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FairShare - Rewarding artists without Copyright

Ian Clarke - 2nd January 2002

Introduction

With advances in communication technology, such as the Internet, and systems like Freenet, comes the realization that copyright law is increasingly unenforceable without seriously curtailing people's freedom to communicate. It has also raised questions about the validity of copyright law itself, and the ideas upon which it is founded, particularly the idea that information is property.

This raises the obvious question of how to enable people to earn a living from the creation of useful information in the absence of copyright law. One obvious solution is to allow those who value a creative work to voluntarily contribute to its creator. The Internet makes such a solution much more likely to be effective, given the ease with which an artist can receive contributions through companies such as PayPal and Amazon. Many people, however, do not believe that such a mechanism will be effective since it relies on people having a wider sense of self interest (if they don't contribute to the artist, then it is less likely that the artist will continue to create). While my personal belief is that this simple voluntary payment approach can work, there are also ways that it can be enhanced to answer this criticism.

Everybody can be the record label

Consider a simplistic view of how a record label operates. They find early-stage bands who are yet to have a wide audience, but who they consider to have the potential to be very successful. They invest money in that band, and if that band does indeed become a success they make a return on their investment.

FairShare essentially democratizes this process. Anybody can "invest" in an artist, and if that artist goes on to be a success, then the person is reward in proportion to their investment and how early they made it.

But where does this return on investment come from? The answer is that it comes from subsequent investors. For example, lets say that you invest $10. $4.50 might go straight to the band, $1 might go to the operator of the system, and the remaining $4.50 would be distributed among previous investors in the band, those who invested more early would get a bigger proportion than those who invested less, later-on.

Of course, most people will not make a profit, but they are rewarded by knowing that they contributed towards an artist that they liked, and helped reward others who believed in that artist, and who may have brought the artist to their attention.

Collaborative Filtering

One of the positive aspects of what record labels claim to do is to filter out the "noise", and present the public with the best of what is available. Of course, this aspect can be mirrored in our scheme. A FairShare operator could provide a randomized list of artists, biased towards those who have recieved more contributions, but with the occasional new act to give them some exposure.

Some answers to common questions:

Isn't this a "Pyramid Scheme"?

I don't think so although I am not a lawyer. The problem with Pyramid Schemes is that they give the impression that you are guaranteed a return, which is simply a lie. In the case of FairShare, we are completely honest about the fact that most people will not make a profit, but those people benefit by rewarding artists they like.

Might there be other reasons why this is illegal?

Of course, any new idea could be illegal (just ask Napster!), it is impossible to tell until it is challenged in court. Having said that, I can't think of any reason why this should be illegal provided that those who contribute to artists are not mislead as to the nature of the system.

How will the maths work?

Good question. There are actually many choices as to how funds can be distributed to investors in an artist. Some of these will allow early-investors to make more of a profit, and some will distribute funds more evenly. We will let the market decide as to which is best.

Won't FairShare operators just become another monopoly?

Hopefully not. We would discourage artists from using a FairShare operator who insisted on an exclusive relationship for this reason. Provided that there is sufficient competition, it will keep margins down, and the free market should lead to the evolution of optimal approaches.

Who thought of this?

This mechanism was developed by Steven Starr, Rob Kramer, and myself as a response to the impossibility of enforcing copyright law without restricting people's ability to communicate. The name "FairShare" is due to Steven Starr. I am not aware of any similar approaches currently in existence.

What has this got to do with Freenet?

Not much, except that the amount of feedback we received in the press concerning Freenet's effect on copyright got us thinking about this problem.

What has this got to do with Uprizer?

Absolutely nothing.

I am keen to discuss this further, what do I do?

I have created a mailing list called fairshare@freenetproject.org for discussion of this document. You can subscribe to it here. All comments should be directed to that mailing list.