trading floors”. My natural counter at the time was “OK, provided we check every person in and out of the building, look into their briefcases or whatever passed for briefcases, scan and analyse their cellphones and PDAs, and so on.”

I likened it then to being asked to shut the attic window while the front door was not just wide open but barn-sized. I would not ban the iPods unless they “shut the barn door”.

And I guess that’s the way DRM now feels in the context of music. Shutting attic windows while barn doors  flap forlornly open.
Critics of Jobs may argue that CD sales are eroding fast and being replaced by digital downloads, and that stopping the illegal reproduction of digital tracks was therefore imperative. My answer?  No cigar. Not even close.

The damage done by poorly implemented DRM is damage that is being done to all and sundry. Damage that affects everyday people carrying out everyday activities. Damage that affects business and leisure, creativity and pleasure. Damage that extends way beyond music. Legitimate software doesn’t run. Legitimate subscribers can’t get access to digital things they’ve paid for. There are too many examples for me to continue to cite them here.

It’s been no secret that the drive for DRM has come from “content owners”. Even Bill Gates, someone who doesn’t automatically conjure up images of being the Godfather of Open, said so here a couple of months ago.

Take a look at Steve’s penultimate paragraph:

If anything, the technical expertise and overhead required to create, operate and update a DRM system has limited the number of participants selling DRM protected music. If such requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies.

It’s a classic Because Effect situation. We have numerous examples of publishers saying they’ve sold more books once they opened up to Google Search or Amazon Look Inside This Book or similar; numerous examples of musicians and bands being successful selling DRM-free downloads; I could go on but won’t.

The whole concept of an e-book failed, as far as I am concerned, for three reasons:

  • The hardware was too heavy.
  • The process was too unwieldy.
  • Reading a book was no longer a pleasure.

We appear to live in very strange times. Times when people in the hardware, software, media and entertainment industries spend enormous sums of money on making their products and services more “user-friendly”, more user-centred, simpler to use, more convenient. They know all the buzzphrases, so do their consultants. And vast sums get spent.

And then what do they do? They put poorly thought out DRM all over the place. Go figure.

Folks, this is not sustainable. We need new ways of paying for creative value. So go read Terry Fisher, go watch Larry Lessig, go surf Cory Doctorow, go pore over Rishab Aiyer Ghosh, go study the opensource movement. Go write to your local DJ. Go burn a disk.
Go do something.

Because the walls are coming down. They’re coming down.

One million dollars and counting

How often do you visit Wikipedia? If you’re like me, you probably go there three or four times a day. In which case you’ve probably noticed the “thermometer bar” at the top of the page for the last month or so.

The Wikimedia Foundation ran its recent month-long fundraiser from 16 December 2006 to 15 January 2007; in typical open-and-transparent fashion they’ve now released a report on the fundraiser, and in Web 2.0 time as well. It’s definitely worth a read, you can find the entire report via this link. My thanks to Chris Locke for pointing me at it.

One million dollars in one month. Without counting the matching contributions.

  • Donations primarily between $10 and $50
  • Average donation appears to be around $30
  • Around a thousand donations a day

When it comes to building out infrastructure on a commons basis, we may need to look at approaches like this. I know that raising a million dollars in a month doesn’t sound like much….. when you take into account the global nature of the donations (albeit US-dominated, much like the early internet), the relatively low-key campaign, the purpose for which the campaign was run, the level of anonymity, and the absence of matching contributions in the figures, a million dollars isn’t too shabby.

I think we’re heading towards a time when many infrastructural projects are funded from four sources:

  • A seed from individual subscriptions, much like the campaign above
  • Matched funding from more affluent individuals
  • Another level of matching from the public purse, multi-government, multi-location
  • A final level of matching from truly global large corporates