free thinkers: exploring the economics of abundance

July 26, 2007 at 10:44 pm · Filed under , ,

Making a digital copy of an ebook costs nothing. After the first ebook is created and paid for, there is potentially an infinite number of cost-free copies. Does this abundance of ebooks change how much a person should pay for an ebook? Has it changed how much we pay for software or music, also cost-free to copy?

WOWIO has based its business model on two concepts I have since encountered in Chris Anderson’s book, The Long Tail and Mike Masnick’s work on the economics of free.

Long tail: On WOWIO, there are generally popular books and books that are important to niche groups. With enough books and enough niche groups we see all our books downloaded by someone. As digital storage is much more compact than physical bookstore storage, the only limit to WOWIO’s book collection becomes the ability for a person to find the book they are looking for, and our ability to bring new publishers on.

Scarce for non-scarce: A concept that Mike Masnick proposes is that people can exchange non-scarce goods for scare goods as a way to develop new business models. WOWIO does this by enabling people to download non-scarce ebooks in exchange for sharing their scarce attention with sponsoring brands.

Also Old world: The third aspect of WOWIO’s business model is the that we do not live in a post-scarcity society overall. In other words, while ebooks can be duplicated without cost to the publisher or author, these people still live in a world that is generally not abundance-based. To survive in this old-style economy based on resource scarcity, the publisher and the author must be compensated for their work to cover how much it costs to initially produce the ebook and to also capitalize on the success of the particular work, should it become popular. Thus enabling them to make additional works.

Here, then is a question that I am seeking the answers to:

Is the publisher and the author best compensated by payment from sponsors based on ebook downloads, or do these parties best benefit from the growth of audience through free downloads that are then converted in to something else, like print sales or speaking engagements? Publishers currently get both, but I’m planning on reading the below references and see how these theories align with our practices. Any insights, most welcome.

Mike Masnick
President and CEO of Techdirt. Wrote a beautiful series of posts on the economics of abundance that concluded with The Grand Unified Theory On The Economics Of Free.

What Jefferson noted is the wonderful feature of a non-scarce, or infinite, good that it is effectively a free resource. Once created, it costs nothing to give to someone else, and you still retain the original. In fact, economists have finally realized that this is the very key to economic growth and progress. The infinite resource known as an “idea” that improves what was already there is what increases the size of a market. Or, putting it another way, that infinite resource of a new idea makes an existing scarce resource more valuable. It’s easy to understand that when it’s an idea applied to, say, a machine making it more productive — but it also applies to any infinite resource appropriately bundled with any scarce resource.

Cory Doctorow
Author and co-editor of Boing Boing. He has published 3 science fiction books and released these books for free under a creative commons license simultaneously.

I believe that we live in an era where anything that can be expressed as bits will be. I believe that bits exist to be copied. Therefore, I believe that any business-model that depends on your bits not being copied is just dumb, and that lawmakers who try to prop these up are like governments that sink fortunes into protecting people who insist on living on the sides of active volcanoes. Me, I’m looking to find ways to use copying to make more money and it’s working: enlisting my readers as evangelists for my work and giving them free ebooks to distribute sells more books. As Tim O’Reilly says, my problem isn’t piracy, it’s obscurity. Best of all, giving away ebooks gives me lots of key insights into how to make money without restricting the copying of bits. It’s a win-win situation.

ALSO:

Ebooks: Neither E, Nor Books
Paper for the O’Reilly Emerging Technologies Conference, 2004

A side question to this is the notion that ebooks can drive print sales. I have seen anecdotal evidence for this claim, but I wonder if it is a temporary condition. Should a truly appropriate digital reading device emerge, would the book form factor actually take on the emptied hull of the 8-track-tape, tape, cd, and floppy disk. Or the form of the record, still loved and used by eccentric aficionados and niche professionals, but generally replaced by a digital format.

Chris Anderson
Author of the Long Tail and editor of Wired Magazine. He is currently working on a new book called “Free”. At a recent talk at BEA he mentioned that he would like to give his books away for free as he earns much more from speaking engagements than book royalties.

From 2006 post on the economics of abundance:
Abundance thinking–understanding the implications of “practically free”–is a core competence of our age. It brought us everything from the iPod (”what if storage were so cheap you could put your entire music collection in your pocket?”) to Gmail (”why should you ever have to delete an email?”). Most truly disruptive technologies disrupt because they take a scarcity assumption and, thanks to some technology that generates abundances, simply turn it on its head. Just think VOIP (why should phone calls, which use hardly any bandwidth, cost anything?) or how anyone under 25 uses a digital camera (why settle for stills when you’d rather have the video?)
Also: Post on Chris’ Pop!Tech talk on the Economics of Abundance

Gift economy
From Wikipedia, the free encyclopedia

A gift economy is an economic system in which goods and services are given without any explicit agreement for immediate or future quid pro quo. Typically, a gift economy occurs in a culture or subculture that emphasizes social or intangible rewards for generosity: karma, honor, loyalty or other forms of gratitude. In some cases, simultaneous or recurring giving serves to circulate and redistribute valuables within a community. This can be considered a form of reciprocal altruism. Sometimes there is an implicit expectation of the return of comparable goods or services, political support, or the gift being later passed on to a third party. However, in what is considered to be in the true spirit of gift economics, many times giving is done without any expectation of reciprocation.

Post scarcity
From Wikipedia, the free encyclopedia

Post scarcity or post-scarcity describes a hypothetical form of economy or society, often explored in science fiction, in which things such as goods, services and information are free, or practically free. This would be due to an abundance of fundamental resources (matter, energy and intelligence), in conjunction with sophisticated automated systems capable of converting raw materials into finished goods, allowing manufacturing to be as easy as duplicating software.

The Post-Scarcity Economics/Culture of Abundance Reading List v2.2

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when you stop yelling, i hear you much better

July 20, 2007 at 8:05 pm · Filed under ,

Is it retro or futuristic to live without a television?

I do watch television shows and movies, on my computer–BSG, Heroes, the Wire.

But I got tired of the tv yelling at me.

It seemed the newscasters were always on the edge of hysteria and the commercials kept saying “hey, hey, look at me, hey, hey, hey you, look at me, hey, hey, hey….”.

Same with radio. I listen to NPR, where there is very little yelling. Sometimes there is an underwriting spot, where someone says in a calm voice something about the John D. and Catherine T. MacArthur Foundation or the pharmaceutical company Merc. I was curious about this and checked out NPR’s specifications for on-air-credits.

Credits are 10 seconds long.
Credits include the organization or company name, the name of a subsidiary, operating division or parent company, and additional language which further clarifies the identity of the underwriter. This language may contain:
A neutral description of products or services
A recognized corporate slogan that identifies the company or products
A statement of business locations, a World Wide Web address, or a toll-free phone number
The organization’s mission
A mention of the particular NPR programming being supported (ex: “for coverage of Eastern Europe…”)
The duration of the business or service (ex: “providing services to businesses for over 50 years…”)

I love the neutral voice part.

With the web, I pretty much steer clear of the sites with pop-over ads and flashing banners. The simple text ads placed on google searches strike me as quiet enough. Useful when I need them, but demanding little otherwise.

In my work with WOWIO, we are in an interesting situation of giving high-quality, copyrighted books to people for free, while still being obligated to compensate the authors and publishers that have created these works. We work with businesses that are interested in providing free books to people in exchange for an opportunity to share their message. Like sponsoring an NPR program, we have specification for these sponsors that essentially say that you can talk to people, but please don’t yell at them.

And what we have found from surveys of our readers, is that people like to hear from the people that pay for their books, when they are not yelling, when the conversation includes a give and take of value and information.

It is tricky though. It’s like telling anyone that is used to yelling that a quiet voice is even more compelling, alluring, intriguing. We are working to convince a sometimes skeptical audience of potential sponsors.

Here is the ebook package.

Bookplate …………………………..Sponsor message page

Reader choses to play video, if they want to

The book begins

Title page of ebook ……………Title information

All the pages of the book, uninterrupted

End page of the book ………Closing bookplate with sponsor info

So I’m curious, does everyone win with this proposition? Writers and publishers paid, people having access to high-quality content, businesses sharing their message.

The balance seems to be in the volume.

Is it quiet enough to hear?

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pretty as a picture: WOWIO ebooks on the iPhone

July 13, 2007 at 10:24 pm · Filed under , , ,

So is the iPhone the break-through device that will finally deliver ebooks to the masses ( or the masses to ebooks)?

The iPhone has a lovely, bright, colour, high-resolution screen, and type is near glorious in its crispness. It has the form factor issues down as far as being ready at hand and useful for many different tasks, from making calls, to listening to music, to surfing the web, to watching the latest YouTube video. Why not reading books too?

I have been following this question throughout the blogosphere this past week or so, and there is so much hope. Some of the hope, and hope that I share, is that there is a magical software update in the near future that includes some decent ebook reader type software and a reasonable way to save and access files.

Pre-magical update, there are a few big challenges to the iPhone as an ebook reader:

1. It is currently pretty weird that documents, such as pdfs, can be viewed both landscape and portrait in the Safari browser but only in portrait if accessed through the document viewer via email…which right now is the only reasonable way to get files on to the device that don’t go away if you go off-line. This means that you can have one ebookish type experience with an emailed pdf and a different experience with a browser downloaded pdf.
2. Email is the only reasonable way to get files on to the device that don’t go away if you go off-line.
3. Navigating books by finger scrolling and manually zooming feels like the act of a rather desperate person. Also quite messy, if you like to read and eat popcorn at the same time. Next page/previous page buttons and automatically sizing to the width of a block of text would be most lovely.
4. Bookmarking.

Please software update, come quick!

In the meantime, I have seen some nice work by manybooks.net with their versions for the browser and pdf books. The type is legible and in the browser version some early attempts have been made at creating a navigation and bookmarking method.

As a user experience practitioner at WOWIO, I have been exploring how our books might function on the iPhone. WOWIO books differ from manybooks.net in that they are often highly designed, including refined visual, graphical and font treatments. Additionally WOWIO books include a wide variety of copyrighted books and illustrated comic books, travel guides, and children’s books. The attention to craft and visual design is an important part of our value offering.

Here are some prototype images of how three ebooks available from WOWIO currently look on the iPhone, pre-magical software update. Click on the images to see larger versions. I’ve also linked the books to their pages on WOWIO, but please note that we are still prototyping and the books on the site are not iPhone optimized.

( Taking a picture of my phone was harder than expected, so please excuse!)

Lullaby Vol 1: Wisdom Seeker 01
by Hector Sevilla, Mike S. Miller, and Ben Avery.

portrait

portrait

portrait zoom

landscape small zoom

Avant-Guide Las Vegas: Insiders Guide for Urban Adventurers
by Daniel Levine

portrait

portrait zoom

landscape zoom

Engines of Creation 2.0: The Coming Era of Nanotechnology - Updated and Expanded
by K. Eric Drexler

landscape

portrait

Look through these shots, I’m feeling pretty hopeful about the iPhone as an ebook reader. How about you?

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Working at the park

July 9, 2007 at 1:39 pm · Filed under ,

Park by my house

Last summer it was over 100 degrees for over a 100 days.

This summer it has rained for 40 days and 40 nights…or something like that.

I haven’t really been counting, but there is a lot of rain and rapids in the usually dammed up Colorado River, more commonly called Town Lake. I was driving past a place where it overflowed the banks today. Some how it is stunning when nature refuses to be part of the background of everyday life.

Rain today meant reasonable temperatures. 80s instead of 100s, and life is richer for it.

I am living by the park in this picture. I am in love with the creek that run through this green belt, Blunn creek, that apparently starts in a Walmart parking lot a few miles away. By the time it reaches this point there are turtles gently drifting around below its surface and a few snakes resting on its shore.

We have been finding tiny frogs in the grasses, hip hopping about. Today the park was mowed when A. and I arrived. A chorus of squawky birds suggested a late lunch. We did see two survivor frogs though, unmowed, uneaten, and now unstepped on.

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