This page includes a step-by-step example of how a band might use RepliCounts to distribute a song by mass sponsorship, and get paid for it (when the software is ready). Read the short Introduction and Summary section first, then the Background section below on the smart URL. [Note: square braces show more advanced stuff that can be skipped.]
Background on “Smart URL”: It Can Circulate and Do Business
A smart URL is a clickable, public name of a RepliCount (or other replicating financial account). It can circulate semi-publicly through social networks, and/or be published for anyone to use. It can do business with the public, as instructed by its owner (the band, in the example below).
For instance, artists, writers, or others could use a smart URL to sell sponsorships to a song or other digital content. If somebody buys a sponsorship of 100 prepaid copies, then the smart URL will give free access to the first 100 people who click it (and also choose to download the art it delivers). Clearly the smart URL must keep track of how many prepaid copies remain in this sponsorship, and also of the sponsor’s personal message (if any) that goes out to everyone who downloads one of these prepaid copies. The smart URL needs to keep other information as well.
A smart URL can hold any number of different sponsorships simultaneously. Each of these sponsorships delivers the same song or other content (for different content, one would usually create a different smart URL). Only when all the sponsorships are exhausted will the smart URL require payment before providing any more free downloads. And at that time (or at any other time), anyone can add a new sponsorship (which will immediately revive all copies throughout the world of a smart URL that had been exhausted, so that they will start giving out the free downloads or other content again, to the extent of the new sponsorship, and any others received by that smart URL.)
[Security Note: For security purposes, a RepliCount must be “born” with the ability to have a smart URL — or they can never have one. Those born with the ability are called public accounts, and they are also have an irrevocable restriction: public accounts can take money in, but never give money out (they can give premium content in return). Instead, a public account immediately transfers any money income to a secret, irrevocable destination (often to another, mores secret RepliCount, not a public account). Public accounts never contain money and can never give any out, even to the account owner (except through the irrevocable destination); no matter what else happens, the server will never release any money to a public account. The reason for the restriction against paying is that public accounts will circulate widely, and the fact that they will never give out any money should greatly reduce incentives to misuse them. [Supermaster Accounts: Therefore, theft of the full owner’s access to a public account (but not the irrevocable destination — the only copy of which may be kept securely in an office safe; it will not even exist on the server, which will keep a hashed, encrypted version instead) will not result in financial loss. Also, the account owner hopefully will have set up a supermaster account, explained later??, to change the account credentials and take back control from the thief (or in case access is lost) — necessary since the smart URL might be circulating widely, and the thief could harm the owner by changing the account’s public interface, even without being able to steal money. Note that supermasters can have a hierarchy of any depth. A major use of the supermaster will be to give control of some or all of your affairs to a trustee (whatever degree of control you choose), who can then use it even if you are wiped out unexpectedly with all your records. But if you are still around, you can take back the control at any time, even after the trustee has misused it. All this can happen immediately, as often as desired, with no need for the delay and expense of legal process.]
Many copies of the same smart URL can circulate through social networks around the world — accepting purchases of sponsorships (paid by credit card, PayPal, etc.), and delivering those sponsored copies as free downloads to anyone who wants them and is in the informal social networks to receive the URL (together with the sponsor’s personal message, if any). As we will show later??, each copy of the smart URL can be set to do business in its user’s choice of any supported language; there could be dozens of business languages in a mature RepliCounts system. All the copies can be doing business in different languages simultaneously, and each copy will stay in whatever language it is set to, unless somebody changes its setting to another language. Therefore, since social networks often cross language barriers, a song composed and performed in one part of the world could find a following somewhere else, even if nobody involved speaks both of the languages. [The language choice will control the standard messages output by RepliCounts itself, and also include a few dozen phrases for artists or other account owners to use as needed in setting up their public dashboards. By restricting themselves to these phrases, the account owners can assure reasonable translation into any of the supported languages. Other content will not be translated, unless a separate system such as Google Translate is used. Incidentally, the language choice will appear in the smart URL itself, e.g. en.server.com, es.server.com, or de.server.com; if none is specified.]
Basically, a smart URL allows convenient public access to whatever account services and content the owner chooses to make widely available (to anyone who has the URL, which is basically public, though it might be restricted somewhat). Clicking the smart URL brings up a public dashboard (a minimal control center), showing options that allow the user to do whatever the account owner wants to allow, such as: (1) obtain a free download (or streaming) of a song, etc. if a sponsored copy is currently available; or (2) purchase another sponsorship to provide any number of additional prepaid copies of that song.
The smart URL has other tricks up its sleeve. For example, the smart URL can replicate (reproduce) — creating a new smart URL that sells the same song. This lets a new sponsor share his or her paid copies with his or her own friends, business partners, and social networks (friends of friends, etc.) exclusively — and not also share with everyone else in the world who happened to have a copy of the original (parent) smart URL. But some sponsors will want just the opposite — to get their personal messages into an existing semi-public network that may include thought leaders or other key people, by purchasing a sponsorship in a smart URL that is already circulating (the network is defined by whoever has a copy of the URL). However, no person or computer on Earth could know the exact audience a particular smart URL will reach.
We call this kind of distribution mass sponsorship, because anyone can be a sponsor, any time, as much or as little as they want. With mass sponsorship, anyone in the world who can pay online can support any particular song, video, photo, drawing, painting, poem, investigative report, database access, or other online content that moves them — and can target their personal message to people who probably like the content, and also are part of social networks chosen by the sponsor. With mass sponsorship, end users just click to download free — like they do now, with no registration, log in, or other preliminaries — only this time the will artists get paid, often by the act of free downloading itself.
Fortunately, due to social-network distribution, the practical size of a sponsorship is unlimited; even a huge one can make sense, if someone can pay for it and thinks it through. For example, a sponsor could purchase and use, say, 50,000 prepaid copies of a particular song, without needing to know 50,000 people to give them to; this sponsor might email the smart URL to a few dozen or so personal contacts likely to be interested, who can then share it with their friends of friends, etc. The smart URL will give free access to what would otherwise cost money — and which a third party cared about enough to pay — distinguishing it from the overload of free URLs passed around in emails. However, unless the song becomes popular, 50,000 people will never hear it (despite the free access to premium content), or see the sponsor’s message. So sponsors will need to use judgment — which could include even include some promotion of their own, making it more likely that many people will hear the band’s work and see the sponsor’s personal message. (We call it a personal message because it can be about almost anything, not necessarily relevant to the music or other art that carries the message, or to any other existing context. The artists who own the URL can moderate the messages in advance if they want — or kill messages they don’t want, automatically refunding any remaining money to the offending sponsor, provided that he or she specified a means to refund the money — such as another RepliCount, or an address to mail a check for the unused sponsorship, minus the cost of the check.)
Note that mass sponsorship strongly encourages sharing in most cases, since the sponsors who are paying for it get their message out better that way. That’s why the smart URL can be emailed with no security, allowing hassle-free sharing and distribution. All someone could steal from a high-value smart URL would be thousands of identical copies of the same file, and even that would take some work.
On the other extreme, a sponsor could prepay just one copy, as a gift for a friend. The particular insecure email that transmits it probably won’t be compromised and used just to download a song. If it is, the giver could just sponsor another copy in the same smart URL, or in a different one.
Example: Band Using a RepliCount to Distribute a Song
For this example, we assume nothing except that a working RepliCounts server exists somewhere (call it www.automatic-accounts.com, which happens to be an address we reserved for this purpose, for a proof-of-principle system).
Assume that there is no other RepliCounts software anywhere in the world, no client software, no apps, no extensions — just standard operating systems, browsers, and smart phones. Also, assume that no one in the world outside of the band has ever heard of RepliCounts, let alone has one. We want to show that this system can work successfully for the first user from day 1, with no need for any network effect, any critical mass of users.
So the new RepliCount created below will be the first one in the world.
Creating a New RepliCount
To begin, a band member or someone else representing the band will visit a RepliCounts Web site, call it www.automatic-accounts.com, and follow new-user instructions on that page to set up an online account. This site, using SSL or other standard encryption, will suggest a secret account name for this management account (such as a 15-digit random number); the band can override the suggestion and provide its own secret name if it chooses. The band could have a password as well, but for our discussion let’s assume that the band considers 15 digits difficult enough to guess (even if everyone in the world tried 50,000 guesses, all guesses different from every other, most likely no one would have guessed the number — and computers cannot use brute force to guess, since only the server can tell if a guess is correct, and there’s no way to send it billions of attempts). This 15-digit random number will be the name of world’s first RepliCount. (We prefer numbers as the secret account names, for convenient telephone entry, and also for international use, since all major languages use the same numbers; also, random numbers make it easier to compute how much security you’re getting for a given length. But the band could reject this default and create its account name in English, Chinese, or whatever.)
Security
Because of the fraud tsunami on the Internet and in the modern business world, the band may need to be approved by the organization running the server before its account becomes active; this process should be as easy as possible (for example, proof of identity of the person opening the account, and perhaps a small fee like $1 to prove a valid bankcard) — depending on what is found necessary to prevent fraudulent or other malicious uses (such as selling someone else’s music without permission). Note that only the band’s manager (or other seller) needs to authenticate like this — not the artists themselves, not the sponsors who pay, and certainly not the end users who downloads free.
The operator of each competing server (each one offering a separate series of RepliCounts or other replicating accounts, and usually specializing in a different set of services) will have a public reputation, and this server reputation will be an important part of RepliCounts security; artists or other merchants will ask sponsors to use only the one server they use and trust, in order to purchase prepaid copies of their art. A server’s reputation will depend on the company it keeps, and especially on avoiding abuses when possible and quickly stopping them if necessary. Since only the sponsors put money into this system, and there are relatively few of them (we guesstimate that sponsors will be around 2% of all users, with about 98% only downloading free), the public education of sponsors should go a long way to preventing bad actors from stealing from this system. People are already culturally primed to be careful about where they put their money, and to be careful about the Internet, which should make this security education even easier.
Setting Account Options, Using the Owner’s Dashboard
Now the band can set options for its new RepliCount, using the account owner’s dashboard (also called a control center), which every RepliCount has. To log in to the dashboard, someone who has the account name visits the secure site that serves the accounts (for example, www.automatic-accounts.com as explained above), and pastes the account name (the 15-digit number in this case) into a box provided. A password could be required as well; we chose to default to the numbered-account system (like the traditional numbered Swiss bank accounts), because when many accounts are regularly being opened and closed (created and destroyed, more or less), it is easier to manage one field, and paste one field into a form provided, than to also manage passwords of many new accounts. Why put up with the inconvenience of multiple fields as used for credit-card purchases, when one field can be made as secure as you need for almost all uses, and other security measures better than passwords, such as two-factor authentication, can be used for the rare exceptions? In most cases, the secret account name itself will also serve as a password.
At the account owner’s dashboard, the band’s representative could control dozens or hundreds of different services and options available to any RepliCount on that particular server. Fortunately, the band will need to know about only a handful of them; most of the others will never be turned on for this use, but are there for other account owners with different needs.
In the dashboard’s section on content distribution, the band reserves its own name on that server, for public, online use. For this example, assume that this name for the band is OurBand). Now the band has a clickable public address, www.automatic-accounts.com/OurBand. (We strongly recommend that RepliCounts servers ignore capitalization anywhere in a smart URL, so that artists can capitalize for clarity without forcing people to remember what has been capitalized.) The band might put miscellaneous public information on that page, or it could put nothing there.
Since the band currently has a song to sell, it needs an online name for it — maybe the exact title of the song, maybe something easier to type, maybe the user’s choice of either one. For this example we’ll call the song name OurSong.
By making this choice at the dashboard, the band has now created the world’s second RepliCount — a smart URL with the public, clickable name www.automatic-accounts.com/OurBand/OurSong. The band’s representative will receive from the server a new 15-digit number as the secret name for that account, so that the account owner (the band) can let employees, etc. log on to manage that one particular song, without necessarily also giving them control of all the songs that the band sells on this server. The master-account login information (the first 15-digit number created, noted above) can be stored away for safekeeping, and only used only to create new accounts for new songs, or used in an emergency; from that master account, the private account names (logon information) for all songs of that band will be replaceable, avoiding problems if those secret account names/numbers get lost or misused.
[If the band’s master account gets lost, no problem either — provided that the band’s business manager or accountant used that master to generate a super-master that can control it, and stored the super-master in a different safe place.]
The public account is of course not ready for use until the band uploads the song it wants to sell through this account (it will use a separate account for each song, or possibly collection of songs). To upload, someone in or working with the band visits the song’s private dashboard (using the 2nd 15-digit number above) and selects an Upload option. The server may also recommend providing a short free sample — which the band could easily provide simply by checking a box to play the first half-minute or whatever of the song, instead of the better but more difficult choice of recording a new composition for the free sample, to better highlight the full song. Even though the whole song is free the sample still matters, as it does not decrement the number of sponsored copies remaining — and also it provides the most efficient way for the end user to screen unfamiliar music.
The band also needs to set a per-download price. For this example, say that the band picks $.50 (50 cents). And for the simplicity of our example, assume that the band decides not to offer quantity discounts, so it does not check the quantity-discount option at the dashboard.
Outreach
Now the technology is ready, so the next step is outreach to people. So far there are no free (prepaid) copies of the song, so the natural first outreach is to potential sponsors. One place to start might be people the band members know who might want to help, such as friends, relatives, or colleagues. The band could set up its own sponsorship with 20 copies or so, to send free access to potential sponsors who want to listen to the music first. Or the band could contact their existing constituents (fans). Another option would be to just add, say, 100 free downloads, first come first serve, then give people the smart URL that contains them.
It might be a healthy tradition for bands to sell at least one initial sponsorship before free copies go out (except to likely sponsors). There is distinction and other advantage to being the first sponsor, making that sale easier. If the band simply cannot sell any sponsorship to anyone, then it needs to re-think what it’s doing. Unpaid distribution might work better for that song.
As noted above, any sponsor can optionally add a short personal message to everyone who downloads a copy that sponsor paid for. For example, the sponsor might use this message to promote his or her own music. Or an organization could announce an event that might appeal to people who like the band’s song. Or an arts organization could give the band a grant in the form of a sponsorship purchase, which will not only fund the group but also introduce its music to new listeners — and use the personal message to introduce the arts organization as well. There are all sorts of incentives for sponsors (who can be donors, or advertisers, supporters of a cause, and/or can have other relationships and roles).
Suppose a potential sponsor wants to put in $50, due to one or more of the 16 incentives, or for other reasons. The above pricing ($.50 per copy, no quantity discounts) means that this sponsor could buy 100 (prepaid) free downloads of the particular song. Also, the sponsor might want to help the band, and could contribute any amount this way.
If it turns out that there are too few or too many sponsored copies to balance end-user demand, the band can strongly push this balance by lowering or raising their prices for future sponsorships. For an extreme example, dropping the price from 50 cents to 10 cents per copy will not only make sponsorship more attractive (since the sponsor’s personal message can reach five times as many people for the same price), but also make any sponsorship go five times as far. These two effects work in the same direction, giving the band powerful leverage to correct a sponsor/end-user imbalance if necessary.
Back to the current sponsorship of 100 copies, perhaps this sponsor wants to send out a message supporting a cause. The way the sponsor makes the purchase is to click on or otherwise enter the smart URL www.automatic-accounts.com/OurBand/OurSong. Like anyone else who clicked, the potential sponsor would reach the public dashboard, which would have a button to download a free copy (grayed out or otherwise marked if currently there are no sponsored copies). The same dashboard will also include a form for purchasing a sponsorship; the sponsor can fill in either the number of copies wanted or the amount to spend (letting the software fill in the other field), and optionally provide a sponsorship name if this is a newly created URL. (Assume for this example that the sponsor picks the name MyCause). The sponsor may also provide a short personal message that might include a link to a Web page (like Google AdSense, but probably a longer maximum message, since many of these sponsors will not have a Web site for more information, unlike most commercial advertisers). Then a click on a “Sponsor” button will lead to a shopping-cart checkout, at which the sponsor can pay by bankcard or whatever.
The sponsor then has the link www.automatic-accounts.com/OurBand/OurSong#MyCause — which is another smart URL. This link now “holds” or contains 100 prepaid downloads — meaning that anyone can click on it, and the first 100 to download from it (using the button provided in the public dashboard) can download the song free, even if no more money has been added to that smart URL. Since no one can take any money out of this link, it can be freely published, or openly distributed through social networks, even by ordinary, unsecure email. All a malicious user could do would be to download 100 identical files (most easily on 100 different accounts or computers), and there isn’t much incentive for that.
How many listeners are going to pay $50 or any other substantial amount, to sponsor a band’s particular song, or a video, investigative reporter’s article, or other content? Probably not very many — but then, not many are needed. If the average sponsorship is, say, 100 copies, then only 1% of end users need to pay anything, and the other 99% can use the content completely free, no registration required. We think that around 98% or 99% free should be reachable, since money is unevenly distributed, and quite a few people can easily afford to contribute if they want to. Also, very large sponsorships will go a long way in bringing up the average; if a sponsor puts in $1000, for example, that pays for 2,000 free users at 50 cents each, even if nobody else puts in any money; it’s the average, not the median, that counts for balancing sponsors and free users. Such a sponsor might know band members personally, for example, and care for that reason; or in another context, believe that an investigative news report is particularly important, and want to assure that it gets around, and that the reporter (and other reporters) are encouraged to do future articles like it.
RepliCounts Advantages and Benefits
- End users can just click for a free download, like now. They don’t need any account, any money, or any learning curve. But the artists get paid. Free access continues only if they do, motivating users who can afford it to sponsor copies, and motivating other users to find sponsors.
- Sponsors will make standard e-commerce purchases, paying as usual. They don’t need any new account, or any learning curve.
- Therefore no “network effect” or critical mass of users is necessary. So this system could work successfully for the first artists to try it.
- Sponsors have lots of flexible incentives, including recognition, advertising, supporting a cause (or simultaneous causes), or looking for partners with compatible commitments or fantasies. And there are no unnatural limits on the sponsorship amount. For example, buying 100 CDs from the artists and giving them out intelligently (better than just leaving them at a giant party, to be picked up but seldom listened to) would usually be more hassle than buying 1000 or even 10,000 prepaid downloads and giving them out through email networks, Web postings, Twitter, etc.
- For several reasons, we expect that the great majority of end users can be free. Tentatively we are aiming for about 98% free downloaders overall, about 2% sponsors, for this use of RepliCounts to sell and deliver sponsored digital content. Of course the actual range will be determined by experience.
- This system will be very efficient; we estimate the cost per financial transaction at well under a tenth of a cent. Different reproducing-account systems will compete with each other, allowing generic competition based on performance and price. So it is likely that almost all of the money paid for sponsorships will go to the artists. The main ongoing costs will be software maintenance, and user support; these could be partly subsidized at first, and scale down per user, as the system manages more accounts. Since revenue can be collected as a small percentage of sponsorship sales as they occur, there is no cost for billing — and the artists do not need any money up front.
- Many software systems have proven hard to monetize — but not mass sponsorship with RepliCounts. It is inherently monetized from day one, with no need for any attention or hassle.
- RepliCounts could work not only for entertainment, but also for almost any digital content. For example, the same mass sponsorship system could help pay for investigative reporting. It could also be a more efficient and less intrusive way to pay for certain medical or scientific research articles, for example, instead of locking them up behind journal-subscription barriers. And mass sponsorship could have many fundraising uses.
Page updated 2010-01-10