RepliCounts: Design for Selling Digital Art Online, Summary

The success of eBay showed the potentially enormous benefits of connecting people online. Digital artists should enjoy the same advantage, plus an additional big one: free shipping with instant delivery. But instead, selling digital goods independently has not worked well, largely due to the difficulty of collecting many small payments online — especially for work that so far has been much more easily delivered free. We propose a mass-sponsorship model, free to the end user, as an alternative when money is necessary. Note that this is just one use for RepliCounts (or other replicating accounts); many other uses have nothing to do with sponsorship or content delivery.

The basic idea or RepliCounts (financial accounts that can reproduce indefinitely) could not have worked until recently, when e-commerce became widespread. If you think that anything so simple and powerful would have been invented already, note that thousands of years of doing things one way (especially something as emotional as money) leaves a deep rut. It’s hard to imagine getting out of such a rut, even when new technology makes it possible. No financial account in history has ever reproduced indefinitely and inherited any number of services, as RepliCounts does. And e-commerce matters enough that new opportunities are worth a look.

Since our mission is to help independent artists build income streams from digital work, this summary will use mass sponsorship of art or other online content as the main example for explaining the RepliCounts design. Another example (spam control by letting recipients easily charge any amount to receive an email at a special address) will illustrate RepliCounts security — by showing how a short code in an ordinary email can pay the recipient with little risk of theft, even though nothing is encrypted and the email transmission is not secure.

Our goal for this Summary (which begins with the 1-page Introduction) is to explain the RepliCounts design well enough that readers can decide for themselves whether the idea makes sense, and perhaps suggest improvements.

To receive money online, it’s usually better to process a few larger payments than many smaller ones. For example, compare raising $100 from one or a few payments, vs. receiving 100 $1 payments online — or worse, 1,000 10-cent online payments. Apple’s iTunes can handle 99-cent prices, but independent bands or other artists who want to sell their work do not have the momentum to get millions of people registered in advance and ready to buy.

So instead, consider selling prepaid downloads in bulk, usually at low per-copy prices, letting end users download free while the artists get paid. You can offer lots of incentives and advantages for the buyer (the sponsor, who pays the money).

For example, if a band or other artist sets a price of $1 per download, it may be easier to find one, two, or a few people who will sponsor the music by purchasing 100 prepaid downloads between them, letting 100 others download free — than to find 100 people who will each pay $1 online for the song. If bulk sponsors can be found, then certainly the fewer transaction fees (credit card, debit card, PayPal, etc.) will cost less than for 100 smaller payments.

More importantly, people who belong in the artists’ community but cannot pay money (such as those in third-world countries, now including parts of the U.S.) could still participate in the culture. And even though they have no money online, they can help the artists by bringing their work to wider attention — which could yield major sponsorship purchases in the future, especially since arts communities often cross class lines.

And if sponsors cannot be found, maybe the artists need better marketing. Or maybe they need to lower their prices. For example, charging 10 cents instead of $1 might make the deal more attractive to sponsors — and more importantly for balancing sponsors and free end users, it will make each sponsorship will go 10 times as far in meeting the public demand. Or “charge” 25 cents to make the sponsorships go 4 times as far. (We put “charge” in quotation marks, since hopefully the great majority of end users will never need to pay anything.) This sponsorship system can easily handle very low prices, even less than a penny per download (although such low prices will be rare).

Personal Messages: Or, Will Sponsors Pay for Music, Etc. That Others Will Listen To?

By “mass sponsorship” we mean letting anyone in the world who can pay online sponsor as much or as little of a particular song, video, etc. as they wish, easily, any time, for any of many different reasons — and immediately gain recognition in relevant communities (which they may help select if they wish).

The sponsor can optionally provide a message to everyone who downloads a copy that sponsor paid for. This personal message is intended for many different purposes. It can support a cause, philosophy, product, entertainment, political race, religious practice, etc. It may offer a greeting, or a joke, or link(s) to an idea. Importantly, it can describe the sponsor (or a project of the sponsor), for networking possibilities. Or the sponsor may choose to be anonymous from the public. The artists might or might not require their review before publishing a sponsor’s message (if so, they will have incentive to make the review fast and positive, as the sponsorship is not final and the money not paid until the message is approved). And sponsors can change their message later, if they go to the trouble of remembering a password they receive with their sponsorship. The minimum sponsorship purchase is one copy. There is no maximum limit.

So for anyone likes an artist and has money to spend, here is a handy occasion to contribute any amount gracefully. For example, a sponsor could buy 5,000 copies (as prepaid downloads) without knowing 5,000 people to give them to, and direct them to friends of friends of friends etc. — or direct them to certain existing network(s) that may include celebrity or elite members — or let the artists publish any number of prepaid copies on their site, for any visitors to use. No need to wait for an ask (which could involve the whole mess of conventional fundraising). You the sponsor decide what you want to do — even if the artists do not know who you are, or know any way to reach you.

The 5,000 prepaid copies are contained in a smart URL; the sponsor who purchased the smart URL is given the first copy, exclusively, and may have largely named the URL. Anyone who receives a copy of that smart URL can click it, to reach the services it offers. The URL will let 5,000 download the art free (first come first served). But in practice it may let many more download free, as some of those 5,000 will probably decide to sponsor additional copies. The sponsor may send the URL to a few well-chosen people or lists — and encourage recipients to share it through their own networks, etc. Compare the ease of distributing 5,000 copies by emailing to just a few friends, vs. mailing 5,000 CDs — or even emailing 5,000 gift codes.

More importantly, the sponsor may buy into an existing smart URL — in order to reach the audience where it already circulates, which may include leaders or celebrities in the field. Not every URL will be widely distributed. Receiving a smart URL from elite circles will serve as an invitation to purchase a sponsorship, and reach that audience with the sponsor’s personal message.

Another advantage is that this model encourages free sharing of art that someone loves, instead of criminalizing sharing. These are paid copies — though usually paid in bulk by a sponsor, not by everyone who wants to share. The difference from commercial distribution is that the process of paid sharing is much more fluid and natural; anybody who has a link offering sponsored access can simply email that link to friends, giving them access to the art that would otherwise have cost money. So the artists benefits not only by getting paid when commercial sharing would not have happened, but also by empowering their fans to share their art more effectively in their communities. Even if none of the friends buy any sponsorship, they may pass on the smart URL to others who will. Or at the very least they will use up sponsored copies, accelerating exhaustion of the smart URL, and consequent community demand for more sponsors to make the work free again.

We designed RepliCounts to handle this kind of distribution.

Smart URLs Are Forever

The smart URL is simply the name of a RepliCount, in a clickable form. Clicking the smart URL will show the user a “public dashboard” — which offers the public very limited options for using the account, depending on what the account owner wants to offer. For example, if this smart URL is distributing a song, the public dashboard might show a big green button if any prepaid (sponsored) copies remain available for download; if none are currently available, it might show a smaller red button instead. In either case, the dashboard will offer anyone the opportunity to sponsor more copies, in any quantity — paying by bankcard, etc., and adding a personal sponsor’s message for those copies if they want.

Free Samples: The public dashboard may also offer a free sample (meaning that anyone can listen to it without using up a free copy — and can listen whether or not any free downloads are currently available). Short free samples could be critically important in helping audiences discover new music, videos, or other works. For example, someone could choose a genre and maybe other criteria, and with 30-second samples composed by the artists, could sample more than 100 new artists or compositions per hour. Meanwhile the computer screen will show a playlist of the samples, including sponsors’ messages, offering instant, easy selection or return to any sample, free listening to the whole song if any sponsored copies are available, and of course the chance to purchase more sponsored copies in any quantity.

Note that all setup for this free-sample display can be inherited when the RepliCount reproduces. So the artists can create a new RepliCount effortlessly (by having one “born”), put a different song into it, and the new smart URL will be ready for public release. (Note also that the artists, as account owner, also have access to an owner’s dashboard that every RepliCount has. The owner’s dashboard offers far more options for controlling the account than the public dashboard (if any) offers.

Any number of copies of the smart URL can circulate forever through social networks, by email or otherwise, as long as there is public interest in the art or other content it provides. When all the sponsored downloads run out, the URL does not go away; it still works, letting anyone who can pay online sponsor more downloads (usually in large quantities like a dozen, a hundred, or perhaps 5,000, with good quantity discounts). And if the artists included a free sample, it will remain free always, through the smart URL, or through the free-sample databases that provide listening by genre, etc. Either one of these free-sample sources will not go away unless deliberately removed — and could result in more sponsorships at any time.

Each smart URL, in any number of copies, can flow around the world — tending to go to people who like the particular song or other art distributed by that smart URL. So these URLs may automatically find new constituencies for the artist — audiences that usually could not be predicted or found in any other way. For example, a band in Tennessee might develop a (paid) cult following somewhere in China, even if no one involved knew both languages. Or it could develop a distributed sponsorship of people anywhere.

Each Smart URL Speaks Many Languages

As we noted in the Introduction, any user can change the “business language” of a smart URL, and distribute the smart URL in that language, which will remain until some other user changes it in a particular copy. By business language, we mean enough operations (probably a few dozen) to enable users to download free, hear free samples, sponsor more copies, pay by bankcard, etc.; these operations will available in each of the languages supported by the server. The art delivered by the smart URL is not translated or changed in any way. Messages from the bankcard (such as a payment being rejected) also are not translated, but they do not need to be, since sponsors will not be paying money in a language they do not know. The sponsor’s message also is not translated; however, a RepliCounts server could allow a sponsor to enter manually translated copies of the message in as many of the supported languages as desired, and pick the appropriate translation for each language (if no sponsor’s message has entered for a language, the sponsor’s choice of default language will be used).

No Need for DRM

RepliCounts is agnostic on DRM (digital rights management, also called digital restrictions management); it does not provide DRM but does not prohibit it either. Artists can provide their work in protected formats if they want.

But we think that sponsored distribution could greatly reduce both DRM and piracy, provided that enough sponsorship can be found. In that case, free pirate copies will have to compete against free legitimate copies that do pay the artists. Fans who like the artists will choose the legitimate ones. The only possible downside is a little looking to find a legitimate copy, vs. (for those who cannot pay) being less able to participate in the culture since one cannot have the content at all, with conventional payment for each copy. But people will almost always be encouraged to share a smart URL, and those receive one can just click it to download the legitimate copy, as long as sponsored copies are currently available. And if not, the artist and the community can work together in an organized ways to find more sponsors; or if that’s not realistic, the artists can lower their prices to make each sponsorship go much further.

It’s much more efficient to collect online payment for content in large chunks rather than tiny ones. DRM forces the tiny payments every time, making the whole system largely unworkable, as we have seen. Mass sponsorship (letting anyone, anywhere, any time, support as much or as little as they want of any art distributed this way, for any of lots of different personal and public reasons), will make payment much more voluntary, and more efficient.

More Benefits for Sponsors

RepliCounts will let anyone in the world who can pay online sponsor 1, 5, 20, 500, 10,000, 19,379 or any number of copies of a particular song, video, news report, manifesto, database use, or other digital content that is meaningful to them — any time, any place, for any reason — and then distribute their sponsored copies as they wish, through ordinary email or other means. A zero-click system (mouseover with optional cancellation later) could let them sponsor more while in a reverie, listening to the music for example, without needing to break the spell by bothering with a keyboard.

Note that sponsors can reach people (with their personal message about anything) whose friends think they will like a certain song, etc. — an audience probably unreachable in any other way. Sponsors can support artist(s) they like financially, while also promoting their work to new audiences. Sponsors can get recognition in communities they care about. If sponsored copies have run out, then new or previous sponsors can play the hero, as the new sponsorship instantly makes the art available free again through social networks around the world — good karma for the sponsor, and for any cause promoted in the sponsor’s message. For more on incentives, see our earlier list of incentives for sponsors.

Also, sponsors will be able to distinguish their email messages from the general communication tsunami, giving their emails additional status because a code in the email itself will unlock free access to “content” that would otherwise cost money.

Some people doubt that sponsors will pay for music that others will listen to. But look at the opportunities for sponsors to get recognition this way in their own communities (including any number of de facto members they have not met personally), or present themselves as they wish to other communities where they may want to be recognized.

And in case the recognition and other incentives are not enough, economic forces will tend to keep sponsorships and free end users in balance. For example, if sponsored copies run out, then end users will have an incentive to get more sponsors involved, so that they can have free copies for themselves and to give away to others (quite unlike what happens in a purely free, voluntary-contribution system). Also, if there aren’t enough sponsored copies of a work, maybe the artist(s) need to lower their prices, making each sponsorship dollar go considerably farther to sponsorships and free downloads back into balance.

And relatively few sponsors will be needed; we guesstimate that a target average of 50 downloads per sponsorship will often be obtainable — especially since any very large sponsorships will disproportionately weight the average. Also, sponsors will by default get attractive discounts for large bulk purchases.

Since the cost of running this online transaction system can be low, the artist(s) can get almost all the money paid in (another encouragement to sponsors).

To our knowledge, no such software exists. It could be written without replicating accounts, but will be easier and better with them. And the same software will provide an infrastructure of highly enhanced accounts that could support hundreds of other projects. Unlike conventional digital infrastructures (operating systems, browsers, or shopping carts), accounts can seamlessly integrate money and applications, allowing unprecedented convenience. And replicating accounts, being easy enough to develop that no big money is needed, can deliver all this openly, generically priced, and without corporate parasitism or control.

And as we noted above, the first artist to use RepliCounts for mass sponsorship can benefit — even if nobody else in the world knows anything about this system. There is no requirement at all for a critical mass of users.

Some Advantages of RepliCounts for Mass Sponsorship

  • Free and Hassle-Free Access: End users who download (or stream) the music free will never need to register or do any other preparation in advance. They will not need any money, or any account of any kind. They will not need to know that RepliCounts exists. Instead they will click to download free, as they have always done. (Most likely they will be told that the artists are paid for their free use, by the sponsor who brings them the following message.)
  • Standard E-commerce: Likewise, sponsors will pay by credit or debit card or other familiar means, just like buying anything else online. They too will not need to know that RepliCounts exists. They can, however, be informed that almost all of their payment goes to the artists.
  • No Critical Mass of Users Required: A huge obstacle to introducing new general-purpose transaction systems is that early adopters will not find it useful, since few of the people they want to transact with already have an account and know how to use the system (PayPal competitors like Obopay or Revolution Money have this problem now — though we think both are well positioned to catch on). It’s a chicken-and-egg problem: how do you get thousands of people to set up accounts on faith, if they are less useful now since most people don’t have them already? RepliCounts avoids this obstacle, since only the artist (or other merchant/payee) will need to get one or more RepliCounts and set them up, and they are motivated to do so. But sponsors and free end users need no RepliCount or any other setup, and do only what they already know. The network effect (that networks become more useful as more people join them) will apply to some RepliCounts applications. But for mass sponsorship of art or other online content, the first artists to try RepliCounts could be successful, even if no one else in the world had heard of them.
  • Personal Outreach: Sponsors can optionally provide their own message about almost anything, to be delivered to anyone who downloads (or streams) a copy of the music or other art that sponsor paid for. We suggest a short text format, like Google AdWords — but somewhat longer since many of these sponsors will not have a website to link to. Or the artist(s) could choose a different format, such as allowing a photo, etc. with each sponsor’s message.
  • Email Gets Special Attention: An email that includes a non-empty smart URL will give free access (to art, etc.) that would otherwise cost money, and that at least one sponsor thought was worth paying for. Such email could distinguish itself from the tsunami of email without that vote of confidence, and that includes no monetary benefit to the recipient.
  • Almost All the Sponsorship Money Will Pay the Artists: We guesstimate that less than 2% of sponsorships could pay for operating the very automated RepliCounts system. Artists getting 98% of the money will be an important draw for sponsors.
  • Account Dashboards Every RepliCount will have a dashboard (control center), where the owner can change account settings. But many (probably most) RepliCounts will also have an additional, public dashboard — usually accessed by clicking on the account’s name, in the form of a smart URL. In the RepliCounts system, we call these accounts (with a 2nd, public dashboard) “public accounts” — and irrevocably limit them so that they can only receive money for the owner, but never give any money out to anyone else. (Note: RepliCounts could have any number of dashboards, each with its own access requirements and permissions. So far we have not found uses for more than two.)
  • “Smart URLs”: Sponsors will receive their sponsorship in a smart URL, which will be charged up with the sponsor’s prepaid copies of the particular art or other online content that is this account offers. The smart URL will let that many people click and download the art it contains, free. When all the sponsored copies have been used, the smart URL will no longer give out free copies until more have been purchased. The user could buy just one — or buy many thousands, with no upper limit — paying with a bankcard, PayPal etc., even a paper check sent by postal mail, or any other workable means.
  • Competition Among Sponsors: Anyone can sponsor more downloads at any time, in any smart URL they have a copy of. A smart URL can hold any number of separate sponsorships — so sponsors can act when they want, without waiting for existing downloads to be exhausted. By default, each new sponsorship will instantly change the sponsor’s message going out from all copies of that smart URL, anywhere in the world. The resulting competition between sponsors (especially in a hard-fought election, for example) could greatly increase the income of the artists, which after all is the point of this project. The artists could also check a box at their account’s dashboard to allow sponsors to pay more per download in order to get lasting priority over other sponsors’ messages, perhaps in increments of 50% or greater.
  • Sponsors Can Give Their Prepaid Downloads to Their Own Networks — Or Choose a Public Network: Sponsors could give their sponsorship to their friends to use and pass on. Or they could buy into an existing smart URL (if they have a copy of it), getting their message out to the social networks defined by possession of that URL. This ever-changing network could include leaders in the field, or other especially desirable audiences that sponsors may want to reach. Sponsors won’t know exactly whom they will reach, but will have a good hint if they know who sent them the URL.
  • Fundraising: Shared Revenue Is Easy: Artists can use their RepliCounts dashboard to share a portion of their revenues with a cause or charity organization (or organizations) — by entering a public account owned by that organization (or possibly providing another way to transfer the money, such as an account that will save until a threshold is reached and then send a paper check). Note that the shared money can reach the recipients immediately, with no need to wait for accounting, etc. And this system can provide public, transparent auditing, if the artists check a box in a dashboard to publish the revenue on a Web page; in this case any sponsor can check the amount accumulated before purchasing their sponsorship, and then after the purchase, to verify that their contribution had been added.
  • Closed Groups Possible: Smart URLs can be kept within a closed group (such as a college class) — but only if everyone cooperates, since nothing prevents anyone who has the smart URL from sending it to others outside the group. If this becomes a problem, the sponsor can divide his or her smart URL into multiple smart URLs (using account replication), each with a part of the sponsorship, and give these out to different parts of the list, limiting the loss if a URL gets out to the public and is drained by non-members. Or each member might get a different smart URL containing, say, 5 copies each, to allow limited sharing.
  • Accounts Can Circulate and Pay Artists Indefinitely: Each smart URL need never expire, but can circulate indefinitely, as long as people are interested in the art or other content it contains. As copies circulate, the smart URL continues to pay the artist as more prepaid downloads are purchased (sponsored). Note that when the smart URL’s copies of the art are exhausted, the URL is still good; anyone can use it later to sponsor more copies, for those who already have a copy of that URL or who get a copy of it in the future.
  • Short URLs: Smart URLs can be short enough to fit into Twitter without URL shortening, which some people don’t like because it can be used to hide malware.
  • International: Users Can Choose Their Language Any Time: The smart URL can do business in many languages, so it can easily cross national and cultural borders if the content is relevant. A small vocabulary in each language should be enough to tell people if free copies are available, and to allow them to pay using a bankcard, etc. Users can change the language by changing a part of the URL using code provided (e.g. en for English, es for Spanish, etc) — it is still the same URL, in the sense of delivering the same art, and containing the same sponsorships. This way every copy of a single smart URL can be using a different language simultaneously. Note that messages from the bankcard or other payment system (for example, saying that a payment attempt has been rejected) will be seen by the potential sponsor directly; these do not need to be translated by the smart URL, since it is unlikely that a sponsor will want to pay money in a language he or she does not know, and therefore this possibility does not need to be supported.
  • Real-Time Data: The smart URL will keep real-time data on usage. The artists can check at any time to see how their smart URL is doing — how many prepaid downloads have been used, exactly when, and in what countries, for example. And sponsors can optionally keep a password provided by the RepliCounts system for each sponsorship purchased; the password will allow them to change their outgoing message if they want, allow them to check the current data of the sponsorship they purchased, and possibly allow them to cancel their remaining sponsorship and have their payment refunded.

Mass-Sponsorship Example

See the Artists tab for an example of how a band could use RepliCounts for mass sponsorship.

The Future

We made certain choices in our RepliCounts design, mainly for simplicity and convenience, and these could have been done differently. We believe that replicating accounts (not necessarily RepliCounts™) will power a parallel financial system for many purposes, using conventional money (and/or alternative currencies, but we have not designed for them yet). Most importantly, accounts that can reproduce will support new business models that would be difficult otherwise — increasing sensible economic activity in a time of need.

Page updated 2009-09-30