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Apr 23, 2008

‘When Information Is Free, What’s the Business Plan?’

We met David Bollier of On The Commons at the recent Economies of the Commons conference in Amsterdam. Now David has this to say concerning our plans for VODO:

What happens when video, music and information can be distributed for free, or nearly so? Well, we’re about to find out—and many of our largest, most capitalized institutions are going to feel the repercussions. Many barriers that once kept information artificially scarce—things like copyright law, digital rights management, and limited bandwidth and computing power—are under siege, if not collapsing. Some people are predicting that copyrighted works will experience a “Bear Stearns moment” in the future, when prices of copyrighted works plummet. An IP bubble, as it were.

Which leaves us with the question…. so how will creativity and information be financed in such an environment? The world can’t survive on the amateur talent of bloggers and remix artists [...]

VODO… stands for “voluntary donations.” The idea is to put unique digital fingerprints on video and other content distributed on BitTorrent and other peer-to-peer file-sharing networks. This will enable a work to be reliably connected to the creator, despite the free and unrestricted sharing of the work on the Internet. VODO would enable appreciative fans to send donations in an easy, frictionless way to creators—more conveniently than PayPal, for example. It would begin to help finance a new commons-based sector of production.

But would people actually donate? King said that Steal This Film—without any VODO system—received donations of about 0.1 percent (1 in 1,000 viewers) in the first two months after its release. Donations were mostly in the $15 to $40 range. When the band Radiohead released its album under a “pay what you want” scheme, about 30% of downloaders voluntarily paid some amount—enough to exceed the revenues the band would have received through a traditional record label deal. King hopes that VODO will result in donations of 10%. To help boost the viral effectiveness of the scheme, third party websites that implement VODO would get a small cut of the transaction.

Mind you, VODO is still an idea, not a functioning system. But it is an intriguing model for financing the commons, or augmenting the vitality of already functioning commons.

We hurry to say that our fingerprinting scheme is in very early days and that we won’t be able to really know how well it will function until we have a big database of works to play with.


  • peer to peer computing…

    Maybe, but I’m not sure it’for everyone….

  • neat post.

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