Open Source v Open Content Business Models - English version

Increasing your value as a product: open source and open content business

models

Jessica CoatesProject Manager, Creative Commons Clinic

Queensland University of TechnologySeptember 2008

AUSTRALIApart of the Creative Commons international initiative

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http://www.qut.edu.au/

Disclaimers

1. I am not an economist

2. I am not an open source expert


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Paying for Open

Myth – if you release your material under an open access licence you can never earn money for it

People used to say the same thing about anything released on the internet.


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Paying for Open

free as in speech, not as in beer

business models are developing


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About 20 years old


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Open Source(software)

Always operated in business world

About 10 years old

Open Content(music, text, images, video)

Started with amateur and gift cultures

Main customers = private individuals

Economics focuses on compensation for existing product

Main customers = commercial businesses

Economics focuses on funding software production


Volunteers – amateurs, those with other jobs


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Open Source Contributors

Government – public servants developing software eg Brazil, Australia

Researchers with grants

Specialist OS companies – eg RedHat, Sun

Companies using OS – eg HP, IBM, eBAY

Volunteers – amateurs, those with other jobs

Open Content Contributors

Government – public broadcasters, libraries, museums eg BBC, ABC, Powerhouse Museum

Researchers with grants

Professional Artists – Nine Inch Nails, Knives at Noon

Artists using SA material – eg ccMixter


Traditional model = mass market• High cost to make and buy• Need mass audience to

compensate for many failures


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Software Businesses

OS – focuses on providing many products tailored to only a few businesses

Main difference between traditional model and OS = adaptability

Content Businesses

OC – focuses on ‘long tail’ ie many performers selling to only a few fans

Main difference between traditional model and OC = distribution

Traditional model = mass market• High cost to make and buy• Need mass audience to

compensate for many failures


Non-Commercial – is it a big difference?

• Almost all OS products allow commercial use; most OC products limited to non-commercial use

• Both still giving away ‘free’ to main customers – for OS this is businesses; for OC this is private individuals

• Redhat, Sun, Novell etc have premium ‘enterprise’ models – charge higher for ‘business’ level support, warranties etc.

• Commercial for OC = ‘premium product’

• For OC, less incentive to pay for follow up services/quality, so instead charge for more rights


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Sell yourself, not your product

The question to ask is, "What portion of the world knows my brand?" - Jonathon Schwartz, COO Sun Microsystems (CNET, Aug 2007)

Creative Commons is like having 100,000 free publicity officers.

- Pete Foley, Black brow (http://wiki.creativecommons.org/Black_brow)

My fans' tireless evangelism for my work doesn't just sell books - it sells me.

- Cory Doctorow, author (Forbes, Jan 2006)


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Payment

Can be:

• direct eg purchase, advertising

• in-direct eg increased traffic, hyperdistribution


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Can be provided for:

• product eg book

• ‘added value’ eg searchability

• aftermarket service eg maintenance

• publicity eg ads

Can be provided by:

• consumers eg pay-per-use

• producers eg vanity press

• third parties eg advertisers


Promotional tool


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Cory Doctorow

• Books published by Tor Books as both hardcopy and e-books under Creative Commons BY-NC-SA licence

• First book had 30,000 downloads in first day

• Last book, Little Brother, on NY Times best seller list for 4 weeks

• Hundreds of derivative works – translations, audio-books, covers, software projects


“The Internet not only sells more books for me, it also gives me more opportunities to earn my keep through writing-related activities.”


Advertising supported


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Revver

• Video sharing site with embedded advertising – money split 50/50 with creators

• All videos under Creative Commons BY-NC-ND licence – to allow for maximum distribution

• Success story – Eepybird.com’s “Extreme diet coke and mentos experiment” - watched over 6 million times; made US$30,000 in first year

• Now hosting other popular video series, previews etc - eg Lonelygirl15, “ask a ninja”



Charging for premium service


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+


Beatpick

• ‘Fairplay’ music label• All music downloadable DRM free under

Creative Commons BY-NC-SA licence• Sells ‘high quality’ downloads• Negotiates ‘commercial’ licences • Success story – “Memories Child” by Jamison

Young (Australian musician) licensed for “The X-Files: I Want to Believe“ feature film

• Has also licensed material for ads, video games, corporate events, political campaigns



Thanks

http://www.creativecommons.org

http://www.creativecommons.org.au

[email protected]


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This slide show is licensed under a Creative Commons Attribution 2.5 Australia licence. For more information see http://creativecommons.org/licenses/by/2.5/au/.