rely on community contributed content supports user-end tagging or labeling encourages promotion of music on Last.fm IP controls permit the owners of the content 30-second previews, free of charge up to three times artists are paid each time the track is played, and may choose their music rights. Monthly fee July 2007, it was announced that Last.fm had also signed a deal with the Sony BMG record label. The partnership will give the service's users access to the entire Sony BMG catalog of music.
How to attract the participation of a broad community of contributors, how to sustain their participation over time Open-oriented projects must compete for contributors How the open invention or coordination project is led, how its agenda evolves. How can a company engage in an open source community and still profit from that technology,how should they capture the value created?
Open Innovation (O.I.) challanges the need to have ownership over the resources that are creating value.
E.g. MySpace, YouTube and Linux have relied foremost on external volunteer contributors.
O.I. does not rely on the ability to exclude others from copying the product
In the case of MySpace and YouTube ownership of the posted content is central to their valuations but the users can access the sites abd view the content witout a charge.
Linux and Wikipedia relies on its user base to continually refine the product
Value Creation & Capture in the context of Openness
Knowledge Creation through Open Invention
The power of openness in terms of value creation resets largely with the inheret characteristic of knowledge-it can be reused and can lead to increasing returns
Both the breath and dept of the pooled knowledge can outstrip the knowledge endowement of an individual contributor
Without direct monetary compensation, a vast number of resources have been committed to open innovation (e.g. development of Linux)
Ecosystem Creation through Open Coordination
In addition to O.I., open coordination has led to consensus building around issues such as technology standards that have permitted whole business ecosystems to flourish.
A business ecosystem represents the interplay between multiple industries, so a decision to open up a segment of one industry can have widespread reverberations. (e.g. applications software vendors, internet service providers, video content developers, etc)
A healthy ecosystem can further perpetuate the adoption of the open architecture through network effects, where the value of the user network is heightened with each additional adopter