Drake IP 2013: Nic Suzor, Crowdfunding the Commons

At the Drake IP Roundtable 2013, I presented about my current research, looking at examples of collective action in free and open cultural production across the creative industries (see more detail). Slides available here.

I noted that consortia-based open access are examples of ‘peaceful revolutions’ (Suber) that challenge the assumptions of copyright law. These models challenge the assumption that users are free riders. To the extent that copyright is based on efficiency, these models also present a challenge for the exclusivity of copyright. Importantly, we don’t know the extent to which these models scale, and we don’t know how they work.

I spoke about a number of examples:

I argued that it is now time to try to aggregate all of these examples within a common framework, and that Ostrom’s IAD framework is useful in this regard. This is heavily informed by Madison, Frischmann, and Strandburg’s paper, and is the subject of my ongoing work.

Comments on my presentation (Some responses by Jon, fellow panelist):

Q: Are you suggesting a single platform for distribution or a model for multiple competing platforms? And if you are, how do you deal with the failure of crowdsourcing that has been written about re kickstarter? Also, can you both elaborate on the advantages of the platform for artists and how those benefits are different from those for consumers?

Nic: I don’t see that centralized models work better than decentralised models, but I am agnostic about that, I’m more interested in the process. Re risk – one of the interesting things about creative production is it is inherently risky. That is why in the traditional model, the intermediaries bore the risk so it made sense they also got much of the benefit. What is interesting about crowdfunding is that it provides a cheap way to test the market and to fail – it lowers the barriers. We will always see failures. But the failure rate of platforms like kickstarter is not something to worried about. Just because there are failures doesn’t mean that the model doesn’t work. E.g. Bjork’s failure is an example of when a producer does not have a market for the product she is willing to offer – but much cheaper way to fail than if she had invested a few million of her own money

Jon: I agree essentially with what Nic said. The failure rate is not necessarily different in crowd funding than across traditional media. In traditional models, the few “hits” fund the other products. In my model, the cross collaterising means that one failure doesn’t topple the whole model. The reason my product is centralized is that there is a commercial side to this so that there is a “go to” place for the project. Consumer transaction costs – so people can go to one place and find everything they want. The third question re benefits – I’ve spent more time on artists side. Audience has/will benefit b/c currently intermediaries are bleeding of much of the costs and if we lower costs then prices lower. The other thing is being responsive to what audiences want.

Nic: I’m interested in what else this enables in terms of consumer benefits from funding things in advance. For things funded in advance, the utilitarian justification for copyright drops away. So open access is a good way to address that.

Q: For Jon – Crowdfunding model that currently exists is kickstarter, but by the end of this year there might be a viable “equity model” which might open up more options for you. For Nic – when you were talking about relationships, might also want to explore that some campaigns are offering social benefits e.g. part of the money goes to a particular cause – and that seems to be a gravitational force for people to attract them to contribute.

Nic: That is a great point. [Discussed indie humble bundle model – which donates 10% to charity]. I’m interested to see if and why people are more likely to pledge to products that support charities and why they don’t just give to charities. [More controversial example = crowdfunded medical procedure for developing countries]

Jon: The model I’m talking about uses crowd funding as proof of concept, not necessarily as final funding source. (EG is Veronica Mars)

Q: re social norms – reminded me of work from Dan Ariely at Duke – studied how framing a situation as a market setting or a social setting changes norms. Seems like you are talking about changing the farming of things traditionally as a market setting more to a social setting. Also seems like this shift emphasises more the importance of established reputation – does that crowd out other less known but still valuable artists?

Nic: In these projects what changes is the locus of power – whether projects can be found online in some ways predicts the success. But in one sense these models don’t really change how things have always been done – you still needed reputation manufactured through publicity from your intermediary. So you are right that building an audience is tough, but it has always been tough. It’s just that the dynamics are changing.

Greg: I emailed you an article about predatory oa – reaction? Are you including open source software in your analysis and if so, how does that impact? Even if not looking at software, might be good to look at Benkler’s theory in addition to Ostrom’s

Nic: One of the limitations with private collective action models – e.g with gold oa – no mechanism for assessing value for money (e.g. gold open access says it costs x to publish but no proof, so risk of over compensation to publishers) – benefits of models like Scoap3 is that it address those limits by using tender process.

FOSS – one of the motivations that leads me to Ostrom is that we usually talk about FOSS and Wikipedia but there is no evidence that the models that work there will extend beyond software that is very specific. So I am definitely interested in FOSS but I’m interested in how models scale across different artforms etc and I think Ostrom’s model works best.