Wednesday, December 28, 2011

The War over the "Free Ride" (Robert Levine's Book), and the FairPay Win-Win Solution

Robert Levine's "Free Ride" is an important study, but a partisan one, as you can judge from its subtitle: "How Digital Parasites are Destroying the Culture Business, and How the Culture Business Can Fight Back."  It explains that competing interests are at war, old business models for creator's and seller's rights have been disrupted, and new business models are needed.  However, it is unable to offer much satisfying guidance to a solution.

This is a very valuable book (with more balance than one might expect), and a very good history and economics lesson. Levine provides a good grounding for "how to fight the last war"--a war of creative rights versus technology (and the double edged sword of new freedoms it offers). It does provide some of the balance we need to accept that both sides are legitimate (to a degree). Levine warns that "over the nest decade, we will chose between two competing visions for the online world...more like cable television ...[or] more like the Internet. ...It is really about commence or chaos. ...A completely closed system would indeed defeat the purpose of the Internet...But so would an absolutely open one...  We'd have a twenty-first century communications infrastructure supporting a seventeenth-century economy, where artists need patrons and only physical items have value." A very good statement of the problem...

He offers only one potential solution:  a compromise, and one that is old, awkward, and unappealing in many ways. What we really need is something new, a twenty-first century synthesis, one that offers a win-win solution, not just variations on the old zero-sum battles.   I suggest FairPay offers the kind of forward-looking synthesis we need, as I will explain in a moment.

For an excellent review of "Free Ride" by an expert in the space, check out "Robert Levine Tells the Rest of the Story" on Bill Rosenblatt's blog.  As Bill says:
If Jaron Lanier’s You Are Not a Gadget from last year is the philosophical tract on which a new movement in favor of content creators’ rights has been founded, then Free Ride provides the  factual foundation on which such a movement should be based. ...
Yet Levine is hardly an apologist for the media industry.  For example, he agrees that the term of copyright and statutory damages for infringement under U.S. law are way too long and large, and he finds the media industry just as guilty as anyone else of funding “research studies” that produce blatantly biased results.  In fact, Levine’s journalistic instincts often get the better of him as he feels compelled to balance every factual assertion that bolsters his point with a counterfactual that softens it; the book ends up being far more balanced than its polemic subtitle suggests.
My interest here is in looking forward to a better solution. As Levine explains in depth, we have been facing a problem that has had no well-balanced solution in sight.  He presents a strong case for the rights of creators, and the practical necessity of incentivizing costly creations.  He recognizes that piracy is hard to stop, and that part of the cure is to make it easy for consumers to buy what they want in the form they want, and he gives an excellent history of failed attempts to find better business models. "The real issue is how to establish a functioning market for content online."  "A decade after Napster, labels of all sizes are still struggling to reinvent their businesses." Quoting Jeff Zucker, on "Business models to support the digital revolution...we are still very much in the beginning."

It seems that no one has yet found the right synthesis.  Levine does take a a bit of a stab at it, presenting a case for blanket licensing (or collective licensing), much like the model used for licensing music rights on radio via ASCAP and BMI, as the only viable way to address the current dilemma.  I, too, have for many years seen it as the only systematic compromise in sight. But there are serious problems with it, as nicely summarized by Rosenblatt:  "...the many shortcomings of copyright and content licensing under such systems in Europe (and elsewhere): inequitable royalty distribution, irrational levy schemes, opaque accounting, inefficiencies, resistance to new business models, cross-border chaos, and more."

From the perspective of FairPay, the fundamental problem with blanket licensing is that it is not grounded in the dynamics of market forces, but is clumsily pre-set by bureaucratic mandates that cannot adapt to varying real-world contexts.

In contrast, FairPay applies the power of the networked digital marketplace to bring twenty-first century solutions to the very problems it creates.  FairPay offers not a compromise within the old paradigm, but a radically new kind of synthesis -- one that changes the fundamental nature of sales transaction and the play of  market forces -- to find a dynamic, adaptive, and nuanced solution to the problem of balancing creator and consumer rights. FairPay changes the rules to create more win-win marketplace, that expands the digital economy, and the opportunities for both creators and their consumers.

FairPay provides an institutional framework for deep two-way connections between consumers and creators/businesses--in the form of individual dialogs about the value of offerings, as actually realized by each user in their specific contexts. This can be done with a structured balance of powers in which the consumer sets an individualized price they think fair, and the creator/business continues to permit such transactions as long as they agree that consumer is "fair" about the price, using the power of networked markets to make that assessment. That can improve margins and market efficiency for creators/sellers, and can empower relationships based on fair value exchange (a buyer-agreed-to form of price discrimination). Think of a privilege that is earned and maintained -- a zone of pricing freedom, a "FairPay Zone." The details of how FairPay does this are in the sidebar, the related Web site, and the many posts here.

FairPay is not the answer for all offerings in all markets, but I think it can pervade many segments--and that its more collaborative model for marketplace relationships will fundamentally change a large segment of our economy. I suggest, that just as mass marketing changed the fundamental nature of commerce a century ago-- and disconnected sellers from buyers--relationship dialogs of the kind used in FairPay can remedy that and create a new and higher level of engagement.  That dialog and engagement create and guide a new force for funding "The Culture Business" that Levine is rightly concerned about -- a new paradigm for the invisible hand.


  1. Mainly because Levine clearly shows exhaustive, we have been in front of issues having have hardly any well-balanced choice coming soon. She features an intense condition to your the law for game makers, and also handy basic need for incentive's highly-priced handy work.

    1. IEEE Final Year projects Project Centers in India are consistently sought after. Final Year Students Projects take a shot at them to improve their aptitudes, while specialists like the enjoyment in interfering with innovation. For experts, it's an alternate ball game through and through. Smaller than expected IEEE Final Year project centers ground for all fragments of CSE & IT engineers hoping to assemble. Final Year Projects for CSE It gives you tips and rules that is progressively critical to consider while choosing any final year project point.

      JavaScript Online Training in India

      JavaScript Training in India

      The Angular Training covers a wide range of topics including Components, Angular Directives, Angular Services, Pipes, security fundamentals, Routing, and Angular programmability. The new Angular TRaining will lay the foundation you need to specialise in Single Page Application developer. Angular Training

  2. A good book always learnable for every reader. This actually very good book review about this important culture business free ride book. Here visit on this site to get Latin to English translation services. Here you have provided excellent information about the book. Every book reader should love to read book to increase there business knowledge. Thanks

  3. This book is helping students a lot in many aspects and it is incredible. WE should learn important fundamental approach that this site provide to students.

  4. Our job is to provide the benefits to students. Our site is very informative and incredible. look at this and you'll know more about the typing services.

  5. Excellent book reading techniques. Preparing demonstrates to an individual generally accepted methods to comprehend one's concealed and regular limits which are stand-out in every person on the planet and it moreover grooms the thinking of a person.

  6. This is one of the best and valuable blog, I have seen since past some time. Thank you so much for sharing this blog with. Visit Ogen Infosystem for Creative Website Designing Services.
    SEO Service in Delhi

  7. Awesome and Valuable information in this blog. Visit Y&H Cargo India for best Logistics and Shipping Company Services.
    Logistics Company in Delhi

  8. Thank you, I have just been searching for information about this topic for ages and yours is the best I have discovered till now. But, what about the conclusion? Are you sure about the source? setting up an ecommerce website

  9. Nice blog, get the best Truck Branding Services in India by Kala Kutir Pvt Ltd.
    Truck Branding Services india

  10. What’s Taking place i'm new to this, I stumbled upon this I have found It positively useful and it has aided me out loads. I hope to contribute & assist different customers like its aided me. Good job.choose from thousands of products online

  11. Awesome blog, thanks for sharing this informative blog with us. Visit Djcareerindia for Top 5 DJ Schools and DJ Course in India (2019 Rankings).
    Top 5 DJ Schools and DJ Course in India (2019 Rankings)

  12. I know this if off topic but I'm looking into starting my own weblog and was wondering what all is required to get set up? I'm assuming having a blog like yours would cost a pretty penny? I'm not very web savvy so I'm not 100% certain. Any tips or advice would be greatly appreciated. Appreciate it

  13. I was just searching for this info for a while. After 6 hours of continuous Googleing, finally I got it in your site. I wonder what is the lack of Google strategy that do not rank this type of informative web sites in top of the list. Normally the top web sites are full of garbage. internet marketing singapore

  14. We are a group of volunteers and starting a new scheme in our community. Your site provided us with valuable information to work on. You have done a formidable job and our whole community will be thankful to you. domain registration singapore