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You create revenue sharing schemes, people will expect to be paid? | |
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> | The is a second draft of my essay that has undergone significant revisions in response to Professor Moglen’s comments. While I still believe there will be a rise of revenue-sharing schemes as middle-men attempt to attract a differentiated product through financial incentives, this revenue sharing is just another incarnation of the business model of the movie studios and the music industry, and will likely fail for the same reasons. | | | | |
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< | This essay will look at the rise and possible effects of revenue-sharing schemes for user generated content, in which people who makes contributions to a website (whether its an online post, a video, music, product review, etc.) receive a share of the advertisement revenues. In studying the anarchic production of software and the anarchic distribution of digital media, the hardest hurdle in my acceptance of Moglen’s arguments has centered around people’s willingness to contribute; whether contribution is developing open source software, providing material on a wiki or blog, or voluntarily donating money to an artist – paying $8 when you are only required to pay $4. However, it seems empirically evident that people always don’t always act as the profit maximizing “economic man”, and that the free-rider problem hasn’t stymied the development of digital anarchic production and distribution. That being said, the rise of various revenue-sharing schemes for user generated content raises the question whether the anarchic production of online content will begin to be dictated by more traditional economic incentives. If revenue-sharing schemes multiply, in which non-professional users are paid for their collaboration, regardless of how small, will monetary incentives become required to induce online collaboration? If so, how will this effect the quality of the online collaborate process? Though the source and motive of creative activity continues to be multi-faceted - for “money, love, reputation”, I wonder if money will continue to dominate. | >
> | It does not take much to accept the argument that people naturally create and contribute for creation’s sake, and are not simply slaves to economic incentives. This innate desire to create is coupled a desire to share, a desire for recognition and attribution. Now this ability to share one’s production involves a choice. This choice centers on how to distribute one’s creations, which website to host one’s material, which social network to engage in, etc. With the rise of revenue sharing user generated content, I wonder if these online forums and communities will become differentiated. It’s pretty clear that people aren’t paying for non-functional goods anymore (at least not forcibly paying), and if they still are, their children certainly won’t. So the question becomes whether revenue-sharing sites will be able to co-exist with free outlets for non-functional goods, and whether there will be a perceptible difference in quality (at least as measured by hits/advertisement revenue). | | | The Rise of Revenue Sharing for User Generated Content | |
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> | Within the continued struggle over the market for eyeballs, websites have begun to create revenue-sharing schemes to induce people to post the most eyeball attracting content on their sites and thus increase their advertising revenue streams. All forms of media have begun to experiment with this trend: blogs (and user’s comments) , social networking , journalism , photography , user created videos , product reviews , essays and articles , surveys and polls, and many others. For proof that this trend isn’t solely restricted to fringe providers of digital media, more established news sources like the BBC have begun to adopt this model , and You-Tube is also considering this approach . These schemes have been further facilitated by Google Ad-sense, in which users can create an account with Google, receive an ID number, and post this number along with any contributed content on participating websites and get a percentage of the Google Ad revenues. All proceeds are reliably distributed through Paypal . | | | | |
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< | Within the continued struggle over the market for eyeballs, websites have begun to create revenue-sharing schemes to induce people to post the most eyeball attracting content on their sites and thus increase their advertising revenue streams. All forms of media have begun to experiment with this trend: blogs (and user’s comments) , social networking , journalism , photography , user created videos , product reviews , essays and articles , surveys and polls, and many others. For proof that this trend isn’t solely restricted to fringe providers of digital media, more established news sources like the BBC have begun to adopt this model , and You-Tube is also considering this approach . These schemes have been further facilitated by Google Ad-sense, in which users can create an account with Google, receive an ID number, and post this number along with any contributed content on participating websites and get a percentage of the Google Ad revenues. All proceeds are reliably distributed through Paypal . [FN1]
While on its face, revenue sharing doesn’t seem to affect the market for eyeballs as it currently stands, it could have impact on collaborative websites. A revenue sharing site for discrete, self-produced pieces of media like music, videos, essays and photography appears to be no different then someone producing their own websites with advertisements. Although the sites may provide the benefit of centralization, one would expect the websites that use these schemes would eventually become obsolete as it becomes easier (or just more common) for people to distribute their work online by themselves, and capture 100% of the revenue. However, where this type of payment for contribution could be important is for collaborative websites such as wikis, social networking sites, and discussion boards - where a single person’s contributions (ie comments to a blog, correcting the work on a wikipedia article), could carry with it the expectation of payment. Taken to an extreme, one could imagine an online environment in which users expect some amount of remuneration for every online post, review, and comment, as the market for eyeballs is seized by the very eyeballs that comprise it. While Wikipedia can currently operate based on voluntary contributions, could it be crowded out by a competing website that pays its contributors (derived from either higher collection of voluntary financial contributions or ad revenue) for the same actions? If I could write an insightful comment to a news article that keeps the reader on the page for an extra 30 seconds, and they are willing to pay me for it, would I still be willing to comment for free on another site? While it may be unlikely that this type of expectation would take hold throughout the production of all online media, the rise of revenue-sharing schemes indicatse that this possibly shouldn’t be entirely discounted either. | >
> | From what we have studied in class, it seems that this approach is a non-starter. Previously, the large studios had a monopoly of distribution over cultural production in our society, which lead to the extraction of huge rents from the artists themselves and led to the output of products aimed at mass distribution rather than artistic quality. It’s empirically evident that the profit-driven commoditized production of non-functional goods led to the production of mostly bad music and bad movies. While it may be difficult, if not impossible, to judge relative quality of non-functional goods, I think its fair to say that movies and music developed under this model have at least become formulaic, based on whatever sold well previously, and that creativity took a backseat in the artistic process. | | | | |
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> | The rise of revenue sharing sites is an attempt of no-value adding middle men to extract these same rents from artists in the new user generated content environment. The difference in this circumstance is that the profits derived would come solely from advertisement revenues, rather than sale of tangible pieces of media. It seems that that this system could be expanded to profiting from more diverse types of cultural production – such as collaborative websites like wikis, social networking sites and discussion boards - where a single person’s contributions (ie comments to a blog, correcting the work on a wikipedia article) could carry with it an expectation of payment. | | | Money Corrupts Everything? | |
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> | The question then becomes, how will the production of user generated content, especially in a collaborative process, be affected by monetary incentives. As Professor Moglen notes below, “given the power of networked communications to aggregate randomly-motivated and diversely-scaled individual creative and supportive acts”, it doesn’t seem like bribing people to produce on your website it going to work. For one thing, as we’ve discussed in class, people will begin to defeat internet advertisements altogether with easy adoption of currently available Firefox add-ons. But even assuming that advertisers figure out ways around this, ultimately any material produced on these revenue-sharing sites is going to be sub-standard. | | | | |
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> | There are two apparent concerns that financial incentives could introduce upon digital media production:1) The possibility that profit motivated content could crowd out production motivated by creativity (assuming the former is inferior to the latter). 2) There is the concern that online communities could be stymied by the knowledge users’ participation is disingenuous and at least partially motivated for profit. In 1970, Richard Titmuss theorized that offering compensation for blood donations would crowd out voluntary donations, and one must wonder how this would be applied to contributions to collaborative digital media production. As for paid social networking sites, one can easily imagine the effects monetary incentives could have on the number of Facebook friends people acquired, and the authenticity of the social relationships created in such forums. | | | | |
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< | The question then becomes, how will the production of user generated content, especially in a collaborative process, be affected by monetary incentives? Youtube’s founder, Chad Hurley, offered his less than sincere reticence over revenue sharing:
We didn’t want to build a system that was motivated by monetary reward. We wanted to really build a true community around video. When you start out with giving money to people from day one, the people you do attract will just switch to the next provider who’s paying more. We’re at a scale now that we feel we can do that and still have a true community around video.
Ignoring Hurley’s profit-motivated desire not to pay contributors, he may have a point. There are two apparent concerns that financial incentives could introduce upon digital media production:[FN2] 1) The possibility that profit motivated content could crowd out production motivated by creativity (assuming the former is inferior to the latter). 2) There is the concern that online communities could be stymied by the knowledge users’ participation is disingenuous and at least partially motivated for profit. In 1970, Richard Titmuss theorized that offering compensation for blood donations would crowd out voluntary donations [FN3] , and one must wonder how this would be applied to contributions to collaborative digital media production. One could easily imagine people fashioning their online profiles, comments, online discussions and other collaborative projects to be oriented towards Google keyword searches, in order to provide more advertisement revenue. As for paid social networking sites, one can easily imagine the effects monetary incentives could have on the number of Facebook friends people acquired, and the authenticity of the social relationships created in such forums. On the other hand, its possible that these corruptions, inherent in financially motivated collaborative online projects, would make them far inferior to the uncompensated variety, and therefore inhibit and altogether preclude the prevalence of revenue-sharing schemes in these settings.
1 See survey of websites at: http://www.mundanetechnologies.com/goings-on/workshop/melbourne/papers/ChaiPotdarChang.pdf
2 http://www.virtualgoods.org/2007/16_VG07_Ahrens_Hess_Freese.pdf | >
> | It seems that the production of online collaboration, solely for money, is going to bear the same qualities as today's Hollywood movies and pop music,for the reasons mentioned above. When payment is based upon the number of internet hits one can derive, inevitably the product will devolve in quality into the current form of pop that we are inundated with today. | | | | |
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< | 3 http://www.ne.su.se/research/enter/pdf/johannesson.pdf | >
> | Cultural production that is supported by voluntary donations, as described by in class, or through some of the other methods discussed on this wiki (voluntary contribution, fan groups, merchandise sale, or government subsidy)could lead to the production of better music. When the goal isn’t to get the most internet hits by appealing to the lowest common denominator, it makes sense. Maybe it’s self evident, but the ability to play to one’s peers/core audience in the online collaborative environment seems like a better recipe for production versus revenue sharing. If this is the case, then we’ll be lucky when these revenue sharing schemes eventually die off. | | | -- AdamCohen - 14 Nov 2008 |
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