Monthly Archives: August 2009

Free Business Models and Creative Commons Licences

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I’ve been working on Creative Commons licences for years, and thinking about business models built around open source and free (as in beer) content for just as long. Since I finished listening to the audiobook of Chris Anderson’s Free last week, these topics were fresh in my mind, so it was very timely that CBC’s excellent tech trends radio programme, Spark, invited me to comment on an interview they did with Eric Frank. Many thanks to Spark producer Dan Misener for inviting me to comment. [Below is an adaptation of my comments that Dan posted to the Spark blog.]

Eric Frank is a co-founder of Flat World Knowledge, which Chris Anderson profiled in Free as an example of a company building a business around free textbooks. Listen to the interview to find out how Flat World Knowledge works. In a nutshell, the site provides textbooks free of cost to read online, and charges a variety of prices for the content in different versions, including a cheap, printable PDF file, a more expensive audiobook, a black and white bound textbook, and a full price, full colour hardcover book. They also allow instructors to mix and match content among textbooks to make just the right reader for their own course. Finally, the content in all of their textbooks is licensed under Creative Commons Attribution, NonCommercial, ShareAlike licences.

I love the idea behind Flat World Knowledge and the new business model Eric Frank is carving out of the textbook market. It’s ripe for change. And I’m thrilled that they’re using Creative Commons licences that permit adaptations for their textbooks.

But I think it’s important to distinguish between FWK’s business model and their choice to use Creative Commons licences. Using Creative Commons licensed works to make money is not paradoxical at all. But to understand the role of CC licences in FWK’s textbook business, you need to understand more than the relationship between CC and commerce. First you can look at the apparent paradox of making money by giving it away, and then look at the role of CC licences in that business.

As Chris Anderson says in his book Free, FWK recognizes that the price of textbook content will approach its marginal cost of zero. They’re beating the rest of the market to the bottom, and they’ve developed a terrific business model based on selling the added value — the selections of print versions, audio versions, and subscriptions.

But it seems to me that the choice to use CC licences is not an integral part of that business model. I think they could do everything they’re doing so far — allowing instructors to remix chapters; allowing students to buy different versions; allowing anybody to read the books for free online — without also allowing people to modify the content itself and give it away, which the CC licence allows. They could do all of that with All Rights Reserved stamped on every page they generate.

See, Eric Frank talked about the increased choices that instructors and students have through FWK, but the rights under the CC licence are more broad than the examples he presented. For instance, since you can read textbook content for free on their site, and it’s under a CC licence, you can copy and paste it off the screen and reuse it as desired (within the limits of that particular BY-NC-SA licence). Instructors could copy and paste entire textbooks from the site, modify them as desired, and distribute them to their own classes (under the same Creative Commons licence of course) without ever paying a cent to FWK or the author.

University student societies could buy the PDF versions of texts and provide them through University coursepack services printed on demand for students, undercutting the FWK price. Professors could do the same, modifying content in the texts over the years, gradually keeping books current and adapting them for their own needs, all within the bounds of the CC licence.

[Selling copies may be a sticking point because the CC licences are of the NonCommercial variety, but my own view is that these sorts of sales would be permitted since they are not primarily for commercial purposes. FWK may see this differently of course.]

So why have FWK used CC licences? CC serves at least two purposes for their business model that anybody dealing with free of charge content should consider. The first is that content falling under CC licences becomes part of the knowledge commons. Like an open API on a web app, CC allows content to be reused outside of the original market (education in this case) in creative and unexpected ways. The benefit for FWK and its authors is in whuffie — these downstream uses feed into the reputation economy, turning textbooks with relatively limited distribution into new avenues for authors to promote their expertise in a field.

Another reason FWK may have chosen to use Creative Commons licences is the marketing value of the licences. There is a large and growing community of well connected technorati committed to open source and free content. Adopting CC licences sends a message to that community that FWK understands the importance of Free. It aligns the business with a burgeoning international movement committed to free content and hungry for new business models in the zero cost and reputation economies. Attracting the attention of that community has an undeniable marketing value that likely brings at least a short to medium term benefit to FWK.

Chris Anderson wrote that, in industries where the marginal costs are close to zero, it’s only a matter of time before the price of products will also drop to zero, and he encourages people to beat the competition to the bottom. Flat World Knowledge has clearly done this for their textbooks by nurturing the internet distribution channel where the marginal costs are virtually nil (no paper, printing or postage) and provided choices to reduce the marginal costs for other products (black and white as opposed to colour). All of this reduces prices for textbooks in FWK’s own catalogue.

Their use of CC licences is like a second tier of the same puzzle, reducing margins not for printing and distributing textbooks in their catalogue, but for creating textbook content. Virtually all of the cost of creating textbook content is in the writing, so copyright law keeps the marginal costs of duplication artificially high. Recognizing that the marginal costs are easily reduced through open licensing, FWK has gone straight to the bottom (in a good way) in this race as well. Not only have they reduced prices and increased choice, as Eric Frank said, but they have reduced barriers to the creation and use of content and further strengthened their position as a source of excellent educational content.

Opengov.se – open government data in Sweden

Johnathan Gray over at the Open Knowledge Foundation blogs today about a private citizen in Sweden who is building Opengov.se, a free repository of government data.

Peter Kranz, who runs the site, has been contacted by both civil servants that want help with open data plans and politicians that want advice on how legislation should change to increase the amount of open government data.

He became interested in open government data, after starting to build eurlex.nu, a commentable semantic web version of European Union Legal Information. He was frustrated by the state of existing official websites, so decided to build a new version of the site – but found that he???d have to pay 10,000 Euros to access the data plus 3,000 EUR for each additional language.

As with other European countries, many agencies in Sweden charge for access to raw data. For example, SMHI, the Swedish Meteorological and Hydrological Institute, charges for access to weather data. As a result, people using weather information in their applications get data from the Norwegian authorities instead.

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Restricted Access to Public Contracting Information?

Here’s yet another example of overreaching and copyright, this time by a private company but with government information.

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In Canada, the federal public service manages much of its contracting through a website called MERX. A software developer wants to analyze government contracting but is being told by MERX that they have exclusive agreements with the feds and most provinces, and the information cannot appear in any other service.

The copyright notices at the bottom of MERX pages for Federal contracts (e.g.) say that the posting is under Crown Copyright and that MERX is a licensee. I’ve checked a few provinces, and they all say “?? MERX – All rights reserved” (e.g.).

This is public information under Crown Copyright. When we’re talking about legislative information, or Ministry reports, there may be valid concerns about the accurate duplication of official material, but none of those concerns apply here. And yet, copyright is being used to restrict distribution of this material and, in the process, to essentially create a monopoly for government contracting, MERX, a service owned by private company Mediagrif Interactive Technologies Inc.

That’s not a monopoly on the information about the contracts and Requests for Proposals, however. Information itself is not subject to copyright; only its creative form is. The classic example of this is that photocopying a recipe from a cookbook is copyright infringement, but you can freely rephrase the instructions to make any recipe in any cookbook. Copyright law (in Canada, at least) simply does not apply to the information itself.

Applying that line of thought to MERX, the information about contracts in MERX may be able to be copied freely, being careful to avoid or paraphrase the information in the “description” parts of the postings.

Dissolving the telecoms regulator is a terrible idea: Google Voice, AT&T, and telecommunications regulation

Apple has an exclusive deal with AT&T in the U.S., stirring up rumors that AT&T was the one behind Apple rejecting Google Voice. How could AT&T not object? AT&T clings to the old business of charging for voice calls in minutes. It takes not much more than 10 kilobits per second of data to handle voice. In a world of megabit per-second connections, that’s nothing???hence Google’s proposal to offer voice calls for no cost and heap on features galore.

What this episode really uncovers is that AT&T is dying. AT&T is dragging down the rest of us by overcharging us for voice calls and stifling innovation in a mobile data market critical to the U.S. economy.

This article is bleak about telecommunications competition in the US, but in Canada, the situation is even worse. We have fewer choices, pay more, and have fewer features.

This article by Andy Kessler in the Wall Street Journal points out that the FCC is taking a closer look at competition and regulation in the American wireless market as a result of Google Voice being rejected as an iPhone apps. In the absence of good regulatory oversight, this is a market in which incumbents like AT&T have had the power to keep prices high and limit innovation.

At the same time, in Canada, the CRTC has held hearings on network neutrality and has released a number of decisions on internet service and related issues. Despite this activity — or perhaps as a result of what much of the community perceives as the CRTC’s lack of understanding of the wireless and internet markets for most Canadians — there is widespread frustration with the CRTC.

This week, that frustration took form as a petition calling for the CRTC to be dissolved, initiated by an Ottawa software developer. The petition has almost 1500 signatures as of this writing.

Scrapping the CRTC is a terrible idea — almost absurd, really. The telecommunications and broadcasting markets need to be regulated, and the CRTC is the organization we have to do it in Canada. It may need reform, or more technological expertise, but the idea of dissolving it is counterproductive and utterly without merit.

I will not be signing the petition. I will be watching it, however, and participating where I can in the conversations it sparks on Twitter and on Facebook.

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Revolting blog of the day: This Is Why You’re Fat

Double Bypass BurgerA burger topped with five slices of bacon, four slices of cheese, two fried eggs, mayo, lettuce, tomato, and onion between two grilled cheese sandwiches.(Submitted by Kyle Korchran via thevortexbarandgrill)

Double Bypass Burger

A burger topped with five slices of bacon, four slices of cheese, two fried eggs, mayo, lettuce, tomato, and onion between two grilled cheese sandwiches.

(Submitted by Kyle Korchran via thevortexbarandgrill)

Hilarious and sad at the same time, this blog documents the most greasy, fattening foods out there. Unsurprisingly, perhaps, most include bacon. And as in this particular case, they’re shown served with sides of fried stuff with cheese.

I admit that I love the idea of a burger between two grilled cheese sandwiches… although I feel a little gross just saying that!

Pamela Samuelson on the Google Book Search settlement

In this excellent article reviewing the Google Book Search settlement, Pamela Samuelson explains why the AAP and the Authors’ Guild would be willing to settle with Google at this point, and with a large class of plantiffs.

So why did Google decide to settle instead of to fight? Inspired perhaps by Rahm Emanuel, who has observed “you never want a serious crisis go to waste,” Google recognized that AAP and the Guild would be willing to settle their lawsuits by vastly expanding the plaintiff class to all persons with a U.S. copyright interest in one or more books. The settlement could then give Google a license to commercialize all books owned by the class.

Why would AAP and the Guild be willing to do this? It is largely because the agreement designates the Authors Guild as the representative of the author subclass and the Association of American Publishers (AAP) as the representative of the publisher subclass. This designation ensures that they will have vastly expanded responsibilities and powers to control the market for digital books for which they have been hankering for many years.

Under the settlement, the Authors Guild and AAP are tasked with creating a new collecting society, the Book Rights Registry, which is supposed to find class members, sign them up, and pay them from a revenue stream that Google intends to generate from its commercialization of these books.

Screenshot of basicsystemscannerv6 malware attack underway

Browsing the web, this dialog box popped up warning about malware and wanting to scan my computer. Suspecting a threat from the warning itself (oh yes, I know they can be tricky), I made sure my Panda antivirus was running and let the dialog box do its thing. It loaded up this page (see screenshot) that looked a lot like the My Computer window, claimed to do a scan, and then had me download an executable attachment. That’s where I cut it off.

 These malware threats are very sophisticated, and antivirus software will not necessarily protect you. This reinforces the importance of being suspicious of anything that happens in your web browser

Basicsystemscannerv6_attack

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