What is Intellectual Property? > Study Aids > Rewarding the Creator in the 21st Century

Rewarding the Creator in the 21st Century

I am convinced that entertainment-on-demand will continue to exist side-by-side with traditional broadcasting. People will not always be able to decide what they want to read, see of hear and will continue to welcome having material pushed out for them to enjoy passively. The channel-surfing couch potato will rule well into the next millennium.

That means that the present-day structure for protecting broadcasting will inevitably remain, and because broadcasting is a multimedia event, all the structures to protect underlying rights will have to remain intact as well.

I should like to describe a number of paradigms for rewarding the creator which are commonly employed today and look at how they fit into future entertainment-on-demand developments. I have named these paradigms: 'philanthropy', 'patronage', 'pay-per-view', 'collectivism' and 'the factory floor'.

Philanthropy

'Philanthropy' is a paradigm which, at least in the first instance, does not appear to seek to reward the creator in economic terms at all. It is typified by 'freeware' or collaborative efforts like the Linux project: Creators or groups of creators develop a product and give it away at no cost to the private and domestic end-user.

In the case of the Linux project, the aim was to develop an open-architecture version of the Unix operating system suitable for running on networks of personal computers, or on the computer systems which provided the backbone of the INTERNET itself. The 'open architecture' approach meant that all the source code is made available publicly, and there was no restriction on modifying it, improving it or developing inter-operative systems with it.

In practical terms, it means that the development and debugging team was a disparate group of individuals, many linked through the INTERNET, who could make their independent assessment of each module, point out fix bugs, improve the utility of the original code or develop further applications. It is claimed that this approach improved the development cycle and reduced bugs.

It is not entirely right to say that the Linux approach is completely philanthropic: the concept embraces charging people in the normal way if they exploit the code for commercial purposes. It is also certainly true that the project has resulted in numerous spin-off businesses based on packaging the Linux product. But the low price of the Linux product on the market now reflects the fact that it was largely started out life with no financial investment in its development.

The creator of such products may be rewarded by fulfilling an idealistic goal such as the open-architecture ideal. Or he may benefit from fame and the admiration from his peers. But the basic element of this theme is that he forgoes financial reward - at least for a time.

There are very many variations of this theme. The most common is that a product starts out as freeware, and once it becomes popular, the creator starts to sell it. Other times, a third party sees commercial value in a freeware product and buys out the rights. Yet another scenario sees a free product gaining valuable advertising support, so that the product itself remains free but the site from which it is obtained carries commercial advertising.

Patronage

Patronage has been around so long, it is probably one of those adjuncts to that arts and sciences that will never die. It produced the works of the great composers of the 17th to 19th Centuries. Nowadays we usually refer to it as 'sponsorship' or paid advertising.

Clearly sponsorship is a major factor in the development of INTERNET commerce and in promoting creative effort.

Much sponsorship is available in a way that does not make the creator dependent on the sponsor. But by and large, creators who rely on sponsorship - whether charitable or commercial - must face the issues raised by his dependency: the implied influence over content by the sponsor.

The patron's influence is not necessarily something sinister. A commercial patron will be largely motivated by the wish to have his name known or promoted, so the products he sponsors need to remain popular. He is after 'eyeballs'. So in a sense, this brings about a Darwinian 'survival of the fittest' in terms of INTERNET creation.

Unfortunately, however, poor quality will not be the only victim of the 'survival of the fittest': creations outside the popular mainstream are unlikely to attract eyeballs, and therefore commercial sponsorship, and may have to seek charitable sponsorship instead.

Some people see the sponsorship paradigm as the trend of the future. I do not agree. Commercial sponsorship has become popular because it provides a source of revenue for certain sites while not exposing viewers to the perceived risks of credit card transactions on the Net. But this public resistance to INTERNET financial transactions in bound to be eroded, and the place of patronage will be eroded with it. It is no more than a stop-gap.

'Pay-per-view'

On the web today, you can see the pay-per-view paradigm operating most widely and efficiently in pornography sites. This suggests to me a strange phenomenon: that the motivation to view pornography is so strong among some people that all reservations about financial transactions on the Net are overcome.

The sites themselves rarely undertake the charging: this is left to agencies who undertake the registration of people visiting the sites and deduct payments from their credit card accounts. They obtain the details of credit cards from the visitor, often under the pretense that it serves as proof of the visitor's age. The fact that an independent agency is collecting the fee for the true proprietor of the site of often unknown to the visitor.

Having said that this paradigm is widely used in pornography and the shadier side of the web, I think there is much to commend it. The service of the fee collection agency is to provide services to the web-page owner on an out-sourced basis. They provide the technical infrastructure and security for fee-collection for access to web-sites, and they get their payment as a percentage of the fee they collect. Risks from failures in security fall upon them, not the creator. They provide the email and telephone customer service, often on the basis of free-phone numbers. They have no interest in the content of the web-sites they serve (usually the less they know, the better they like it), and there will rarely be a conflict of interest with the creator of the content.

Dissociating myself from the dubious content of the websites they support, I find the business approach of the collection agencies admirable. Their customer service is prompt and helpful; they are reasonably conscientious about customer data; and they are quick to rectify and cancel charges on the slightest suspicion that credit card information they have been given is fraudulent.

Probably the greatest impediment that these services face at present is customers' suspicion of on-line credit card transactions. That issue no doubt accounts for their readiness to avoid any situations where they might be associated with credit card fraud.

Collectivism

I am aware of two main ways that this paradigm operates. One is pure socialism and the other is the operation of licensing and collecting societies.

A purely socialist approach would envisage no copyright royalties payable to the creator. Instead, his intellectual property belongs to the state (indeed there is no concept of 'private property') and the state provides the author with a living. This system has operated in China before, and presumably operates in North Korea today. It is just fine, except that such socialist states have traditionally had vested interests in direct conflict with free expression by creators.

It's alter-ego, now adopted by socialist and capitalist countries alike, is the collecting society. The creator is deemed to belong to a collective of writers, musicians, performers, recording studios, artists or whatever. Unlike the fee-collection agency I described earlier, they collect in respect of the whole repertoire on a time-charge basis, and they actively market to retailers who broadcast works or exploit works commercially in each territory, rather than seeking to charge the end-user.

Clearly, this paradigm has limitations on the INTERNET. It is too broad-brush in its approach because it is based on the anticipation that all the end-users will receive works through performances or packaged broadcasts of works that the collecting society has licensed. But the very essence of the INTERNET is that it is distribution to the individual at a time and place of his choosing.

As I have mentioned, traditional broadcasting is unlikely to be pushed out by entertainment-on-demand because of the generally passive nature of Joe Public. So the collecting society paradigm is not headed for extinction; but it is not the answer to rewarding the creator in the 21 century either.

The factory floor

Creative work has, of course, not been restricted to the artist in his studio or writer at his desk. The great majority of creative copyright works, both in terms of dollar value and volume, are produced on the factory floor, be it the newspaper office, film animation studio, the advertising agency or the software development company. Thus by far the greatest proportion of creators are just employees destined to receive a salary for their regular monthly output.

Clearly this paradigm is not set to change. What it means, however, is that the creator is 'taken care of' and we have to consider rewarding the investor. In fact, the huge majority of all copyright license fees paid by end-users nowadays go to reward investors and not creators. In fact, the proposition that 'laws protecting intellectual property reward the creator' must be one of the world's more blatant distortions of the truth.

Conclusion

'The world is not yet a single political unity, and probably never will be. Differing laws, jurisdictions, markets and economic conditions will continue to exist.'

These safe and comfortable assumptions have been attacked like an irreversible disease by the INTERNET. There is now a 'fourth world'. The spirit in which the INTERNET protocols have been developed and deployed have had as an underlying theme the assumption that political and commercial entities should not be permitted to rule or regulate or censor or tax the Fourth World's activities.

To me at least, the answer to rewarding the 21st century Fourth-World-creator in the INTERNET and wireless digital distribution environment is blindingly obvious. Only a distributed digital system specifically designed to assist those who wish to collect fees on the INTERNET will be able to do the job. Law will not help: you cannot get tolls from drivers rushing past on the highway at 100 kph by waving rule-books at them: you have to have a turnstile and cash collector.

Thus I conclude that all of the paradigms I have described above will continue to exist, because many of the traditional ways of distributing creative works will continue to exist. But the digital collection agency so favoured by INTERNET porn sites is my favourite horse to pick for the Fourth World in the 21st Century.