Tooth-fairy economics

The discussion of Open Content I joined last week has continued. In an articulate polemic Laura Quinn of Idealware lambastes what she calls the "tooth-fairy" idealism those who maintain that all content in the non-profit sector ought to be free. I think we as a community also need to consider possible negative impacts of advocating that all content ought to be open. It’s already very difficult to pay for the effort of creating great content. If in addition we promote in people’s mind the idea that all content ought to be free, it’s hard to escape promoting the idea that no content is worth paying for. Which puts us in danger of tipping an environment in which it’s very difficult to support good content into one in which it’s downright impossible. Let me emphasize one phrase of Laura's: It’s hard to escape promoting the idea that no content is worth paying for. In a sense it boils down to the value of content. No one is advocating that all staff of non-profits work for free, for example. A person's time has value! What one is willing to pay for something reflects the value one places on it. David Geilhufe comes out and posits this directly, in a posting in his Social Source blog. He writes: Content is no longer a value generator... it is a consumer capturer. You need to capture the consumer with your free content and then extract value through alternate channels... ads, products, services, memberships, etc. I've always thought the word content itself leads us in this direction. Content is just so much stuff - as in "We need a stream of content for our website." Contents may settle during shipping. When it is seen as content, it's just something you can buy by the pound. I'd like us to throw the word out! Content economics places sharp limits on what kind of media will be created, since it makes it difficult to pay for creating media that might take weeks or months to prepare. And it eliminates, for the creator, the ability to take advantage of the economies of reselling their work to finance additional creation. This devaluation of text and media will lead inevitably to a paucity of high quality materials. And keeps the non-profit world in charity mode, supplied by creators who do not need to earn a living. Laura's comments are important because her project has tried to create just this sort of serious media - pieces of work that are not created in in just a few days. Pieces of work that are of direct value in themselves. Laura is not creating media, as David suggests one ought, to lure you into her site. The media here IS the service. So how do we propose to pay for it? Image uploaded as http://www.flickr.com/photos/mikebabcock/58508023/

Open Source Economics

At a session on Web2.0 at last week's NTC conference in Washington, a woman took the microphone to comment on a conundrum her non-profit is facing. About 40% of her organization's revenue comes from the sale of educational video's in the K-12 market. They suspected they could significantly increase their visability by posting content for free on the internet - but this would destroy their sustainability. How can they take advantage of these new web-based distribution tools without going broke? It's the same problem the record labels are facing. New distribution technology is forcing new business models. Independent Software Vendors (ISV's) have been wrestling with this for years, as the success of the Open Source movement places a downward pressure on the value of software. While the Free and Open Source community has always stressed that Free in the FOSS context is "Free as in Free Speech, not Free as in Free Beer", the reality is that much open source software is available at no cost. To adopt or compete with this model, independent developers who must generate revenue to meet payroll have created new business models. Some vendors, such as MySQL, have a split model - a free license and a commercial license, for example. Others, such as Red Hat, expect to make their money from implementation and support services. But generating enough cash to amortize software development this way is a challenge. A few years back,Steven J. Vaughan-Nichols wrote a piece in eweek called Going Broke with Free Software that documented the stress the developers of open-source software were under to produce revenue, and he interviewed several who had taken positions in proprietary firms like Microsoft to pay the the bills. Just yesterday, I spotted this programmer's blog post about why he has opted NOT to provide his work as Open-Source. Vaughan-Nichols concludes Yes, you can pay nothing for most open-source software, but if you want to see the next and better version of it, you'd better start paying something for it. This week, Michelle Murraine in her blog takes non-profit pundit Michael Gilbert to task for charging for his new journal, Journal of Information Technology in Social Change. Michelle also publishes Michael's response, where he cites the necessity of raising revenue to sustain publication. Since Free and Open Source groceries and housing don't seem to be on the horizon, I think this tension between free distribution and the need to sustain organizations will be with us for while. image posted as http://www.flickr.com/photos/loneprimate/451169287/