Revenue Sharing

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If content is created 'at the edges' by multiple authors, and if the participatory platforms are living of the content created by all, it makes sense to develop revenue sharing schemes that benefit the individuals, communities and corporate organizers of the platform.


Discussion

One way revenue can be shared is by investing Profit back into the platform while insuring that investment eventually becomes the real and divisible Property of the Consumer who paid it.

Is it fair to profit from Peer Production?

The following is a reaction, which appeared on the Oekonux mailing list, to my query of whether the buyout of core open source leaders could not be seen as an unfair profiting, and if the creation of cooperative ventures would not be a solution.

According to Benjamin Mako Hill, a well-known figure in the free software movement, it is in fact not a problem at all.

Excerpt:

"My question was: "Well, imagine the following two situations, I hope that makes the distinction clear. So there is a given open source project, with a core of lead programmers and a multitude of small contributors. Some venture capitalist is interested. Two options are open:

- some of the leading individuals "sell" their leadership and expertise of the project, and become rich in the process

- a cooperative is created so that all contributors may more fairly share in the possible proceeds"

Reply by Benjamin Mako Hill: "What do you mean by "sell"? People are usually paid to either work on another project that is based off of the original project (i.e., a fork) or to continue doing what they doing but to do it more frequently. It's perhaps also worth noting that becoming rich is hardly the rule. Part of the problem is that the voluntary nature of the work makes the contributions incredibly difficult to quantify. Things are just too ad-hoc and quantification schemes (e.g., lines of code) don't work andqualification schemes don't scale. Let's take Debian for example. Few developers seem happy with the idea of breaking up the spoils down the middle when some people are doing orders of magnitude more than others. Of course, quantifying and ranking that work is also incredibly problematic. We can also add to this the complication that many people who are contributing are already doing so as part of paid labor that is tangentially related. Things get messy fast and I've never seen a free software project introduce paid labor successfully. As far as I'm concerned, large projects are better off not paying *anyone* and by letting outside organizations and individuals handle this.

I've documented a bit of this in an essay I wrote on financing voluntary free software projects: http://mako.cc/writing/funding_volunteers/funding_volunteers.html

The problem is to find ways to avoid that a few benefit from the work of the many. I think one issue is that situations are not always read this way by the participants. When another Debian developer gets a job based on his work on Debian, I feel happy -- not like I'm getting ripped off. When I cut code, I don't do it with the idea that I'll get stock options out of it in the future. If that were my interests, there would be other ways for me to spend my time." (http://mako.cc/writing/funding_volunteers/funding_volunteers.html)


Corporate rationale for accepting revenue sharing

The YouTube case, explained by Nicholas Carr at http://www.roughtype.com/archives/2007/01/youtubes_strate.php


Why you should not pay for non-reciprocal peer production

A contribution by Evan Prodromou, who heads Wikitravel [1]:

"In the world of commercial wikis, the idea is often floated that all contributors should be paid for their efforts. I think this is a bad idea for a number of reasons. I've outlined them below.

1. Payment as disincentive. In his interesting book Freakonomics, economist Steven Levitt describes some counterintuitive facts about payment. One of the most interesting is that charging people who do the wrong thing often causes them to do it more, and paying people to do the right thing causes them to do it less.

The best wiki editing is done by people who believe in an important and powerful cause. As so many Open Content wikis show, people will move mountains to achieve a noble purpose. If you mix in money, you've instead changed the main motivation to $$$. You direct people _away_ from any noble purpose you have, and instead towards grubbing for dollars. What kind of people, and work, will you get out of that?

2. Low payment a disincentive. When people work for a noble purpose, they are told that their work is highly valued. When people work for $0.75/hour, they are told that their work is very low-valued. Which kind of work do you want to do?

3. Legalities. Speaking of payment: if you engage in an employment relationship with unknown, self-selected people from any country in the world, for any amount of money, you're going to have to fight your way through labour laws and tax issues all the way to bankruptcy.

4. Market economics. If you have open content, I can copy your content to another wiki, not pay people, and still make money. So by paying contributors, you're pricing yourself out of the market.

You don't have to pay people to do what they want to do anyways. The labour cost for leisure activities is $0. And nobody is going to work on a wiki doing things they don't want to do.

5. No fair system. There's simply no fair, automated and auditable way to divvy up the money. If you do it by character count, you leave out all the people who engage in discussions, improve content by editing and thus deleting characters, or make hugely important changes with just a few characters. If you do it by number of edits (or non-rolled-back edits), you judge tiny and insignificant edits equal to large, well-thought-out and very productive edits.

Decisions about the relative value of different contributors to an article is too complicated to do automatically. But if you have a subjective system -- have a human being evaluate contributions to an article and portion out payments -- it will be subject to constant challenges, endless debates, and a lot of community frustration.

6. Gaming the system. People are really smart. If there's money to be made, they'll figure out how to game your payment system to get more money than they actually deserve. They'll use long -- no, lengthogonous -- words pointlessly to jack up their word count. They'll set up robots to twiddle out-of-the-way pages. They'll work on "hot" pages to get more share of the higher profits, ignoring low-volume pages that need a lot of work.

You'll end up in an antagonistic relationship with your users, rather than a cooperative one. They'll be trying to get as much money out of you as possible, and you'll be trying to give as little as you can to them -- or at least only get them to work on what you want.

7. Paying for friends. If you can't convince people that working on your project is worth their unpaid time, then there's probably something wrong with your project. People are going to be able to sense that -- it's going to look like a cover-up, something sleazy.

If you think you need to pay people to work on your wiki, then you're doing something wrong. Instead of trying to force your users to align with your business interests, by paying them, you should re-align your business interests to be more in tune with what potential contributors want and need. You shouldn't have to pay for friends, and you shouldn't have to pay for wiki contributors." (http://evan.prodromou.name/Paying_wiki_contributors)

Alternative Options to direct payment

Evan Prodromou:

"Why should we work on this wiki if you make money off of it?" The facile answer, "We'll pay you to work on the wiki," is unworkable. So what other options are there?

The important thing to remember about this question is that it's not really what people want to know. They want to know, "Why should we trust you to be the steward of our work?" and "Aren't your motivations different from ours?" and "Are we being duped into working for free by an evil, manipulative entity?" There are a lot of other ways to answer these questions and reassure your contributors of your company's good faith.


  • Be Open. If you have an Open Content wiki, then anyone can make money off of the work there. Let your users know that they're welcome to use the content, just like anyone else, to make extra dough. Encourage creative re-use of the work, for commercial or non-commercial purposes. The more that contributors understand that the work they do belongs to the whole of humanity, and not just your company, the more likely they are to participate.


  • Donate. Set aside a good part of the profits from the site (if there are any...) to donations to related charities. Donations to Creative Commons, the Free Software Foundation, and Wikimedia Foundation are probably all good candidates. There may also be domain-specific charities you can contribute to; if you have a site about pets, say, you could contribute to the Animal Rescue Network.


  • Sponsor. There are a number of wiki-related events that happen each year: RecentChangesCamp, Wikimania, and WikiSym. They could all use sponsorship. Your users will appreciate your association with these events. wikiHow has done a great job with this.


  • Thank-you gifts. If you'd like to reward contributors for work on the wiki, consider giving thank-you gifts instead. "You've done a great job over the last few months -- can I send you a WikiWhatever T-shirt?" Other possible gifts would be gift-certificates for online bookstores or sponsored (or partially-sponsored) trips to wiki conferences. It's important not to make the gifts seem like payment : "You have reached level 4 of WikiWhatever contributor status after 1000 hours of work, and we are sending you a coffee mug." Thank-you gifts should be in the spirit of the BarnStar.


  • Hire from the community. If you've got really, really good people working on your site, and you want them to continue, hire them. Wikia does a really good job of hiring active users.


  • Pay bounties. This is an option that's worked well in the Open Source community. Companies will often pay a developer to implement a feature, fix a bug or build a plugin in an open source project that wouldn't otherwise be a priority. If there's a job that needs to be done on your wiki, and the community isn't interested in doing it, offer a bounty to get it done. (Wikipedia has a loose system for third-party bounties that end up as donations to the Wikimedia Foundation, or rewards that go directly to the contributor.)"

(http://evan.prodromou.name/Paying_wiki_contributors)

Examples

Video-sharing services

Scott Kirsner, the author of the recommended Future of Web Video book, has compiled an extensive comparative list of the revenue-sharing schemes of the video-sharing sites, at http://www.scottkirsner.com/webvid/gettingpaid.htm

Here is the source material on the sites themselves:

  1. http://www.addictingclips.com/CashForClips.aspx
  2. http://one.revver.com/revver/go/ makers+artists+wanted
  3. http://www.turnherefilmmakers.com/ become_certified.html
  4. http://www.metacafe.com/producer_rewards/
  5. http://www.customflix.com/Services/VideoDownload.jsp
  6. http://studio.brightcove.com/
  7. http://www.current.tv/make/vc2/pods
  8. http://www.greencine.com/static/filmmaker/ filmmaker_submission.jsp
  9. http://www.expertvillage.com/submit/login.aspx
  10. http://www.eztakes.com/store/info/sell.jsp
  11. http://info.break.com/static/break/subPages/getPaid.html
  12. http://www.blip.tv/faq/advertising/
  13. http://stage6.divx.com/faqs
  14. https://www.cruxy.com/help/viewer.jsp?topic=Seller_FAQ
  15. http://www.dovetail.tv/dovetail-news/ Dovetail-to-Pay-Indie-Filmmakers-for-Each-Download-22.html
  16. https://www.lulu.tv/signup.php
  17. http://www.grapeflix.com/Index/frmWorkCost.aspx
  18. http://www.eefoof.com/howitworks.php
  19. http://www.panjea.com/earnings/
  20. http://www.si-mi.com/Faq.aspx
  21. http://www.hungryflix.com/hungryFlix_works.php


Revver

URL = http://www.revver.com/

Citation from Revver video-sharing network:

“We believe in your talent and your right to share it with the world on your terms. We connect makers, sharers and sponsors of internet video in a free and open marketplace that rewards them for doing what they do best. Revver is a completely free service. We want everyone to post his or her video. We make our money by partnering with video makers and sharing in the advertising revenue.” (http://www.revver.com/)

How it works: members upload their video to Revver, who then attach a brief ad to the video, as well as tracking software. Every time an ad gets clicked, Revver shares the ad revenue on a 50/50 basis. The video's performance can be tracked through a Revver account - showing how many times a video is watched, and how much money has been earned. Since ads are attached to the video itself, there's no restriction on how videos are distributed.

Break.com

URL = http://www.break.com/

"the company announced that it is nearly doubling the amount of money paid for original user-generated content. Prices are up to USD 400 for regular videos and up to USD 2,000 for short film productions, animated films and games. Users can upload as many original videos as they want. If the material is published on Break.com's homepage, they can rake in the cash." (http://trendwatching.com/trends/gen-cash.htm)


Metacafe

URL = http://www.metacafe.com/producer_rewards

"5 USD for every thousand views their video gets on Metacafe. Payment starts when a video reaches 20,000 views and has a rating of 3.00 or higher. Licensing is non-exclusive: makers retain ownership of their video." (http://trendwatching.com/trends/gen-cash.htm)


More examples in video-sharing

"EEFOOF | Video/pics sharing site Eefoof shares a percentage of ad revenue with its members, based on traffic to the content they've uploaded.

FLIXYA | Video site Flixya shares 50% of advertising revenue generated by a member’s video, but requires that members have a Google Adsense account.

SEEMETV | SeeMeTV, a service by 3G telco operator 3, lets users submit a 12 second video clip and get paid every time somebody watches their clip. Submitters are asked to upload anything that is ‘dumb, freaky, or just plain rude'. Some of the most popular downloads so far include pretzel girl -- a real-life office contortionist, and the “world's first” wedding proposal over video mobile. Over 100,000 videos have been posted, leading to more than 12 million downloads since the service launched a year ago.

MYNUMO | In the US, MyNuMo lets members create, show and sell all kinds of mobile content: videos, ringtones and wallpaper are sold for USD 2 a piece, 20% of which goes to the content's maker. To promote their own creations, members can use a NuMoMatic tool to sell content to mobile users straight from their MySpace or blog pages." (http://trendwatching.com/trends/gen-cash.htm)


Cash for Writing

Examples in Citizen Journalism

The article in Trendwatching on Generation Cash] gives a list of examples in Citizen Journalism


"At Scoopt, photographers receive 50% of the selling price of their pictures, while ScooptWords shares 50% of the first sale and 75% of all subsequent sales with its writers/bloggers. ScoopLive shares 85% of revenues each time they license a contributor’s photo. SpyMedia pays an average of 100 USD per picture."


More examples in writing

3 examples mentioned in Mashable

"Blogbursts: Want to get paid for blogging? Blogburst syndicates blog posts to news sites like the Washington Post. The top 100 users get paid between $50 and $1,500 per quarter.

PayPerPost (link): Although controversial among bloggers, PayPerPost pays you to blog on certain topics suggested by advertisers. In some cases, you don’t even need to disclose that you’re being paid. The amount depends on the popularity of your blog, but it can be in the hundreds of dollars per post. ReviewMe is a rival site that does a similar thing, although some consider it to be slightly more ethical. Likewise, CREAMaid has a similar idea.

ScooptWords (link): A spin-off from Scoopt, this service offers a button to place in your blog sidebar. Media companies - like a magazine editor - can click on it to buy your posts right away." (http://mashable.com/2006/12/14/19-ways-to-make-social-sites-pay/)


Cash for Photos

From an article in Mashable


"Scoopt, ScoopLive and CellJournalist: All these sites offer to buy your newsworthy photographs, sell them to media companies and send you a cut of the revenue. Scoopt is receiving the most buzz.

SpyMedia (link): This Scoopt rival also sells your photos, and offers “bounties” when you supply photos that media companies are looking for. What’s more, they supply a widget to promote your photos on your blog or social networking profile." (http://mashable.com/2006/12/14/19-ways-to-make-social-sites-pay/)


More Examples

Innertee, at http://innertee.com/

The Bumper sticker cooperative at http://www.bumperactive.com/custom_bumper_stickers.jsp. See its explanation

Commentary on the two examples above here at http://www.weblogsky.com/archives/001066.html


More Information

Such schemes are monitored by Pete Cashmore at http://mashable.com/category/revenue-sharing/

Here's an overview he made of 19 money earners

Trendwatching has an overview (December 2006) at http://trendwatching.com/trends/gen-cash.htm

Examples of some 'peer reward' schemes implemented by legal musical filesharing systems:

Peer Cash, http://www.peerimpact.com/peercash.html

Peer Reward, http://www.gridnetworks.com/?section=solutions-ol-rewards