Angry Little Tree

One of the pressing issues for the fully-wired generation is how art will be funded. While the RIAA and the MPAA and ASCAP and all the other IP-centric acronym organizations double down on the status quo, the collapse of art-duplication’s perceived value continues. And that collapse (rather than a moral or legal one) is what’s really at the heart of the copy conflict.

Granted, copyright middlemen like record labels and movie studios have made the digital purchasing experience infinitely more frustrating than simply grabbing a torrent from some Romanian warezpron site. And, yes, they’ve also demonstrated that they’re less interested in providing quality product than forcing endless resales to the same customers every time a new device or data format comes out.

The bigger problem is that few consumers believe those middlemen – the ones slinging CDs around the country and cuting deals with Apple and filing lawsuits against Kazaa-using grandmothers – actually provide any value at all. The arrival of infinite cost-free duplication and the proliferation of digital consumption devices have surfaced an unpleasant truth: the risky part of art is the up-front investment required to create it, but historically the revenue stream has been attached to the work required to duplicate it.

That Sounds Brittle

For centuries after the rise of mass duplication, that shell game worked well enough to keep things rolling. You went to the store and you purchased your cassette, and your money went to the people who made the cassette and some of it went to the artist who recorded the song and everyone was happy. Sure, you could dupe up a bunch of copies of that cassette (or photocopy the book, or make VHS copies of that movie, etc.) but that would take a ton of time in addition to the cost of the physical materials. Even without the issue of album art and duplication quality, it was obvious that the physical object you’d purchased had tangible cost and value. Paying for it just made sense.

Digital, as has been noted many times before, turns that upside-down. Duplicating and distributing digital art is so trivially simple that it happens automatically in the process of simply looking at or listening to the art. Despite all the PSAs and educational videos and please-think-of-the-gaffers press releases, the current generation of media consumers responds to “duplication is theft” with justified skepticism. They grew up with computers, and they understand intuitively that duplicating a digital file is not a destructive act. As such, they know that anyone who compares uploading an MP3 to stealing a car is completely full of shit.

The problem, of course, is that underneath their pre-mammilian refusal to adapt, IP middlemen do have one excellent point: without some sort of revenue stream, a much larger percentage of artists would be flipping burgers for a living. Many would stop producing art, or scale back to hobbyist levels of production, or starve to death on the streets. They’d never have the chance to produce their Great American Novel or their folk-rock masterpiece that changes the world or whatever justifies societal investment in art. Great artists may create because they love the process, but everybody’s gotta eat.

If compensating artists is a good thing, but attaching value to the duplication process won’t fly in today’s digital world, what alternatives are there?

Sell Some T-shirts!

Touring and T-shirts is a popular suggestion for bands, but it ultimately falls prey to the same “free steak, expensive sizzle” problems that duplication-centric compensation does. The risky, expensive act is the creative one: selling shirts after the show doesn’t help until you’ve already knocked the creative bit out of the park.

Delicious Fairy Gold

Like Linux on the Desktop, micropayments get lots of attention but little traction. The idea is that a tiny act of consumption (reading a single article, listening to a single song, etc.) could be compensated with a tiny payment. A penny for a page of text, two cents to hear a song once, and so on. It’s promising, but in the real world there are lots of problems. Credit card processing, for example, is expensive enough that anything under a dollar might as well be given away for free. Even worse, erecting high-friction paywalls around each piece of content usually just ensures that no one bothers consuming. And – this is the tricky part – any system capable of securely monitoring and billing tiny acts of micro-consumption is probably just as effective at locking down a large book or movie. Once you’ve built that, why settle for micro payments?

NASCAR Jumpsuits For Everyone?

Advertising has a long and noble history, and it’s the creaky engine powering most of the legal content on the internet at this point. In addition to keeping online journalism’s fluttery pulse going for more than a decade, Google Adsense has funded the PBR-and-ramen diets of a generation of C-list bloggers. Large sites that can deliver reader-eyeballs can make good money, too, and the heavy hitters often sell their own ad space. It’s not all rosy, though: as Karen Mcgrane often says, advertising economics boils down to to print dollars, web dimes, and mobile pennies. The move to mobile is gutting ad revenue, in part because unobtrusive integration on small devices is really, really hard. In addition, it’s an awkward fit for media that users download and consume à la carte: putting ads on a music site is easy, but an artist who sticks bumper ads on each song? Not cool.

And (not to put too fine a point on it) ad-driven media has a tendency to descend into clickwhoring the minute detailed metrics can be gathered. It can make certain kinds of creative work financially feasible, but only for the hustlers who were probably doing a great job of self-promotion already.

Welcome to Art Club

Subscriptions models are part of the mix, too: rather than charging tiny amounts for access to tiny bits of content, they charge a medium-ish amount for buffet-style access to a pool of content. In some situations they’ve been quite successful: Netflix provides all-you-can-eat access to a library of films, and for many people that’s simpler and easier than the hassle of illegal duplication. Newspapers haven’t been quite as successful with this paywall approach; it only seems to work well when the creative works are sufficiently unique, and news coverage from several publications is often interchangable. Music streaming services like Pandora and Spotify have been huge hits among users, though: being able to stream an infinite playlist without worrying about threatening letters from the RIAA is, as it turns out, very popular.

For artists trying to get fund the actual work of creation, though, this model runs aground in familiar ways. First, it still revolves around controlling access to already-created content. Convenient access to a big, legal content library can be compelling, but only the most prolific cocaine-and-meth-fueled creators can pump out enough work to justify their own subscription service. That leads to bundling of work by different artists, which gets us back to the middleman scenario: the subscription/paywall service is making the money selling already-created things, rather than paying for the creative work up front. Second, the money just isn’t there in the buffet model. Spotify and Pandora are user favorites, but the income they generate for artists is miniscule: literally millions of people have to listen to a song before its creators break even on the time it took to record.

Portraits of the King

In the days before the unwashed masses could afford luxuries like art or plumbing, rich folks paid painters and composers to create interesting works. Particularly good artists (or particularly good suck-ups) might secure a patron: someone willing to sponsor their ongoing artistic endeavors in exchange for prestige, exclusive access to the resulting works, or influence over the creative process.

This old model has never gone away, but pop culture never quite connected with it. What’s interesting about it is the explicit connection to the creative process and the resulting output. Unlike copyright-driven monetization, cash is being put down so that something will be created, not to secure a scarce (or legally fenced-off) duplicate of an existing work.

There are still dowsides: getting rich people to fund stuff for their own enjoyment and prestige usually skews towards certain kinds of fine art. Pop culture, odd niches, and culturally significant (but unprestigious) documentaries tend to get left out in the cold. In addition, there are only so many rich people: they’re never going to spend enough money to float the amount of creative output our culture has become accustomed to.

What if there were a way to combine the up-front cash of patronage, its direct connection between making a work of art and getting paid for it, with the broad base of pop culture? How much would you pay for that steak knife?

Enter Kickstarter, The Busking Hat of the Internet

Kickstarter, for those who haven’t been paying attention to their internets, is a web site that gives creators a different, potentially more viable option. They can set up a Kickstarter.com project page, explain what they want to do, and declare the amount of money they’ll need to finish the project. With a couple of clicks, interested users can pledge to support the project at different dollar amounts. If the goal amount is met within 30-45 days, the project is funded, Kickstarter collects the money from those who promised to fund it, and taks a cut before handing off the cash to the project organizer. If the project falls short, no one is charged and it’s back to the drawing board for the project organizer. The majority of funding pledges are small, in the $10-30 range. Calling them micropayments, though, is missing the point.

Many of the early high-profile Kickstarter projects (like the Glif iPhone tripod) were traditional physical products that needed a big cash influx to get out of the prototype phase. Users could watch videos of the prototypes in action, and in exchange for their investment, they’d get the final product before the general public. This kind of micro-investment model has always been possible but Kickstarter reduces the friction. Project organizers still have to drum up interest, make a convincing pitch, and demonstrate that they’re capable of delivering the promised result, but they can do that with smartphone video clips and a laptop, rather than a borrowed suit, PowerPoint slides, and lots of meetings with cash-flush organizations or individuals.

Over the past year or so, however, Kickstarter seems to have grown from “great place to get cutting-edge iPhone accessories” to “potential savior of the arts.” There’s a large and growing pool of small music and film projects being funded at the $1000-5000 level: numbers that are within striking distance for artists with a small but loyal following. In addition, a few runaway hits have caught the attention of the traditional media and raised double, triple, even ten times the amount of money they’d asked for. Performance artist Amanda Palmer famously raised a million dollars for her latest multimedia/music spectacle, and while her existing relationships and contacts certainly helped the bulk of the money came from donations under $20-30. Those people funded her work because they expected her to produce something interesting, not because they saw a finished product and decided to purchase it.

The same model has proven successful for Kickstarter-funded documentary films, music albums, tabletop RPG systems, and computer games. A handful of projects with very, very high goals have also exceeded their initial targets: the ShadowRun Returns and Wastelands 2 projects raised $800,000 and $1,300,000 respectively. Those games will require comparatively large teams of experienced developers and artists to produce, and the payoff for the people who funded them will is more than a year away. In the past, those kinds of projects were the sole domain of companies or rich patrons who could afford to float enough cash to fund the expensive up-front creation process.

And that, as we discussed earlier, is where it gets interesting.

Not Micropayments, Micropatronage.

The revolutionary potential of Kickstarter comes from its ability to bridge that killer disconnect I mentioned at the beginning of this post. Funders spend money to make something happen, not to gain access to something that has already occurred. The most successful projects engage their funders, posting regular updates and offering tiered rewards for those who commit more. Chip in $10, and you’ll get a digital version of the album when it’s released. For $20, you’ll get a physical copy alongside the digital. Drop $50 to get your name in the liner notes, or $100 for a limited edition vinyl version! Some enterprising creators offer funders direct access into the creative process: funder-only message boards where they can watch a game’s development team brainstorm, a signed copy of the book, or a personal chat with the band’s lead singer…

Kickstarter itself isn’t without problems. A few noteworthy projects have gone off the rails after they were funded, and Kickstarter is careful to make clear that there is no assurance that projects will be successful after the money is handed over. In addition, getting a Kickstarter project noticed is just as hard as driving traffic to your web site: the more successful the model becomes, the harder it will be to get noticed in the crowd of projects seeking funding. However, the micropatronage model is a unique historical development. By combining the up-front investment of classic patronage with the broad consumer base of mass market duplication, it eliminates one of the fundamental gut level objections most people have to the current copyright regime. You’re not paying a rent-collecting middleman for the privilege of listening: you’re investing in the creation process itself.

That, in my view, will do more to prevent the devaluation of content than any legal stick-waving. Kickstarter the company my fade away as the Internet’s winds shift, but the funding model it’s helped establish is here to stay.