Better than Free for Online Spaces

From Kevin Kelley's recent technium post, "Better than Free":

... the previous round of wealth in this economy was built on selling precious copies, so the free flow of free copies tends to undermine the established order. If reproductions of our best efforts are free, how can we keep going? To put it simply, how does one make money selling free copies?

I have an answer. The simplest way I can put it is thus:

When copies are super abundant, they become worthless.
When copies are super abundant, stuff which can't be copied becomes scarce and valuable.

When copies are free, you need to sell things which can not be copied.

Well, what can't be copied?

Let's take a look at a resource which is currently scarce, virtual land, and consider each of the qualities of a digital resource Kelly identifies as not free. A large part of my work on the Ogoglio project is to foster the community building (to use Kelly's term) a "Great Copy Machine in the Sky" for virtual land, so it's important that we understand what remains when that work achieves critical mass.

Immediacy:
People pay more to see a movie on its opening night, they pay more for early release hardcover books, and in a time when all spaces are eventually copied across the web there is still value in being the first to cover a new development in the genre. Look to Annie Ok's kung-fu blog, machinima, and tweet coverage of the private beta of MTV's virtual lower East side (vLES) for a good example of spending immediacy for cool.

Personalization:
Kelly uses personalization to mean that digital goods are changed to include the user's personal information, like a book which is written with a character that matches you in name and style. On virtual land this can be partially automated (and thus free) if the user has revealed their online media streams. For example Second Life stores are now using a web service to pull a user's profile picture and slap it on a rotating cube to capture window shopper's interests.

But consider an online meeting room which I have decorated with images and models which I think an individual, say Apple's iLife design lead Tim Martin, would find interesting. I think Tim would pay significantly more attention and money on that space than a place which has been freely copied. More importantly, these personal touches would be uninteresting to most people because most people don't have Tim's exact blend of interest in Porshe 411s, late 50s architecture, and existential jokes.

Interpretation:
Kelly nails this for virtual land when he summarizes the value of interpretation of all digital goods: "software, free. The manual, $10,000"

This is a common open source business model, selling services for a free software stack. Red Hat, Apache, MySQL, et al have been tuning this tactic for decades and this form was originally a larger part of Transmutable's business model for supporting and hosting Ogoglio spaces. Interestingly, Linden Lab has handed that business to their community of builders and consulting groups like the Electric Sheep Company. It appears that the market has matured enough that these groups are positioning themselves to skim from platform to platform and with this shift they are laying off their staff with non-transferable skills.

One aspect of interpretation which Kelley does not touch on is editing. As the number and types of online spaces explodes we're now past the time when any one professional analyst (even a speed reader like Raph Koster) can stay on top of new developments so a community of journalists and bloggers can create value by projecting coherent views into the churn.

Authenticity:
Here Kelley invokes the illusive customer who cares about genuine digital goods. Sadly this often boils down to crippled or downsampled copies which are sold as if they were advantageous. Look to the fiasco around Windows "genuine advantage" program which provides nothing but annoyance to paying customers while pirated copies still abound. The largest advantage of securing digital goods from trusted sources is to prevent viruses or other trojan horses from tagging along, but even this hope is largely dashed by decisions of large corporations like Sony to include rootkits (invasive monitoring software) on their music CDs.

For virtual land the value of authenticity seem to be more aligned with accessibility and patronage.

Accessibility:
"Ownership often sucks", writes Kelley, and in the case of virtual land the ability to host a reasonably large group of people requires servers and bandwidth which aren't yet ubiquitous. Here companies like Transmutable and Metaplace can clearly provide value by consolidating the IT work of spinning up a new landscape and pulling from a library of interactive objects. Instead of starting with a blank linux server and a new piece of client software, virtual land creators will soon choose from several products which give anyone with a web browser the ability to churn out massive amounts of virtual land without fussing with servers, upgrades, backups, or any other infrastructure tasks.

Embodiment:
There is a growing market for "gamer systems" like those provided by Alienware and for the 3D printing of virtual land or virtual bodies. Intel is betting the farm on selling large numbers of 3D capable chipsets to drive servers, laptops, and phones which display virtual land. Both aspects of embodiment, high resolution presentation and tangible copies, will be used to connect customers to their digital goods and niche products like the plush toys from Webkinz are starting to take advantage of mirroring physical goods in online spaces.

In reverse, when the digital aspects of a landscape or a body are infinitely copyable many companies shipping physical goods will use virtual mirrors as a place for cheap, automatic personalization which is expensive to embody. My MacBook may be an aluminum slab in real life but its virtual mirror will have angel wings and kick ass data-viz projectors.

Patronage:
Kelly opens this topic with the premise that audiences want to pay creators, and the many virtual tip jars on the web show that this is weakly true. As more virtual creative consultancies and architects pop up (e.g. Jon Brouchoud) it seems that we've started an indirect patronage of artists who use the occasional corporate gig to fund their online experiments. But I think Kelley is speaking more to flocks of individuals who contribute smaller amounts as was done by Radiohead fans who paid an average of $5 for their freely copied new album.

Live performance is also possible with virtual land. I would have paid a small amount to watch Robbie Dingo create a virtual version of Vincent Van Gogh's Starry Night because it exhibited a large amount of skill and taste with constrained tools.

Findability:
I hope that by the end of 2008 there won't be a single non-game virtual land product which isn't exporting its contents for Google to crawl. Ogoglio spaces are already web resources so most of that work is "free" but stand alone lands like Second Life are completely destroying their "magic circles" by allowing (or failing to control) search bots and other forms of crawlers which then export their findings to the web. One good example is the OnRez web search SLBrowser search of Second Life goods and services.

When search is combined with interpretation (e.g. Google + Blogs) the ability to quickly locate and use virtual land in purposeful ways becomes possible. Few business owners will aimlessly wander landscapes the size of There.com looking for a good place to host a company party, but if a google search for "online company party tiki" returns links to three different rentals in three different services the market suddenly gets interesting.

Though it wasn't his exact intent, Kelly concludes with a rally to those of us looking at virtual land as a tool for change:

These eight qualities require a new skill set. Success in the free-copy world is not derived from the skills of distribution since the Great Copy Machine in the Sky takes care of that. Nor are legal skills surrounding Intellectual Property and Copyright very useful anymore. Nor are the skills of hoarding and scarcity. Rather, these new eight generatives demand an understanding of how abundance breeds a sharing mindset, how generosity is a business model, how vital it has become to cultivate and nurture qualities that can't be replicated with a click of the mouse.

In short, the money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits.

Comments

[Trevor F. Smith]

Giff Constable's posted interesting remarks about DRM in relation to free spaces, which is relevant to this conversation: http://blogs.electricsheepcompany.com/giff/?p=522