288 lines
15 KiB
Markdown
288 lines
15 KiB
Markdown
---
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created_at: '2017-05-27T18:28:58.000Z'
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title: Better than Free (2008)
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url: http://kk.org/thetechnium/better-than-fre/
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author: _pius
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points: 194
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story_text:
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comment_text:
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num_comments: 52
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story_id:
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story_title:
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story_url:
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parent_id:
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created_at_i: 1495909738
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_tags:
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- story
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- author__pius
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- story_14431233
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objectID: '14431233'
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---
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\[Translations:
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[Belarusian](http://www.moneyaisle.com/worldwide/better-than-be),
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[Chinese](http://tuxfans.com/2008/02/05/154/),
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[French](http://www.biologeek.com/journal/index.php/mieux-que-gratuit-le-business-model-reinvente),
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[German](http://bewegliche-lettern.de/2009/08/kevin-kelly-besser-als-kostenlos-better-than-free/),
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[Italian](http://www.internazionale.it/come-fare-soldi-gratis/),
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[Japanese](http://memo7.sblo.jp/article/12121626.html),
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[Polish](http://cheap.de/science/lepiej-niz-bezplatny),
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[Portuguese](http://midiascopio.blogspot.com/2010/07/melhor-que-gratis.html),
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[Russian](http://howtosell.ru/2008/04/22/luchshe-chem-besplatno/),
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[Spanish](http://www.uncafelitoalasonce.com/mejor-que-gratis/),
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[Turkish](http://kozmostansesler.blogspot.com/2009/02/bedavadan-daha-cazip.html),
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[Estonian](http://www.besteonderdelen.nl/blog/?p=10116)\]
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The internet is a copy machine. At its most foundational level, it
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copies every action, every character, every thought we make while we
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ride upon it. In order to send a message from one corner of the internet
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to another, the protocols of communication demand that the whole message
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be copied along the way several times. IT companies make a lot of money
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selling equipment that facilitates this ceaseless copying. Every bit of
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data ever produced on any computer is copied somewhere. The digital
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economy is thus run on a river of copies. Unlike the mass-produced
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reproductions of the machine age, these copies are not just cheap, they
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are free.
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Our digital communication network has been engineered so that copies
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flow with as little friction as possible. Indeed, copies flow so freely
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we could think of the internet as a super-distribution system, where
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once a copy is introduced it will continue to flow through the network
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forever, much like electricity in a superconductive wire. We see
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evidence of this in real life. Once anything that can be copied is
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brought into contact with internet, it will be copied, and those copies
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never leave. Even a dog knows you can’t erase something once it’s flowed
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on the internet.
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![Copy-Transmission](http://kk.org/thetechnium/copy-transmission.jpg)
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This super-distribution system has become the foundation of our economy
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and wealth. The instant reduplication of data, ideas, and media
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underpins all the major economic sectors in our economy, particularly
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those involved with exports — that is, those industries where the US has
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a competitive advantage. Our wealth sits upon a very large device that
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copies promiscuously and constantly.
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Yet the previous round of wealth in this economy was built on selling
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precious copies, so the free flow of free copies tends to undermine the
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established order. If reproductions of our best efforts are free, how
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can we keep going? To put it simply, how does one make money selling
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free copies?
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I have an answer. The simplest way I can put it is thus:
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When copies are super abundant, they become worthless.
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When copies are super abundant, stuff which can’t be copied becomes
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scarce and valuable.
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**When copies are free, you need to sell things which can not be
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copied.**
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Well, what can’t be copied?
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There are a number of qualities that can’t be copied. Consider “trust.”
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Trust cannot be copied. You can’t purchase it. Trust must be earned,
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over time. It cannot be downloaded. Or faked. Or counterfeited (at least
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for long). If everything else is equal, you’ll always prefer to deal
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with someone you can trust. So trust is an intangible that has
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increasing value in a copy saturated world.
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There are a number of other qualities similar to trust that are
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difficult to copy, and thus become valuable in this network economy. I
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think the best way to examine them is not from the eye of the producer,
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manufacturer, or creator, but from the eye of the user. We can start
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with a simple user question: why would we ever pay for anything that we
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could get for free? When anyone buys a version of something they could
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get for free, what are they purchasing?
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From my study of the network economy I see roughly eight categories of
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intangible value that we buy when we pay for something that could be
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free.
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In a real sense, these are eight things that are better than free. Eight
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uncopyable values. I call them “generatives.” A generative value is a
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quality or attribute that must be generated, grown, cultivated,
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nurtured. A generative thing can not be copied, cloned, faked,
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replicated, counterfeited, or reproduced. It is generated uniquely, in
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place, over time. In the digital arena, generative qualities add value
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to free copies, and therefore are something that can be sold.
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**Eight** **Generatives Better Than Free**
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**Immediacy** – Sooner or later you can find a free copy of whatever you
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want, but getting a copy delivered to your inbox the moment it is
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released — or even better, produced — by its creators is a generative
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asset. Many people go to movie theaters to see films on the opening
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night, where they will pay a hefty price to see a film that later will
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be available for free, or almost free, via rental or download. Hardcover
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books command a premium for their immediacy, disguised as a harder
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cover. First in line often commands an extra price for the same good. As
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a sellable quality, immediacy has many levels, including access to beta
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versions. Fans are brought into the generative process itself. Beta
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versions are often de-valued because they are incomplete, but they also
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possess generative qualities that can be sold. Immediacy is a relative
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term, which is why it is generative. It has to fit with the product and
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the audience. A blog has a different sense of time than a movie, or a
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car. But immediacy can be found in any media.
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**Personalization** — A generic version of a concert recording may be
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free, but if you want a copy that has been tweaked to sound perfect in
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your particular living room — as if it were preformed in your room — you
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may be willing to pay a lot. The free copy of a book can be custom
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edited by the publishers to reflect your own previous reading
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background. A free movie you buy may be cut to reflect the rating you
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desire (no violence, dirty language okay). Aspirin is free, but aspirin
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tailored to your DNA is very expensive. As many have noted,
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personalization requires an ongoing conversation between the creator and
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consumer, artist and fan, producer and user. It is deeply generative
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because it is iterative and time consuming. You can’t copy the
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personalization that a relationship represents. Marketers call that
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“stickiness” because it means both sides of the relationship are stuck
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(invested) in this generative asset, and will be reluctant to switch and
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start over.
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**Interpretation** — As the old joke goes: software, free. The manual,
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$10,000. But it’s no joke. A couple of high profile companies, like Red
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Hat, Apache, and others make their living doing exactly that. They
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provide paid support for free software. The copy of code, being mere
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bits, is free — and becomes valuable to you only through the support and
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guidance. I suspect a lot of genetic information will go this route.
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Right now getting your copy of your DNA is very expensive, but soon it
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won’t be. In fact, soon pharmaceutical companies will PAY you to get
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your genes sequence. So the copy of your sequence will be free, but the
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interpretation of what it means, what you can do about it, and how to
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use it — the manual for your genes so to speak — will be expensive.
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**Authenticity** — You might be able to grab a key software application
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for free, but even if you don’t need a manual, you might like to be sure
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it is bug free, reliable, and warranted. You’ll pay for authenticity.
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There are nearly an infinite number of variations of the Grateful Dead
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jams around; buying an authentic version from the band itself will
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ensure you get the one you wanted. Or that it was indeed actually
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performed by the Dead. Artists have dealt with this problem for a long
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time. Graphic reproductions such as photographs and lithographs often
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come with the artist’s stamp of authenticity — a signature — to raise
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the price of the copy. Digital watermarks and other signature technology
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will not work as copy-protection schemes (copies are super-conducting
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liquids, remember?) but they can serve up the generative quality of
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authenticity for those who care.
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**Accessibility** – Ownership often sucks. You have to keep your things
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tidy, up-to-date, and in the case of digital material, backed up. And in
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this mobile world, you have to carry it along with you. Many people, me
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included, will be happy to have others tend our “possessions” by
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subscribing to them. We’ll pay Acme Digital Warehouse to serve us any
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musical tune in the world, when and where we want it, as well as any
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movie, photo (ours or other photographers). Ditto for books and blogs.
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Acme backs everything up, pays the creators, and delivers us our
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desires. We can sip it from our phones, PDAs, laptops, big screens from
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where-ever. The fact that most of this material will be available free,
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if we want to tend it, back it up, keep adding to it, and organize it,
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will be less and less appealing as time goes on.
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**Embodiment** — At its core the digital copy is without a body. You can
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take a free copy of a work and throw it on a screen. But perhaps you’d
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like to see it in hi-res on a huge screen? Maybe in 3D? PDFs are fine,
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but sometimes it is delicious to have the same words printed on bright
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white cottony paper, bound in leather. Feels so good. What about
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dwelling in your favorite (free) game with 35 others in the same room?
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There is no end to greater embodiment. Sure, the hi-res of today — which
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may draw ticket holders to a big theater — may migrate to your home
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theater tomorrow, but there will always be new insanely great display
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technology that consumers won’t have. Laser projection, holographic
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display, the holodeck itself\! And nothing gets embodied as much as
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music in a live performance, with real bodies. The music is free; the
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bodily performance expensive. This formula is quickly becoming a common
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one for not only musicians, but even authors. The book is free; the
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bodily talk is expensive.
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**Patronage** — It is my belief that audiences WANT to pay creators.
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Fans like to reward artists, musicians, authors and the like with the
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tokens of their appreciation, because it allows them to connect. But
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they will only pay if it is very easy to do, a reasonable amount, and
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they feel certain the money will directly benefit the creators.
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Radiohead’s recent high-profile experiment in letting fans pay them
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whatever they wished for a free copy is an excellent illustration of the
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power of patronage. The elusive, intangible connection that flows
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between appreciative fans and the artist is worth something. In
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Radiohead’s case it was about $5 per download. There are many other
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examples of the audience paying simply because it feels good.
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**Findability** — Where as the previous generative qualities reside
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within creative digital works, findability is an asset that occurs at a
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higher level in the aggregate of many works. A zero price does not help
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direct attention to a work, and in fact may sometimes hinder it. But no
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matter what its price, a work has no value unless it is seen; unfound
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masterpieces are worthless. When there are millions of books, millions
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of songs, millions of films, millions of applications, millions of
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everything requesting our attention — and most of it free — being found
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is valuable.
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The giant aggregators such as Amazon and Netflix make their living in
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part by helping the audience find works they love. They bring out the
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good news of the “long tail” phenomenon, which we all know, connects
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niche audiences with niche productions. But sadly, the long tail is only
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good news for the giant aggregators, and larger mid-level aggregators
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such as publishers, studios, and labels. The “long tail” is only
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lukewarm news to creators themselves. But since findability can really
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only happen at the systems level, creators need aggregators. This is why
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publishers, studios, and labels (PSL)will never disappear. They are not
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needed for distribution of the copies (the internet machine does that).
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Rather the PSL are needed for the distribution of the users’ attention
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back to the works. From an ocean of possibilities the PSL find, nurture
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and refine the work of creators that they believe fans will connect
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with. Other intermediates such as critics and reviewers also channel
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attention. Fans rely on this multi-level apparatus of findability to
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discover the works of worth out of the zillions produced. There is money
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to be made (indirectly for the creatives) by finding talent. For many
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years the paper publication TV Guide made more money than all of the 3
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major TV networks it “guided” combined. The magazine guided and pointed
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viewers to the good stuff on the tube that week. Stuff, it is worth
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noting, that was free to the viewers. There is little doubt that
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besides the mega-aggregators, in the world of the free many PDLs will
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make money selling findability — in addition to the other generative
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qualities.
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These eight qualities require a new skill set. Success in the free-copy
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world is not derived from the skills of distribution since the Great
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Copy Machine in the Sky takes care of that. Nor are legal skills
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surrounding Intellectual Property and Copyright very useful anymore. Nor
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are the skills of hoarding and scarcity. Rather, these new eight
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generatives demand an understanding of how abundance breeds a sharing
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mindset, how generosity is a business model, how vital it has become to
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cultivate and nurture qualities that can’t be replicated with a click of
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the mouse.
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In short, the money in this networked economy does not follow the path
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of the copies. Rather it follows the path of attention, and attention
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has its own circuits.
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Careful readers will note one conspicuous absence so far. I have said
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nothing about advertising. Ads are widely regarded as the solution,
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almost the ONLY solution, to the paradox of the free. Most of the
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suggested solutions I’ve seen for overcoming the free involve some
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measure of advertising. I think ads are only one of the paths that
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attention takes, and in the long-run, they will only be part of the new
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ways money is made selling the free.
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But that’s another story.
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Beneath the frothy layer of advertising, these eight generatives will
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supply the value to ubiquitous free copies, and make them worth
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advertising for. These generatives apply to all digital copies, but also
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to any kind of copy where the marginal cost of that copy approaches
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zero. (See my essay on [Technology Wants to Be
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Free](http://kk.org/thetechnium/archives/2007/11/technology_want.php).)
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Even material industries are finding that the costs of duplication near
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zero, so they too will behave like digital copies. Maps just crossed
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that threshold. Genetics is about to. Gadgets and small appliances (like
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cell phones) are sliding that way. Pharmaceuticals are already there,
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but they don’t want anyone to know. It costs nothing to make a pill. We
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pay for Authenticity and Immediacy in drugs. Someday we’ll pay for
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Personalization.
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Maintaining generatives is a lot harder than duplicating copies in a
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factory. There is still a lot to learn. A lot to figure out. Write to me
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if you do.
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