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Rather than advertising, the niche I'm focusing on is facilitating bargains between artist and audience, given these two parties seem most interested in an exchange of art for money.

I started thinking along these lines when wondering how on earth one could enable members of the public to sell 3D art in a virtual world if it was completely decentralised (lawless wild-west):
http://www.gamasutra.com/php-bin/article_display.php?category=14

I then proposed an auction mechanism whereby an audience could haggle with an artist and all arrive at an agreeable price (that all successful bidders would pay), sooner or later.
http://www.digitalartauction.com/

I then decided something simpler would be better: http://www.quidmusic.com/

Convinced I was on the right track, but not convinced I was best placed to take quidmusic forward, I decided to create an engine that would support all manner of sites that needed to enable trading between artist and audience, i.e. http://www.contingencymarket.com/ . This, being commission free, would then enable anyone to use it in support of their own site.

I'm now working on an even simpler site than quidmusic: 1p2u.com . It's in very early stages of development, but this will test/debug/demonstrate the contingencymarket. I'll then use it to replace the engine in quidmusic, and finally implement digitalartauction, and others.

See The Digital Art Auction, which describes such an auction. It focusses upon the case of an unlimited number of seats, but can just as easily be used for a finite ticket count.

An honour based deal tends to require a relationship. Diffused copies involve no such relationship; there isn't anyone from whom any such diffused copies may be purchased, nor in fact any need. Copy diffusion is a consequential benefit of the Internet.

The only person with whom a relationship is necessary is the artist, and that is between them and each member of their audience who would see them produce more.

The Internet enables this relationship, and consequently, with the necessary facility, enables honour based deals.

This is why I'm working on the http://www.contingencymarket.com/, so that it can enable sites like http://www.digitalartauction.com/.

It should soon be possible for a digital artist to sell their work just as it is for any traditional craftsman to do so - without needing the traditional publishers' agreement aka copyright.

There is a bounty system already: The Digital Art Auction.

This is an ideal job for The Digital Art Auction!
It's designed precisely for this purpose, i.e. enabling a large audience to collectively fund an expensive work such as a TV series.
Moreover it ensures that everyone pays the same price, and no-one pays who can't afford the price.

Digital art is therefore discovery of interesting natural numbers that when interpreted using a particular format can be beheld for their aesthetic or functional aspects.

Obviously given limitless conceivable formats any number can be considered to represent any artwork. However, the fact remains that for any digital artwork and a specific format there exists a corresponding natural number that represents that artwork.

The creator or discoverer of an artwork withholds the details of the format and the natural number until they can assure attribution or remuneration.

So, yes, while a digital artwork is a number, a number is only a digital artwork if it is accompanied by knowledge of its format.

Nevertheless, requiring that all natural numbers belong to the public domain would be no bad thing.
Thus intellectual property only exists where a particularly interesting/useful number+format is secret (known only to the discoverer). Once published, it's free.

Sale of art/secrets is thus where the revenue comes in, and mechanisms such as The Digital Art Auction
are ideal to sell such secrets to large numbers of customers simultaneously.

So, the trick is to make all your money on the first sale.

The Digital Art Auction

That's because the mechanisms to sell open source software are a bit thin on the ground at the moment.

If you check out The Digital Art Auction
you'll see that I'm working on such a mechanism.

Feel free to repost this (with attribution if you feel like it) in response to reposts of the above article.

And that (the parent), folks, is called generalization, and is the song of the hypocrite, one who won't bother to read any rational arguments and instead, much like the people parent mentions in their post, takes a sample (chosen by the parent to support his argument) instead of considering the true point of some of us here.

We have the internet now. We have discovered that digital information can be copied flawlessly in seconds, millions of times over. Hence, we use this ability, combined with having media in a file, to access the media we want to watch. Is it wrong to access information that isn't yours? Yes, of course it is. Is it wrong for recording companies to try to suppress the internet as a way of distributing music because it would force them to innovate and create subscription services that would benefit both themselves, the artists, and their customers? Yes, it is.

Recording companies realize that they have a pretty sweet deal as it is with their current, fully controlled distribution system (CD, radio, TV). Of course, these media are also largely controlled by the recording companies. ClearChannel. MTV. Resellers that, like the recording companies themselves, will not create a subscription service that benefits customers.

Do you not think that if a service was put in place that charged a nominal monthly rate for unlimited download access to a fast peer to peer network and benefitted the artists who made their work available to it that people would use it? As good as Kazaa and many of the other peer to peer networks are, they are often filled with spyware and other ways that the programmers can make money, often in annoying and legally questionable ways. If a service was in place where people could access fast downloads of the music (or other media, though starting with music would probably be best) they want, without any of the crap that comes with many P2P services, I believe that many would want to use it.

But back to the rebuttal. I admit that many of the points the parent makes are true. Sharing is not free advertising. Sharing is illegal. Sharing is piracy. Wait... Did I just admit half of the parent's post? Oh yes... that's because it was misguided attacks at only a few other posts, none of which really had any merit. Scratch that. ONE other post. Once again, the hypocrite is very good at taking the words of some and indicating that these are the words of all.

Why should the record companies invest in a subscription service for their works? Well, for one thing, it's what their customers want. For another, their industry is on the verge of collapse as it is. The internet is an enabler for artists, as well. If artists created their own distribution system, and distributed their works through digital file formats, what would be left for the recording companies to claim? CD pressing? Entirely unnecessary. Talent finding? If you have talent, distribute your files though this service and you will be heard. Studio recording? Can be found through independant shops. Marketing? Perhaps, but again, go to a marketing company. If they feel that you have talent and are a good risk, they'll help you.

Additionally, without such a distribution system, artists may go alternative routes and try new methods of releasing works while gaining funds, like the Digital Art Auction (finally starting to get ready for actual auctions) or the Street Performer Protocol. These make copyright entirely unnecessary, and if they gain popularity, may make much of the media on peer to peer networks fully legal.

But perhaps it's because I'm not an apologist that some of the things I am saying here make sense. In that form it shows that the parent is targetting the unrational trolls of our side and misrepresenting us as being

Of course it's morally wrong.

You know what else is morally wrong? Suing your customers because you're not willing to explore other, decent ways of selling a digital product.

Copyright DOESN'T WORK with digital, copyable works. If the RIAA et al wanted people to respect them more while simultaneously stopping the need to sue their own customers, they would explore some of the new ways of selling works in this age, such as the Digital Art Auction or the Street Performer Protocol, where basically, money, or offers to purchase a work at a specified price, and the work is released to the public domain when the artist gets the money offered for the creation of the work and the offers reach a certain, specified level.

One of the problems is that these both have a one-time payment, and don't offer a renewable source of income from a work, but really, we want to pay for the work itself, not the marketing, advertising, and so forth that go along with it, right?

Check it out

The artist no longer attempts to sell copies, because anyone can make a copy.

Instead, the artist sells their art, i.e. the digital master. Once they've sold the master, anyone can make copies.

Yes. A free market has no fixed price.

Forgive me for accidentally indicating that labour should equal value. I quite agree it is not a direct relationship. However, it's often correlated.

It's not easy coming up with two pieces of music, both of which involve similar labour, but are obviously poles apart in terms of price paid or market value.

With a fixed, nominal pricing of music, i.e. if there are 5 billion downloads, and an ISP levy revenue of $50 million, then every download effectively obtains 1 cent each. If you download a new aria by Jose Carreras once, he gets 1 cent. If you download a ringtone by Joe Bloggs once he gets 1 cent. Sorry, I mean their agents get 1 cent, the artist gets 2.5% of 1 cent.

Ideally, Jose Carreras would say "My market is tiny, I will sell my new aria recorded with the London Philharmonic for $10 a piece to those few people who really appreciate my voice". Joe Bloggs would say "I want to maximise my market - I'll sell each of my "500 classic tune" ring tones at 1 cent each".

To say that because of copying such a market can't exist for music, that popularity is the only measure available and therefore better than nothing is a cop out.

Think harder.

We have an artist, an audience, and a work of art. Why the flip can't they haggle over its price? And then the audience gives the artist the money, and the artist gives the audience the art.

The Digital Art Auction

The trouble with blanket licensing is that there's no way for punters to say "I like this more than this". If everyone and their dog download a particular ditty for their phone's ring tone, does it make it more valuable than a movie soundtrack which only a few people really love, but love a lot?

Why should a quick tinkle on a xylophone be better rewarded than months of work on an orchestral masterpiece?

A better way of capturing music's artistic value is to auction it directly to the interested audience, e.g. using The Digital Art Auction .

This would seem to be the major schizm, ... in general between people who just don't like the RIAA and those who don't like IP law.

True. But just for clarification, I am myself a writer who gets paid for my work, so I'm going out on a limb here.

I'd like you to reconcile this inconsistency first:

Yes, I was not clear there. I was thinking of the auction site linked in an earlier reply - The Digital Art Auction. He has some very interesting ideas. The unwashed masses bid on the creation of a new work. The artist would either be someone with an existing fan base, or would submit a concept/sample. The artist makes his money up front - if it's not enough to satisfy him, he can refuse. He would know in advance how much he would get. I'm not sure that site went so far as to suggest immediate release to public domain upon creation, but I see that it could work. In effect, the unwashed masses becomes patrons of the arts - actually paying artists, not for already created work, but to create the work.

So the website is not "selling" the work, but rather facilitating the monetary incentive to the artist to create the work in the first place.

This would stimulate the creation of more art since the artist can't just live forever on a couple of "hits."

Who is going to pay someone 40k to write a book

This is the cool part! 40,000 fans willing to pay $1 each for their favorite writer to write a new book. Or 4,000 fans willing to pay $10 each. Or the writer might have 40,000 fans willing to pay $10 each! The writer is not compelled to write until he agrees that the amount tendered is acceptable. The site would charge a flat fee - the artist keeps the bulk of his earnings. The fans get what they want, and get the satisfaction of playing a small part in actually helping the work get created - being a "patron."

The Digital Art Auction
is your answer...

At that point, copyright holders would have to find a different business model to survive

I like your thinking.

The Digital Art Auction

People really need to think about this harder.

Can anyone really believe that we'll face a future in which no new art is ever created again, that artists will become extinct, and mankind will turn into the Borg?

Maybe people prefer the domesday scenario as a more comforting one?

Bear in mind that copyright has only existed for a couple of centuries. You cannot tell me that we had no art or artists before that time.

I suggest that if the world's population had immediate and direct access to artists and their art via the Internet, that copyright would be a hindrance rather than a help. Instantaneous and unfettered distribution of digital art would be demanded both by artists as well as their audiences. P2P/file sharing systems move us closer to this artistic utopia - not further away.

Remember, the quicker the artist can communicate with their audience, the quicker they can make a deal, sell the art, and release it.

The fundamental idea that is plainly broken in the digital domain is the idea that you can sell each copy, ONE BY ONE!

No.

You have to sell the release of the art, en masse.

Here's a way: The Digital Art Auction

I do not believe in stealing someone else's copyrighted material.

Why not?

Or perhaps you should say "I do not condone the wilful infringment of someone else's materials' copyright"?

Or perhaps you should say "I still support the use of copyright as a viable revenue model which artists can use to profit from publication of their works"?

Remember that 'copyright' is a legal construct solely designed to encourage publication and not a human or moral right. The moral right is attribution (among other things).

If there were other encouragements for artists to publish their work, one of these could be used instead of copyright. For example, in the absence of copyright, an artist might decide not to publish their work UNTIL AFTER they'd received revenue from the market.

Fortunately, such a model can still be used even before copyright has been abandoned.

Check out The Digital Art Auction to see one of the many ways in which artists could sell their art in the future (with or without copyright).

With the advent of P2P/file sharing on the Internet there are many alternatives to encourage publication that weren't available a couple of centuries ago...

Not many people know this, but there is a new revenue model that enables sale of Open Source based games:
The Digital Art Auction .
Here's an article that describes how it could apply to the games industry:
The Bedroom Coder's Business Model

Not many people know this, but there is a new revenue model that enables sale of Open Source based games:
The Digital Art Auction .
Here's an article that describes how it could apply to the games industry:
The Bedroom Coder's Business Model

If copying is a particular problem for digital content (such as music), then instead of retailing it one copy at a time (on CDs), or giving up and distributing it as Open Content, why not sell it in one go first and then release it as Open Content?

It's very similar to retail: everyone pays the same price, which is set by what the market will bear, but this time the price is set and the sale made, by the purchasers en masse - in advance of the release. This enables the creator to obtain the bulk of their revenue before their content can be copied.

Answer yet to be found?

How about The Digital Art Auction ?

The Digital Art Auction would provide an alternative funding mechanism.

That way if one party was held to be illicitly supplying components of a file, then RIAA might also be considered to be providing a component.

But, while an amusing thought experiment, this kind of thing is not particularly ethical in practice. Far better for the original artist to sell their work into the public domain in the first place (relinquishing copyright - though not moral rights). Such as described here: The Digital Art Auction

Therefore you can take all the GPL code you want, build on it for any period (a month, a decade, whatever), and as long as when you release/distribute it, you release it GPL, then you have still fully complied with the GPL.

All you do, is sell the release of the improvement to a cartel of expectant users.

Naturally, it may be more economic if you engage this cartel in the process of arriving at a fair price. Hence, why The Digital Art Auction may be a better mechanism than simply having the developer set their price.

Once you realise that the cartel needn't be just a few large corporations, but umpteen thousand users, you begin to see that this could be a viable revenue model.

This is a similar idea, but at least allows the market to help arrive at an agreeable valuation: The Digital Art Auction

The key improvement is that not only is the individual price unpaid until the software is released, but that the price isn't set until the software is released, and is guaranteed to be only charged to those people who offered that price or higher.

Whenever I hear about such acts of stupidity, I get more convinced that I should donate funds directly to the artists, and just get the music online.

So do I!

Sounds to me like you'll agree with the following: The Digital Art Auction

It's clear - read this: The Digital Art Auction

The answer is The Digital Art Auction.

The Digital Art Auction

See how here: The Digital Art Auction

I look for a new ecosystem to arise, akin to the open source movement, with music licensed freely to all, with returns coming from the sale of artifacts (DVD's, t-shirts, etc.), and concert tickets.

The Digital Art Auction

It let's the audience pay the artist, doesn't need copyright and doesn't use encryption.

How about this: http://www.digitalartauction.com

Been there, done that. See The Digital Art Auction

Check out: The Digital Art Auction

Once you accept that copying digital information is easy and it should be easy, then it's easy to move on and figure out how to make money.

This is how you do it: The Digital Art Auction

Physical Commodities - Exchange or Access

What is the fundamental basis on which we deal with the customer?

Exchange (This bottle of water, this service, this information, etc.)

Access (Attend this conference, hire this car, use this road, etc.)

One's a single-shot deal (mostly): say hello, exchange goods/money, say goodbye.

The other's a deal that lasts for a certain period. In the case of this conference, three days.

In both cases the physicality of the commodity wholly represents the product and the work that went into producing it. The property is clear, the deal is clear.

Non-Physical Commodities? (Digital Content)

An oxymoron surely?

Let's see. Here's some digital content I'd like to make available for you to download (in only twelve bytes of ASCII) - Write the following down on a piece of paper: "A, D, A, M, space, H, A, D, space, apostrophe, E, M". Thus: "Adam Had 'em."

Incidentally, I'm not the copyright holder of this work, Ogden Nash is. So all of you who've made digital copies by writing it down have just become criminals by copying the work in its entirety.

It's called 'Fleas', also known as the shortest poem in the world, and thus highly valuable. I understand that printed copies of this poem currently retail for up to £5,000 and that consequently the punitive damages for illicit copying may be quite substantial.

If literary works of art were this easy to copy a few hundred years ago, no-one would have invented copyright, let alone convinced themselves that digital content was a commodity.

Copying Physical Commodities is not inherently profitable, so it doesn't need to be controlled

There's nothing wrong with copying physical commodities, because in general the copies are just as much work to produce as the originals.

This is except for novel, patentable devices which enjoy a dispensation to retain a legal monopoly on production for a certain period (to enable the development costs to be recouped). This is to foster economic and technological progress, not to create a human right.

If a non-physical commodity doesn't represent the labour that went into it, then either we assign a right to copy it, or we stop treating it like a commodity. If the latter, then the original work represents the work.

Art is slightly different to a commodity, it's an idea given form

Art, whether written, pictorial, or sculpted is a little different though.

Once upon a time (and today if you've got the money) you could commission art, or you could buy art from artists who'd produced it for sale.

Then, forging art didn't so much hurt the artist as hurt the purchaser. Overt copying was fine, it enabled the art to be enjoyed by more people, e.g. the Bible.

In the case of popular but painstakingly original art the economics were difficult, i.e. it's difficult for an artist or author say, to communicate en masse to their potential readership and encourage them to club together in funding a new work (unlike royalty, aristocrats, etc.). So with the advent of the performance of plays and the printing of books designed for a larger audience, we see in retrospect a new revenue mechanism arise: price each performance or copy as though it were a share in funding the original work. This also requires some ability to prevent anyone else producing copies.

Copyright is Artificial, not 'self-evident'

So we see that copyright is also not a human right, it's just another expedient mechanism to enable the copy to act as the share certificate. You bought a book? You're a paid up shareholder.

The thing is though, copyright's a magic purse. It need never stop bringing in revenue (well beyond the original development costs). And in some fortunate cases, for particularly popular art, a few artists and much of the publishing industry can enjoy great wealth.

It's a brave government that would recall all these magic purses from the rich, powerful and popular. However, there is one organization more powerful than both combined.

Widespread Copying is Endemic

What happens, when there are half a billion people online (out of a planet of 6 billion), each of whom can make a copy of any art they fancy in a moment's thought?

We're talking on a scale of mankind. If people, globally, en masse, copy art, it's possible that it's not really wrong. Rather it's that the law, created to enable a revenue mechanism that requires exclusive copy privileges, is now ineffective, irrelevant and redundant. You cannot prosecute the world. It's the revenue mechanisms that must adapt or die.

Loss of Physical Media

We've lost the physical media upon which art was distributed. This served to reinforce general acceptance of the underlying revenue mechanism in people's minds. However, online, the Emperor is now wearing the finest of sheer silks (fully naked if you ask me). There's no scrap of clothing, no wodge of paper, magnetic tape, plastic box, not even an acrylic disc. It's now just a memory. The only thing that reminds us we've paid our share for the pure information that now comprises art, is the click of the I Agree button on the license page.

So what's the answer?

Don't sell the horse after you've let it out of the stable. Or in other words, don't release the digital content and then try to sell it (relying on copyright). You can't sue 5 billion people. Nor can you place a compensating levy on computers (madness!).

And of course the classic: don't try to lock the stable door after the horse has bolted. Here, I'm obviously talking of encryption and digital rights management. If the art can get into people's eyes or ears, it can be copied by a computer. Encryption is fine for keeping things exclusive when the parties concerned wish to. If you're communicating with someone who doesn't care for exclusivity, encryption won't really work, it just hinders.

Deal En Masse

So what should we do?

Sell the horse before you let it out of the stable. Go back a few hundred years and pick up the old revenue mechanisms that weren't quite so good, because it was difficult to do deals en masse.

And this is because something has changed. For the same reason that copyright is becoming ineffectual, so the public commissioning revenue mechanisms are now becoming feasible.

The biggest mental block facing business today, both online and even with interactive TV companies, is to be unable to think of dealing with the market except as a collection of individuals.

The only deal we're particularly familiar with en masse is voting, e.g. democracy, etc. We dabble with this in TV shows, even with online polls, but that's about it.

Who has dared to let people vote with their money? In the same transaction?

The new value chain

Bypass the agents, the publishers, the marketers, the advertisers, the distributors, the retailers, the packagers, etc. The new value chain is the artist and the audience. We're right back at the craftsman and the customer. Except this time, there's nothing stopping the artist doing a deal with a million people at once. Though no one's thought to create the necessary de facto e-commerce web site for such a deal. Still too busy selling to punters one by one...

The Emperor is Naked

Of course, it's very difficult to believe an emperor could possibly be naked.

If you're selling digital art, digital content, digital whatever, reserve a tiny piece of your long term strategy for the inconceivably possibility that King Canute's bottomless purse of copyright will be overrun by a tide of countless tiny infractions.

Even so, the end of copyright is not the end of commercial viability for digital content, it's the end of a particular revenue mechanism.

Consider Revenue Mechanisms that don't need Copyright

Your audience is your market - deal with it!

Check out this site for more info:

The Digital Art Auction