How To Have Your Digital Cake And Eat It Too

Behold, today I present you my glorious plan to save the world!

Well, this post is actually my attempt to answer a burning question : “How can we download stuff for free and ensure that musicians, actors, programmers and other people who create stuff still get paid?”. It’s a longish, wistful rant on intellectual property and conflicts between scarcity-based economy and post-scarcity society (The Web), with a few constructive suggestions tacked on in the end. Comments are welcome.

The Problem

What do the following examples have in common :

  • Lawsuits against filesharers and sites that enable filesharing. Case in point : The Pirate Bay trial.
  • Fledging attempts to make the Internet fully monitored, supposedly to stop copyright infringement.
  • People who write great OSS/freeware tools still need to have a “day job” to pay the bills.
  • Ridiculously cumbersome DRM.
  • Buying something through an online content delivery service can cost more than buying the same thing in a physical store. Case in point : Steam.
  • The fact that the owner of 4chan is in debt.

Any ideas? Well, here’s mine : all of these problems are caused by a conflict between scarcity and post-scarcity.

We’re currently at an unique point in time, a time when there still exists a scarcity of many resources but a few resources are becoming effectively free (disk space, computing power, bandwidth… well, almost). This leads to a conflict of intuitions. On the one hand, people realize that copying a file or loading a website costs practically nothing (uses non-scarce resources), so they don’t want to pay for downloaded movies/music/software or pay for using a site like 4chan or Wikipedia.

On the other hand, the producers of value – actors, musicians, programmers, webmasters – have to expend scarce resources to create stuff, even if the end-result is stored in a non-scarce medium. People still need equipment like computers, music instruments, brushes, filming sets, video cameras and other tools of their craft. They also need food, shelter, clothes, transportation, time and perhaps web hosting. You can download [The.Dark.Knight[2008]DvDrip-aXXo.avi] for free, but it cost millions to produce.

In other words, creators need a way to obtain scarce resources in exchange for non-scarce resources. They’ve spent time and money to make something people like and they feel they should get something tangible in return (also, they want resources to make more stuff in the future). Of course, this is intuitively unacceptable to consumers who wonder “Why should I pay for stuff I can get for free?”.

And so it goes.

Bad Solutions

So far, all the attempts to deal with this conflict have only lead to partial solutions at best and crazy abolish-human-rights projects at worst.

  • Artificial scarcity. Yeah, I’m looking at you, DRM. Trying to turn a non-scarce resource into a scarce one seems downright criminal when you consider that this thing we call “progress” normally leads to less scarcity, not more. Also, I’m sure you’re aware of the fact that DRM has so far proven ineffective at deterring piracy and might even push more people towards using torrents as it’s more convenient than dealing with idiotic file protection schemes.
  • Selling merchandise and tickets for live performances. This is a fine practice in it self, but it only works for certain niches and levels of popularity. A band like Sonata Arctica can probably make a decent amount of cash on t-shirts and tickets, but I doubt anyone would pay to see the author of the WordPress plugin WP Super Cache programming “live” (no offense Donncha 🙂 ).
  • Get a job. Of course, the programmers, writers, musicians and everyone else could just get a “normal” job and use that income to support their art, right? That works in theory, but this solution creates more problems than it solves. First, you have to find a job that doesn’t suck, which is no easy feat. Second, you’d have less time to spend on the thing you actually want to do. And finally, there’s one drawback that most people fail to consider – if your day job is in the same field as your “art” (e.g. a programmer working on commercial software to support his open-source projects), chances are it will be subject to the same scarcity vs. non-scarcity problem. Getting a job only shifts the problem to the employer, not eliminate it.
  • Advertising. This is another partial solution that only works for certain niches. How would product placement work in music, and would you really want it to? The truth is people hate ads and can go to great lengths to get rid of them. A website with AdSense on it might get away with it for a while (though a lot of geeks seem to think in an ideal world everybody would be using Adblock), but adware is usually mercilessly eradicated and commercial breaks in streamed videos are seen as a deadly sin. In summary : advertising works, but it’s not the best solution.

A Better Solution?

Any proposed solution needs to answer two basic questions :

  • Where does the money come from? As much as we’d like that, we can’t really get everything for free. So even if we invent a perfect system for dealing with postscarcity in a world that still depends largely on a scarcity-based economy, somebody will have to pay = provide the required scarce resources to the people producing non-scarce stuff. This could be either the consumers, or advertising income.
  • Who gets the money, and how much? This is a problem of resource allocation. You’ve probably heard various rumors that record companies bag most of the income and hand only pennies to the artists. Another example would be mediocre videogames that cost as much as good ones, and the fact that you have to pay up front for movie tickets. Ideally, what you pay should be commensurate with how valuable the product is to you.

My proposal : Whuffie + real money

Imagine a membership service called “PostRep” (from post-scarcity and reputation). This service takes a small subscription fee, say, $20-$30/month. This is where the money comes from (advertising might also be used – more on that later). In return, every member of the system gets the ability to hand out and receive reputation points. You could also call it Whuffie, karma, upvotes, tokens or whatever else you think is cool and marketable. Team accounts can also be created. Each team has to decide on their own how to redistribute points received by a team account as the system doesn’t impose any particular algorithm there.

You can hand out as many points as you like – there is no limit – and you can do it manually and/or automatically. For example, you could give 100 points to the programmer who wrote an open-source program you use, and your music player could automatically give 1 point to the author(s) of each track you listen to. Downloading stuff via the PostRep system would also automatically assign a (configurable) amount of reputation to the creator of the file. This should be fairly easy to integrate with existing rating systems, so that when you rate a movie on IMDB, you also automatically send a proportional amount of points to the team who made it.

What (else) is in it for me?

As a member of this imaginary system, you get free and easy access to the non-scarce values created by any member of the PostRep online system. Music, movies, software, books, whatever else that can be expressed and transmitted digitally. No DRM and other bullshit. Creating a system that actually works would be a huge engineering challenge, but it’s definitely feasible (see also : Steam and similar services).

As a side-effect of the reputation system you can also get a very flexible rating scheme for digital content and even other people. Hell, you could even implement the “right-handed vs. left-handed Whuffie” idea and see how much reputation points where assigned by people you like vs. the people you dislike. Of course, the amounts would need to be normalized based on the total number of points handed out by each individual, but that would be pretty easy from the engineering perspective.

Where’s the money?

So what happens to your subscription fee? Simple – each month, PostRep redistributes the funds to other members proportionally to the amount of rep. points/Whuffie/whatever you gave them. This also means that you get a smaller or larger sum as well, depending on how much rep you got for your work. Popular artists, OSS programmers and the owners of popular websites could even make a decent income.


A more controversial approach would be to make the system partially or wholly ad-supported. Marketers would jump on the possibility to access data on per-user ratings and point transactions, as it would give them the ability to create finely targeted advertising. However, as I mentioned before, advertising isn’t generally well-regarded by users. Making it opt-in might help.

And where’s the catch?…

Of course, there are several disadvantages to this idea, like political feasibility and how the PostRep earnings of popular artists would compare to their current income. I’ve also been (intentionally) vague on how exactly the reputation points would be calculated and normalized. However, I won’t go into details on that today – this post is already long enough as it is 🙂 Feel free to post any criticisms and suggestions in the comment section.

Hmm, I really need to find some illustrative pictures next time.

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One Response to “How To Have Your Digital Cake And Eat It Too”

  1. We really liked your blog and this info on the ad-supported model…we believe in it enough to have just pushed out BETA 2 of our site!

    The Songnumbers Team

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