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Roger Clarke **
For a Panel Session on the above topic, at an AEShareNet seminar on Making the Most of Creativity: In the Public Interest! Sharing Knowledge and Rewarding Innovation, Sydney, 2 March 2006
Notes of 1 March 2006
© Xamax Consultancy Pty Ltd, 2006
Available under an AEShareNet licence or a Creative Commons licence.
This document is at http://www.rogerclarke.com/EC/DFG0603.html
The accompanying slide-set is at http://www.rogerclarke.com/EC/DFG0603.ppt
The no-longer-new digital environment has made most creations more accessible. It is playing merry hell with the fortunes of value-adders. And for many consumer/producers, it has changed appropriation from a vice to a virtue.
This panel is about individuals who create content - whether it be text, image, audio, video or holograms; whether it be information, pseudo-information or fiction; and whether it be art or entertainment.
It asks how those individuals can avoid starving in garrets, and earn an income from their creativity. In the eCommerce world, we'd say 'what's your business model?'.
In this short hour, the focus is not on whether others get fat by:
The focus is also not on:
In short, we're assuming leakage, because in the digital world it's a given.
I've asked my fellow panellists to tell us how individuals who produce art and entertainment can earn money:
Chair: Roger Clarke, Chair, AEShareNet Limited, Canberra
e-Learning: Prof. James Dalziel, MELCOE, Macquarie Uni., Sydney
Collecting Society: Simon Lake, Screenrights, Sydney
Publisher: Michelle Carlyle, Pearson Education, Sydney
Creative Commons: Prof. Brian Fitzgerald, Law, QUT, and CC Australia, Brisbane
Legal: Patrick Fair, Baker & MacKenzie, Sydney
Big and medium-sized business has been struggling since about 1995, trying to understand how to make money in the digital era. Creative individuals can now learn relatively cheaply and quickly, from what business has been learning expensively and slowly.
[Slide 2] An eBusiness Model is an answer to the question 'Who Pays? For What? To Whom? And Why?'.
[Slide 3] There are many models around, and even the ones that haven't been successful contain messages for eBusiness.
[Slide 4] Consider the 'What Do People Pay For?' part of the question. Creatives have to understand the psyche of their customers and potential customers. They want to perceive extra value, they want added extras at the time, they want added extras afterwards, they want your know-how as well as the thing they think they're buying, and they want it now. To make a good living, creatives have to be selling more than just digital content.
[Slide 5] The reasons people pay rather than just appropriating are many and varied. But they all come down to perception of 'I can't get it any other way', of 'I can't get it now any other way', of value-for-money, or of quality. Creatives have to find their prospects' psychic needs, and play to them. It's called 'salesmanship'.
[Slide 6] More specifically, here are particular ways in which you can pay the rent. I'll quickly describe each of direct and indirect cash flows, the role of reputation, and patronage.
[Slide 7] There are various ways to get people to pay for things, even though they're available gratis through another channel. Shapiro & Varian wrote half a book on the topic. The key concept is differentiated products. And creatives mustn't overlook the various forms of advertising, nor the (admittedly still pretty slim) flows from conscience-money.
[Slide 8] If the product itself doesn't generate enough revenue, a creative person can earn from adjacent activities. Standard products, even digital ones, often don't have a perfect fit to the customer's needs, and there's money to be made in customisation and advice. And many products don't have to be ephemeral, so they can be renewed, and the theme re-worked and made to appear relevant weeks, months and years later.
[Slide 9] Don't under-value giveaways and loss-leaders as a means of establishing and maintaining reputation. My personal web-site started in February 1995 as pure 'vanity press'. Then it became collateral, as people checked me out before they bought my services. With 3 million hits p.a., it isn't just collateral any more. Clients appear at my digital doorstep who'd never heard of me until Google put me on their screens. That effect has been so strong that I fear that I've forgotten how to do old-fashioned selling.
[Slide 10] And don't write off the way that Mozart and Beethoven at least survived and even occasionally prospered. Big business uses a form of patronage; they just use different words for it. Creatives aren't threatened by the digital era. They just need what they've always needed: a bit of business savvy to go with their other talents.
Clarke R. (1997) 'Electronic Publishing: A Specialised Form of Electronic Commerce' Proc. 10th Int'l Electronic Commerce Conf., Bled, Slovenia, June 1997, at http://www.rogerclarke.com/EC/Bled97.html
Clarke R. (1998) 'Key Issues in Electronic Commerce and Electronic Publishing' Proc. Information Online and On Disc 99, Sydney, 19 - 21 January 1999, at http://www.rogerclarke.com/EC/Issues98.html
Clarke R. (1999a) 'Electronic Trading in Copyright Objects and Its Implications for Universities' Proc. Austral. EDUCAUSE'99 Conf., Sydney, 18-21 April 1999, at http://www.rogerclarke.com/EC/ETCU.html
Clarke R. (1999b) '"Information Wants to be Free"' Xamax Consultancy Pty Ltd, August 1999, at http://www.rogerclarke.com/II/IWtbF.html
Clarke R., Higgs P.L. & Dempsey G. (2000) 'Key Design Issues in Marketspaces for Intellectual Property Rights' Proc. 13th International EC Conference, in Bled, Slovenia, 19-21 June 2000, at http://www.rogerclarke.com/EC/Bled2K.html
Clarke R. & Nees S. (2000) 'Technological Protections for Digital Copyright Objects' Proc. 8th Euro. Conf. Infor. Sys. (ECIS'2000), July 2000, at http://www.rogerclarke.com/II/TPDCO.html
Clarke R. (2003a) 'Copyright: The Spectrum of Content Licensing' Xamax Consultancy Pty Ltd, June 2003, at http://www.rogerclarke.com/EC/CCLic.html
Clarke R. (2003b) 'To Share and To Profit' Presentation at a Debate on 'To Share or Not to Share', a plenary session of the Queensland TAFE `Shooting the Tube' Conference, Griffith Uni., 4 July 2003, at http://www.rogerclarke.com/EC/TAFECD030704.html
Clarke R. (2004a) 'Open Source Software and Open Content As Models for eBusiness' Proc. 17th Int'l eCommerce Conf., Bled, Slovenia, 21-23 June 2004, at http://www.rogerclarke.com/EC/Bled04.html
Clarke R. (2004b) 'eBusiness Models for Content: The Closed v. The Open Approaches' Expert Address to the ECOM-ICOM Programme of the University of Hong Kong, 9 September 2004, at http://www.rogerclarke.com/EC/eBusContent.html
Clarke R. (2004c) 'Open Content Licensing for Research Paper (Pr)ePrints' Xamax Consultancy Pty Ltd, September 2004, at http://www.rogerclarke.com/EC/OCLRPP0409.html
Clarke R. (2004d) 'eBusiness Models for Sharing Content' Invited Presentation to the conference on 'Unlocking I.P.: New models for sharing and trading intellectual property', U.N.S.W. Sydney, 18-19 November 2004, at http://www.rogerclarke.com/EC/BMUIP0411.html
Clarke R. (2005a) 'P2P Technology's Strategic & Policy Implications' Abstract of an address in ECom-IComp Experts Address Series at the University of Hong Kong, September 2005, at http://www.rogerclarke.com/EC/P2P-StratPol-0509.html
Clarke R. (2005b) 'IP Business Models for the TAFE Sector' Prepared for a Professional Learning Seminar for the Victorian TAFE Development Centre, Melbourne, 20 September 2005, at http://www.rogerclarke.com/EC/IPBusTAFE-0509.html
Roger Clarke is Principal of Xamax Consultancy Pty Ltd, Canberra. He is also a Visiting Professor in the Cyberspace Law & Policy Centre at the University of N.S.W., a Visiting Professor in the E-Commerce Programme at the University of Hong Kong, and a Visiting Professor in the Department of Computer Science at the Australian National University.
The content and infrastructure for these community service pages are provided by Roger Clarke through his consultancy company, Xamax.
From the site's beginnings in August 1994 until February 2009, the infrastructure was provided by the Australian National University. During that time, the site accumulated close to 30 million hits. It passed 50 million in early 2015.
Sponsored by Bunhybee Grasslands, the extended Clarke Family, Knights of the Spatchcock and their drummer
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Created: 1 March 2006 - Last Amended: 1 March 2006 by Roger Clarke - Site Last Verified: 15 February 2009
This document is at www.rogerclarke.com/EC/DFG0603.html