Here is a step-by-step example of how a band might use RepliCounts to distribute a song by mass sponsorship — and get paid for it.
Note that a “smart URL” is a clickable format of a RepliCount. The smart URL allows convenient public access to account content and services that the owner chooses to make widely available, to anyone who has the URL. Here we show how copies of a smart URL owned by an artist can circulate in a community indefinitely, doing business for the artist with any number of sponsors and free end users, without the artist’s attention. The URL can also reproduce, and its descendents can circulate in other communities, selling the same art there. Usually anyone will be invited to freely share a smart URL with others who may be interested in the digital content it provides, because doing so will likely increase the income and exposure of the artist, and increase the exposure of the sponsor(s) as well.
We call this distribution mass sponsorship. Anyone in the world who can pay online can support any particular song, video, photo, drawing, painting, investigative report, or other online content distributed this way — any time, any place, for any reason — and can send their own personal message to anyone who uses a prepaid download that sponsor paid for. End users will just click to download free — like they do now, with no registration, log in, or other preliminaries — only this time the artists get paid (by the act of free downloading itself).
For the example below, imagine that RepliCounts has been implemented on a website, say www.automatic-accounts.com. Nothing else is needed; no special software needs to run on any other computer, and no one in the world needs to have any RepliCount. For this example, we will even assume that no one in the world besides the artists has ever heard of RepliCounts, or this mass-sponsorship method of distribution.
To begin, a band member or someone else representing the band will visit a website on which RepliCounts has been implemented (call it www.automatic-accounts.com) and follow new-user instructions on that page to set up an online account. The (secure) site 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. 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 (if everyone in the world tried 50,000 guesses, all different from each other, odds are that no one would guess the number — and computers cannot use brute force to guess, since only the server can say if a guess is correct, and there’s no way to try billions of guesses). This 15-digit number will be the name of world’s first RepliCount.
Probably the band will need to be approved by the organization running the server before its account becomes active; this process will be as easy as possible (for example, requiring a valid bankcard, or personal knowledge of the band), depending on what is found necessary to prevent fraudulent or other malicious uses (for example, selling someone else’s music without permission). Each competing server (each one offering a separate series of RepliCounts or other replicating accounts) will have a public reputation, and this reputation will be part of RepliCounts security, as sponsors will be encouraged to deal only with servers they trust. A server’s reputation will depend on the company it keeps, on avoiding abuses when possible and quickly stopping them if necessary.
Now the band can set options for its new RepliCount, using the 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 www.automatic-accounts.com (which will require a secure connection), and pastes the account name (the 15-digit number in this case) into a box provided.
At the dashboard, the band’s representative could potentially provide data and other options for dozens or hundreds of different services available to any RepliCount on this server. Fortunately, the band will need to know about only a handful of them; most of the others will never be turned on, but are there for other users with different needs. In the control center’s section on music distribution, the band reserves its own name on that server for public use (for this example, assume it is OurBand). Now the band has a clickable public address, www.automatic-accounts.com/OurBand (we strongly recommend that RepliCount servers ignore capitalization, so no one has to remember which letters are 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 could make up a name to use for it — maybe the title of the song. For this example we’ll call it OurSong.
By making this choice at the control center, the band has now created the world’s second RepliCount — a public account with the clickable name www.automatic-accounts.com/OurBand/OurSong. A public account means that the account is irrevocably set so that it can take money in, but never give any money out (it can give out paid art or other content). The band’s representative will receive from the server a new 15-digit number as the secret name for that public account, so that the account owner (the band) can let employees, etc. log on to that song specifically, without also giving them control of all the songs that the band sells on that server. The master-account login information (the first 15-digit number created, noted above) can be stored away for safekeeping, and only used in an emergency; from that master account, the private account names (logon information) for all songs of that band will by default be available, avoiding problems if those secret account names or numbers get lost.
Should the security of the login information for the management of one or more public accounts (one or more songs) be stolen (whether or not this information is also lost to the band), no one could use it to get any money out, provided that these accounts had irrevocably been set to never hold any money, but transfer it immediately to a secret destination. And not only would the money be safe; the band could also use the master account to regenerate new names of any potentially compromised management account for an individual song, even if an unauthorized party had changed the name — restoring the band’s exclusive control. The world’s only copy of master account name will be kept in a safe, etc., and not used in ordinary business, so it will be unlikely to be stolen. (Even the server will not have the name of the master account; it will only save a hashed [encrypted] version of the name.)
In addition, the band could create a hierarchy of master accounts, so that even if the safe or whatever with the master account information is lost or destroyed, a superior master kept in another safe could be used instead. This hierarchy also allows master-account access to be given to a representative and later taken back if necessary (although in that case, money in the account could already have been drained out). The ability to regain control is necessary, since these accounts will control access not only to money, but also to names recognized by the public, which usually will be more valuable than the money, and the owner of this property may want to get it back immediately from a rogue employee or unknown criminal, without needing to wait months or years for legal process. Note also that this ability of a RepliCount owner to create any number of levels of hierarchical master accounts should greatly reduce (or eliminate) the need to contact user services to restore lost access, or to trust insecure email for doing so. The account owners will be shown exactly how to secure their accounts against loss of access, and given powerful tools for this purpose; if they fail to do so, there may be no way for customer service to restore their accounts.
Back to the song, 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, it visits the song’s private dashboard and selects an Upload option, which will give a choice of formats (MP3 for example) supported by this server. The server may also recommend (or even require) providing a much shorter 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 making a new composition.
The band also needs to set a per-copy price per download. For this example, say that the band picks $.50 (50 cents) — and (for the simplicity of our example) decides not to offer any quantity discounts, so it does not check the quantity-discount option.
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 they know who might want to help, such as friends, relatives, or colleagues. Or 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.
Any sponsor cancan 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 purchase, which will not only fund the group but also introduce its music to new listeners — and use the personal message to introduce the organization as well. There are all sorts of incentives for sponsors (who can be donors, or advertisers, or supporters of a cause, and/or have other relationships and roles).
Suppose a potential sponsor wants to put in $50, for one or more of the 16 incentives, or for other reasons. The above pricing ($.50 per copy, no quantity discounts) means that this sponsor could buy 100 (prepaid) free downloads of the particular song. (For example, right now I would like an opportunity to tell people about RepliCounts, while helping local music and musicians at the same time.) Or the sponsor might be a relative, who could contribute any sponsorship amount whatever this way. You could buy 10,000 copies without needing to know 10,000 people to give them to, thanks to the social-network distribution. And note that any email or whatever that contains the smart URL gives recipients free access to what would otherwise cost money, provided that there are currently enough sponsorships. (And if not, there are a number of ways to improve the balance of sponsorships vs. accesses by free end users.)
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 paste or type in) the smart URL www.automatic-accounts.com/OurBand/OurSong. Like anyone else, the potential sponsor would reach the public dashboard, which would have a button to click to download a free copy (grayed out or otherwise marked if this is the first sponsorship, since there would be no sponsored copies yet). The same dashboard will also have a short form for purchasing a sponsorship; the sponsor can fill in either the number of copies wanted or the amount to spend, and optionally fill in a name for the new sponsorship (let’s assume the sponsor picks the name MyCause). The sponsor may also provide a short personal message that can include a link (like Google AdSense), in this case to be delivered to all of the 100 people who use a download the sponsor paid for. Then a click on a “Sponsor” button will lead to a standard (or enhanced) shopping-cart checkout, at which the sponsor can pay by credit card, PayPal, or whatever.
The sponsor then has the link www.automatic-accounts.com/OurBand/OurSong#MyCause, 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 at the public control center, no longer grayed out) 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 published, or openly distributed through social networks, for example by ordinary, unsecure email. All a malicious user could do would be to download 100 identical files, and there isn’t much incentive to do that.
Note: The “smart URL” is not really a URL; it does not necessarily have any corresponding directory structure on the server. We chose this format simply because it is familiar to the public, and to software on the Web. In practice, everything after the ‘.com’ will be treated as data, and used to create a hash key to address this smart URL’s entry in a database. Every different smart URL (‘/OurBand/OurSong’ above) is a different RepliCount. And each RepliCount used for mass-sponsorship distribution can hold any number of separate sponsorships, each with its own sponsor’s message.
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 in society, and more than 1% can easily afford to contribute if they want to. Also, very large sponsorships 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. Such a sponsor might know band members personally, for example, and care for that reason — or 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.
Note that the artist can control the balance between sponsors and free end user, by adjusting the per-copy price as needed. For example, changing the per-download price from $.50 to $.10 (ten cents) would make the next $10 in sponsorship pay for 100 free copies, instead of only 20. Conversely, if there are plenty of sponsorships but few downloaders, the artist can (and probably should) raise the price, to bring the sponsorships and free downloading into balance (though a better response in many cases would be to increase outreach). In any case, a major imbalance between paid sponsorships and free downloads is a signal to the artists to examine what is going on, and take action accordingly.
Later Sponsors Have More Choices
The first sponsor can only create a new sponsorship. Later sponsors can do the same, or they can add their sponsorship to an existing one. What are the advantages of the two choices?
A new sponsorship lets a sponsor have complete control over the prepaid downloads that he, she, or it (a business or other organization) purchased. Sponsors can share these copies only through their friends or colleagues — and friends of friends, etc., as most sponsors will encourage sharing of prepaid copies through social networks (often by emailing the smart URL, or by including it in a comment or other Web posting). Note that posting smart URLs on a Web site could increase traffic, due to the treasure-hunt dynamic, since people will be getting something free that otherwise would cost.
Adding prepaid downloads to an existing sponsorship does not give the same control, because there will be an unknown number of copies of the smart URL around the world, and anyone who can click it can download one of the copies of the song, etc., that the new sponsor paid for. However, the new sponsorship’s personal message can reach an existing worldwide community, defined by possession of that smart URL. Some smart URLs will find their way to a selected or exclusive audience in one way or another, making them especially valuable for certain sponsors. Even if a smart URL has been exhausted (all the prepaid copies have been used, so no more free copies are currently available), the URL stays active; anyone can click it and pay for a new sponsorship (instantly restoring access all over the world), anyone can hear a free sample if the artists included one, and people who don’t want to spend money can check back from time to time to see if any free copies have become available.
The artist has choices on how to handle multiple sponsorships: when someone clicks on the link, whose personal message gets used first? We suggest a default of last-in-first-out order (LIFO). In other words, the latest sponsorship starts getting used immediately. This policy has the advantage of letting anyone instantly pre-empt and change the outgoing personal message from a smart URL, all over the world, by purchasing a new sponsorship. A larger sponsorship, holding more prepaid downloads, will keep the new message up longer (although it could in turn be pre-empted — sponsors would of course be informed of the rules in advance). This LIFO order is likely to result in competition among sponsors, especially in a tight political race, for example — greatly increasing the income of the artists in some cases. Their income might increase even more if sponsors could pay a premium for priority — for example, double the standard per-copy price to get their message out right away, four times the price to pre-empt those who have already doubled, etc. Remember that the purpose of this system is to support the artists, who will get practically all of the money paid for all of the sponsorships, at whatever price. About 1% of the population has plenty of money to throw around, in status competitions for example; why not give them the opportunity to do so?
Another management issue is whether a sponsorship should pay the artists immediately (when the transaction becomes final), or whether the RepliCounts server should hold the money at the time of each free download. The latter has the advantage of motivating end users; their free click itself instantly pays the artists who created the work, moving the money into their account that very minute. And this approach also gives the artists short-term motivation to find more audience for their work, resulting in money they can use right then. But paying the artists all the money immediately could have regulatory advantages, since then the financial transaction is a standard e-commerce payment from the sponsors to the artists (with a small percentage deducted to support the RepliCounts operation) — without the RepliCounts operation ever having to hold money in accounts for others, something likely to be regulated more closely in the future than it was under President Bush.
In policy choices of this sort (and there will be many), the server ultimately determines what options are allowed (Congress willing). Often the server will pass on this decision to the artists (with a reasonable default, so that the artists don’t have to think about it if they don’t want to). Then the artists can either make the decision — or in some cases, let each sponsor make it for his or her own sponsorship. In this and many other areas, people will try various ways of doing things and see what works. It is often impossible to predict ahead of time which policies will turn out to be most successful.
RepliCounts Advantages, Benefits
- End users can just click and choose a free download, like now. They don’t need any account, any money, or any learning curve.
- Sponsors 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 once it is available, 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 or never 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.
- Due to the very unequal distribution of money, the removal of practical limits to large purchases, the widespread need for recognition and affiliation, the fact that large sponsorships boost the average greatly, and the ability of the artists to adjust for imbalances by price changes, 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 digital content.)
- This system will be very efficient; we estimate the cost per financial transaction at less than a tenth of a cent. Reproducing accounts should be competitive; we have published these ideas defensively as they developed, to discourage patent monopolies. So it is likely that almost all of the money paid by sponsors of artists will go to the artists.
- 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.
Page updated 2009-09-30