Increasing your value as a product: open source and open content business models Jessica Coates Project Manager, Creative Commons Clinic Queensland University of Technology September 2008 AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J

Disclaimers I am not an economist I am not an open source expert AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J

I am not an economist

I am not an open source expert

Paying for Open Myth – if you release your material under an open access licence you can never earn money for it People used to say the same thing about anything released on the internet. AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J

Myth – if you release your material under an open access licence you can never earn money for it

People used to say the same thing about anything released on the internet.

Paying for Open free as in speech, not as in beer business models are developing AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J

free as in speech, not as in beer

business models are developing

About 20 years old Open Source (software) AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J Always operated in business world About 10 years old Open Content (music, text, images, video) Started with amateur and gift cultures Main customers = private individuals Economics focuses on compensation for existing product Main customers = commercial businesses Economics focuses on funding software production

About 20 years old

Volunteers – amateurs, those with other jobs Open Source Contributors AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J Government – public servants developing software eg Brazil, Australia Researchers with grants Specialist OS companies – eg RedHat, Sun Companies using OS – eg HP, IBM, eBAY Volunteers – amateurs, those with other jobs Open Content Contributors Government – public broadcasters, libraries, museums eg BBC, ABC, Powerhouse Museum Researchers with grants Professional Artists – Nine Inch Nails, Knives at Noon Artists using SA material – eg ccMixter

Volunteers – amateurs, those with other jobs

Traditional model = mass market High cost to make and buy Need mass audience to compensate for many failures Software Businesses AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J OS – focuses on providing many products tailored to only a few businesses Main difference between traditional model and OS = adaptability Content Businesses OC – focuses on ‘long tail’ ie many performers selling to only a few fans Main difference between traditional model and OC = distribution Traditional model = mass market High cost to make and buy Need mass audience to compensate for many failures

Traditional model =

mass market

High cost to make and buy

Need mass audience to compensate for many failures

Traditional model =

mass market

High cost to make and buy

Need mass audience to compensate for many failures

Non-Commercial – is it a big difference? Almost all OS products allow commercial use; most OC products limited to non-commercial use Both still giving away ‘free’ to main customers – for OS this is businesses; for OC this is private individuals Redhat, Sun, Novell etc have premium ‘enterprise’ models – charge higher for ‘business’ level support, warranties etc. Commercial for OC = ‘premium product’ For OC, less incentive to pay for follow up services/quality, so instead charge for more rights AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J

Almost all OS products allow commercial use; most OC products limited to non-commercial use

Both still giving away ‘free’ to main customers – for OS this is businesses; for OC this is private individuals

Redhat, Sun, Novell etc have premium ‘enterprise’ models – charge higher for ‘business’ level support, warranties etc.

Commercial for OC = ‘premium product’

For OC, less incentive to pay for follow up services/quality, so instead charge for more rights

Sell yourself, not your product The question to ask is, "What portion of the world knows my brand?" - Jonathon Schwartz, COO Sun Microsystems (CNET, Aug 2007) Creative Commons is like having 100,000 free publicity officers. - Pete Foley, Black brow ( http:// wiki.creativecommons.org/Black_brow ) My fans' tireless evangelism for my work doesn't just sell books - it sells me . Cory Doctorow, author (Forbes, Jan 2006) AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J

The question to ask is, "What portion of the world knows my brand?"

- Jonathon Schwartz, COO Sun Microsystems (CNET, Aug 2007)

Creative Commons is like having 100,000 free publicity officers.

- Pete Foley, Black brow ( http:// wiki.creativecommons.org/Black_brow )

My fans' tireless evangelism for my work doesn't just sell books - it sells me .

Cory Doctorow, author (Forbes, Jan 2006)

Payment Can be: direct eg purchase, advertising in-direct eg increased traffic, hyperdistribution AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J Can be provided for: product eg book ‘ added value’ eg searchability aftermarket service eg maintenance publicity eg ads Can be provided by: consumers eg pay-per-use producers eg vanity press third parties eg advertisers

Can be:

direct eg purchase, advertising

in-direct eg increased traffic, hyperdistribution

Can be provided for:

product eg book

‘ added value’ eg searchability

aftermarket service eg maintenance

publicity eg ads

Can be provided by:

consumers eg pay-per-use

producers eg vanity press

third parties eg advertisers

Promotional tool AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J

Cory Doctorow Books published by Tor Books as both hardcopy and e-books under Creative Commons BY-NC-SA licence First book had 30,000 downloads in first day Last book, Little Brother , on NY Times best seller list for 4 weeks Hundreds of derivative works – translations, audio-books, covers, software projects AUSTRALIA part of the Creative Commons international initiative “ The Internet not only sells more books for me, it also gives me more opportunities to earn my keep through writing-related activities.”

Books published by Tor Books as both hardcopy and e-books under Creative Commons BY-NC-SA licence

First book had 30,000 downloads in first day

Last book, Little Brother , on NY Times best seller list for 4 weeks

Hundreds of derivative works – translations, audio-books, covers, software projects

Advertising supported AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J

Revver Video sharing site with embedded advertising – money split 50/50 with creators All videos under Creative Commons BY-NC-ND licence – to allow for maximum distribution Success story – Eepybird.com’s “Extreme diet coke and mentos experiment” - watched over 6 million times; made US$30,000 in first year Now hosting other popular video series, previews etc - eg Lonelygirl15, “ask a ninja” AUSTRALIA part of the Creative Commons international initiative

Video sharing site with embedded advertising – money split 50/50 with creators

All videos under Creative Commons BY-NC-ND licence – to allow for maximum distribution

Success story – Eepybird.com’s “Extreme diet coke and mentos experiment” - watched over 6 million times; made US$30,000 in first year

Now hosting other popular video series, previews etc - eg Lonelygirl15, “ask a ninja”

Charging for premium service AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J +

Beatpick ‘ Fairplay’ music label All music downloadable DRM free under Creative Commons BY-NC-SA licence Sells ‘high quality’ downloads Negotiates ‘commercial’ licences Success story – “Memories Child” by Jamison Young (Australian musician) licensed for “The X-Files: I Want to Believe“ feature film Has also licensed material for ads, video games, corporate events, political campaigns AUSTRALIA part of the Creative Commons international initiative

‘ Fairplay’ music label

All music downloadable DRM free under Creative Commons BY-NC-SA licence

Sells ‘high quality’ downloads

Negotiates ‘commercial’ licences

Success story – “Memories Child” by Jamison Young (Australian musician) licensed for “The X-Files: I Want to Believe“ feature film

Has also licensed material for ads, video games, corporate events, political campaigns

Thanks http:// www.creativecommons.org http:// www.creativecommons.org.au [email_address] AUSTRALIA part of the Creative Commons international initiative CRICOS No. 00213J This slide show is licensed under a Creative Commons Attribution 2.5 Australia licence. For more information see http://creativecommons.org/licenses/by/2.5/au/ .

http:// www.creativecommons.org

http:// www.creativecommons.org.au

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