This project’s mission is to help musicians, writers, and other artists make a living online — by expanding e-commerce into new business models (including the mass sponsorship described below).
EBay’s success showed the value of connecting people online — but only for trading physical goods. Digital art such as music or video, and other creative content such as investigative news reports, should have similar connection advantages, plus free shipment and instant delivery. But it’s hard to collect many small payments online, and hard to charge when so much quality material is free.
We propose a form of mass-sponsorship distribution to deal with this problem. A sponsorship is prepayment for any number of copies of the particular song or other content that someone wants to sponsor. Sponsors “buy” recognition in, and access to, a unique content-defined audience, and/or advocacy of causes they believe in, more than the music or other content. itself. Each sponsorship is contained in a short Web link, called a ‘smart URL’, which need never expire but can travel indefinitely through social networks, building those networks and supporting the artists as it travels.
Mass Sponsorship
By mass sponsorship, we mean letting anybody (who can pay online) sponsor bulk copies of particular art or information they like — anywhere in the world, any time they feel like it, for any reason. A single sponsorship may be few prepaid downloads, or thousands, whatever the sponsor wants to buy. The sponsorship will let that many people download (or stream) the art for free, just by a click, with no need for any account, registration, log in, or other hassles. The price per download of a song, video, cartoon, investigative news story, etc. can be anything, even very low; 25 cents, 5 cents, even a penny or less could work technically. (A hundred thousand downloads or views at 10 cents each pays $10,000. Sponsoring 500 copies costs only $50, and lets the sponsor reach 500 people. The artists can offer quantity discounts to encourage large sponsorships.
Artists will adjust their prices to balance sponsorships and free downloads. For example, a very low per-download price can keep the the art available free, despite a shortage of sponsorship at that time.
Each sponsor may include a personal message about almost anything, and this message will be delivered to everyone who downloads a prepaid copy that sponsor paid for. The message could be an acknowledgement of contribution to the artists, a product ad, a personal ad, political, spiritual or philosophical advocacy, a joke, encouragement, a blessing or prayer, fundraising for a cause, etc. The message can include Web links, but often will not. Artists can moderate the messages if they want. Sponsors can save a password received when they purchased the sponsorship, and use it to change their message at any time; then the new message will go out to future downloaders.
A sponsor will receive the prepaid downloads “contained” in what we call a smart URL — it looks exactly like an ordinary, fairly short URL (Web link), and is similarly clickable (though it’s not really a URL and is processed differently). The sponsor will receive a new, unique smart URL, and can name part of it. A sponsor who purchased 1,000 prepaid copies, for example, could share the smart URL as he or she decides, urging others to share as they wish, and the first 1,000 people who download the art from that URL will get it free. When all the prepaid copies are exhausted, the smart URL will require payment (usually another bulk sponsorship) before delivering more free copies (prepaid by a sponsor).
A free sample (if provided by the artists) will always be available, even when there are no sponsored copies in the smart URL. Samples will help sponsors decide what to purchase. They will be especially helpful for new work, if no one has sponsored any copies yet.
Alternatively, instead of receiving a new URL, anyone could purchase an existing sponsorship in an existing URL (provided he or she had a copy of it — and in rare cases, a password for the URL might be required). It is not necessary to wait until the URL is empty. A single smart URL can hold and manage any number of active sponsorships simultaneously, each with its own (optional) personal message; when there are multiple sponsorships, priority (and whose messages go out first) depends on options set by the artists.
[Note: Later we will show that a smart URL is actually the name of a financial account, in a clickable form. Clicking the smart URL will take the user to a public dashboard (control center) for that account — allowing the user to do whatever the owner wants to allow, such as downloading a free copy if available, or purchasing a sponsorship to the particular art or other content provided by that smart URL. Meanwhile, the account owner — the artists, in this case — always has access to a private, owner’s dashboard, reached through a secure connection, which provides far more control of the account’s settings and services than the public dashboard provides.]
Scenario: How an Artist Will See The Process
How would a band, for example, market a song this way?
Assume that the software had been developed and is available at a website, which we will call www.automatic-accounts.com. (This happens to be a name we reserved for the purpose. The same software will support endless different applications, of which mass sponsorship is only one. We expect that there will be competing servers, providing replicating accounts but specializing in different uses, music downloads in this case.)
First, somebody representing the band visits the site and opens a new account, usually with the band’s name — for the example, call it OurBand. Now the band has reserved that name on that server.
The band can then set up a management account for a series of its songs; this account will receive the sponsorship payments, among many other things. Assume that the band accepts the system default name for its management account, which could be a 15-digit random number, say 830689841730785. This number will be a secret account name; it will serve as its own password, the system used for numbered Swiss bank accounts. That’s enough digits that if everyone in the world tried 50,000 guesses, all different, the chances are that no one would have guessed your account name yet.
Now, any time in the future, the band can log into its management account by going to www.automatic-accounts.com (which will require a secure connection using SSL, the same security used for credit-card transactions), and pasting the 15-digit number into a box that will be provided on that page. That number reaches the dashboard for the management account, where the band can change all sorts of account options — probably hundreds of options, capabilities, settings, automatic actions, etc. will in practice be available for various purposes, though the band might never need to use or even see more than about a dozen of them.
Using the dashboard, the band will create a new account, of a type we call public account. Every public account is irrevocably restricted at its creation, so that it can take money in, but never keep any money or give any money out; instead, the money coming in is transfered to the parent of the public account (its creator), in this case the management account above.
Since in this example the band wants to market OurSong using this system, the public account will include that name. The full name of the account will be www.automatic-accounts.com/OurBand/OurSong. It doesn’t matter if there’s a slash at the end, or http:// at the beginning; what’s important is to identify the website, the account owner, and the specific account of that owner (who in this case may create similar accounts to market other songs).
The name of this public account is the smart URL we referred to above. Before releasing it into the world, the band will of course upload its song, it’s per-copy price, a free sample if any, additional graphics and promotional messages it wants to use, and certain other options and details.
Another essential step, sometime before releasing the smart URL to the public, is to get approval for the band from the organization that runs the server at www.automatic-accounts.com and provides this line of accounts. The account server will be an important protection against fraud or other malice, which abounds on the Internet — and will develop a public reputation accordingly. Servers have ultimate control of everything of of their accounts does; if they let their accounts be used for fraud, then artists won’t use it and won’t recommend it. In any case, the artists will tell people to take their sponsorships and look for free downloads only to the server they have chosen to use. Permission for small amounts of money, say under $1000, should not be difficult; in the absence of anything suspicious, a valid major bank card may be enough, or other evidence of identity. The sponsor will always reserve the right to revoke or limit the account later if necessary.
While the band could just announce the smart URL for its new song, or email it to everyone they know who may be interested, it might be better marketing to line up some sponsorship first, hopefully enough to provide, say, at least 1000 prepaid copies of the song funded by the initial sponsors. If the band thinks it could get $500 in sponsorships for its new work, for example, it could set its per-copy price at 50 cents or less. If the music is good (or otherwise popular), then some of those 1,000 users will choose to sponsor some more; remember that they also get their personal message out to some of the audience for this song. And the initial sponsors could be recognized permanently if they want to be, for example being listed as such on a Web page of the band — with their personal message included if they wish.
Hopefully with good marketing the sponsorships will sustain themselves, but of course there is no guarantee; not every worthy song is going to make it. Agreements with the sponsors (in the Terms of Service) should allow price reductions later if necessary. For example, if the band started with a price of 50 cents per download but did not get enough sponsorships, the band might reduce the price to 10 cents. Then someone who had sponsored, say, 20 copies for $10 would find their sponsorship magically increased to 100 copies; if all 20 had been used they would then have 80, and their personal message could get to 5 times as many people at no extra cost. We doubt that many will object.
Note that no one but the artist (the band, in this example) needs to know anything about this setup; they will be using a smart URL, but don’t need to have ever heard of such a thing, or know what it is. End users will just click to download free. And sponsors can use standard e-commerce, paying with a conventional shopping cart.
Mass-Sponsorship Advantages
Such distribution offers many advantages to the artists, the sponsors, and the end users. Some obvious, some less so. Here are a few major advantages:
- Free end users download the art totally free and hassle-free, just like now — yet the artist gets paid. These free users, who will never need any account, will be about 98% of all users of this system if the average sponsorship is about 50 prepaid downloads, which seems attainable (especially since large sponsorships count disproportionately in bringing up the average).
- The act of free downloading itself could transfer the money from the sponsorship to the artist immediately — allowing people who have no money to spend to participate in financially supporting the artist, just by hearing or viewing their work.
- Meanwhile, sponsors have many different incentives to mix and match: supporting the artists; supporting art or genre; creating gifts for their friends; supporting a cause; advertising; finding friends who share their interest in particular art; and many more (see our 16 incentives for sponsors??). They can reach a unique audience of people who like a particular work, and also are in the sponsor’s social networks (friends of friends of friends… – not necessarily Facebook, MySpace, etc.).
- Alternatively, sponsors can reach an existing network, defined by the circulation of a particular smart URL throughout the world. That URL could let new sponsors reach an elite or leadership network with their personal message. They could only do so if they had a copy of the URL.
- Smart URLs can do business in many different supported languages, since translating just a few dozen concepts or commands for each language should be enough to let anyone click for free downloads, purchase a sponsorship, hear a free sample, and do other necessary business; artists will use standard names for these commands when setting up a smart-URL template for mass-sponsorship marketing. Then any user can change the language of his or her copy of the smart URL, and distribute copies in the new language, which will remain in effect in those copies until someone else changes the language of their own copy again. The same smart URL can be active in many languages simultaneously. So art can easily follow social networks across national and language barriers. Of course the art will not be translated. Nor will the sponsors’ personal messages — although sponsors can provide translations in whatever supported languages they choose, and these will be used depending on the language setting of each copy of the smart URL.
- When prepaid copies run out, would-be end users will have an incentive to find more sponsors. And anyone will have an additional incentive to become a sponsor then — to get the reputation boost for themselves or their cause, by instantly recharging all copies of that smart URL anywhere the world, in all supported languages, making free copies available again.
- Smart URLs can be emailed without security — or posted almost anywhere, in blogs, websites, Facebook, tweets, etc. — or even printed in a newspaper, or read on the radio.
- Mass sponsorship relies on a few large payments from sponsors, instead of many small ones from end users — greatly reducing transaction costs and inconvenience.
- It provides all the convenience of free downloading — while collecting money from a small minority who can pay and want to do so. They will usually be buying recognition for their sponsorship, or exposure for their cause, etc., in content-defined audiences that they help select.
- There will only be one sponsor’s message with a download — not the clutter of current ad-supported sites. And the free end users may well be interested in what sponsors have to say, since they will at least share an interest in the art, and usually share a social-network connection as well.
- Sponsors can compete with each other and bid up prices to get their message out first — in a hard-fought election, for example. Sponsors have money by definition, and competition could rise to stratospheric levels — greatly increase the income of the artists, which is the purpose of this system. End users will be unaffected; they may see different sponsors’ messages, but their access to the art will still be free.
- Mass sponsorship strongly encourages free sharing of proprietary art among friends, instead of criminalizing it. Sharing not only pays the artists, but also brings their work to the attention of people whose friends think they will like it.
- Artists will have real-time access to data about where their art is going (what countries and cities, for example). Sponsors will have similar data access to data from their sponsorships.
- A back-of-the-napkin of computer processing costs, based on ISP prices, suggests that the cost will be well under a tenth of a cent per financial transaction (including decrementing one copy from a sponsorship). In theory, the price for mass-sponsorship processing could be less than one percent of each sponsorship, leaving more than 99% for the artists — another important incentive for sponsors.
- No money need be due until sales (sponsorships) are made; therefore the artists will not need any money upfront, except for an Internet connection to set up this system, and tell their friends and other interested parties about it.
- There is no “network effect,” no critical mass of users who need to get accounts on this system before it becomes useful. Only the artists will need to set up a new account. End users will click to download free, and sponsors will pay by standard e-commerce, just as they always do. So even if a band, say, were the only people in the world who had ever heard of this system or knew anything about it, that band could still use it successfully starting on day one.
Account Reproduction
to be continued…
Page updated 2009-09-29