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Super-Negotiation · Wednesday June 24, 2009 by Crosbie Fitch

In P2P And Putting In Place A Workable Business Model Chris Gilbey is right to observe that the obvious alternative or adjunct to a monopoly on the manufacturing and distribution of copies is a tax on the distribution of copies. In other words, if people start ignoring the monopoly by making and giving away their own copies they can be taxed for the copies they distribute.

Unfortunately, all this is ‘obvious’ only from the perspective of a monopolist publisher. What those publishers and their friends in high places don’t want to recognise is that not only was the monopoly of copyright an iniquitous piece of legislation in the first place, but a tax would compound it.

Instead we should recognise that the publishers are being rightly ejected from their privileged position in the value chain. They aren’t needed for manufacturing copies, distributing them, retailing them, or even promoting them. The public can do this all by themselves thanks to the Internet, or as Chris describes it: ‘super-distribution’.

What may easily slip one’s notice is that hand in hand with super-distribution goes super-communication. In fact the former came from the latter.

One of the key commercial advantages of copyright in the 18th century was that it removed the then considerable costs involved in what should have been communication/negotiation between the customers of books (words, not paper) and the authors thereof. The printers (in pursuing their monopolies) were thus in an ideal position to commission the author’s work – to negotiate a price of the work on one hand, and the price of each copy on the other.

Now just as super-distribution renders the monopoly of copyright ineffective, super-communication also renders the prospect of an author negotiating with their readership feasible. They can eliminate the costs imposed on the value chain by the printer, publisher, distributor, and retailer, eliminate the promotional costs of copyright, and thus negotiate what may well be a more lucrative commission from their readers directly. The market for printed copies is thus free and independent of the market for the intellectual work (qv WikiTravel & WikiTravelPress).

What should have happened in the 18th century was that the readers commissioned the author directly (via subscription), and then printers competed with each other in a free market to print copies of the author’s work. No doubt subscription technologies would have improved no end in the absence of copyright – and the price of books would have been a tad lower.

Today, with copyright ineffective, necessity is spurring the invention of efficient subscription or negotiation facilities. This is what I’m working on (ContingencyMarket.com), a means of enabling the author to haggle with readers, the audience to haggle with the artist, to make a collective bargain concerning the exchange of art for money, money for art. After all, it’s art the audience wants to pay for, not copies.

So, I don’t think the future business model for intellectual work will be quite as complicated as Chris suggests (no compulsion, levy or tax should be necessary). It should actually be rather simple, e.g. the author says “I’ll sell my book for $10,000”, and 9,000 readers say “We’ll buy your book for $1” and then the author says “Aw, alright then, done!”. Well, perhaps that’s an oversimplification. The negotiations and exchanges will no doubt be far more subtle and fluid (low friction) – or will be when this approach takes off. But, the point is, the author no longer needs to pay the publisher for printing, distribution, and promotion. They simply need a tadette of money from their readers, their customers. In exchange, the readers get the author’s words, and their liberty restored to share and build upon published works.

As Chris says, we need to “get people to the table to negotiate”, and that’s the artist and their audience: the negotiator with the art, and the negotiator with the money. Having enabled their negotiations, and once their deal is done, both sides have what they want. The artist has their audience’s money. The audience has the artist’s art – and both retain their liberty (there’s no longer any motive to preserve the monopoly in the production of copies). As with WikiTravelPress, if any CD manufacturer reckons there’s still a market for copies of the art, there’s no monopoly stopping them. After all, you can still buy CD copies of Red Hat Linux, and there’s no monopoly to prevent anyone else making and selling copies of that.

We could call this direct exchange of art and money between artist and audience super-negotiation.

Maniquí said 4213 days ago :

Really interesting concepts.

Just a a few quick comments/questions

“I’ll sell my book for $10,000”, and 9,000 readers say “We’ll buy your book for $1”

So, the author should release the book (on a digital format?) once he received the $9000?

How would buyers/readers do the payment “all at the same time”?

Or is this somewhat similar to ransomware?

Maniquí said 4213 days ago :

Ok, I’ve read the FAQs on ConvergencyMarket.com and now it’s more clear to me what is this all about.

Crosbie Fitch said 4212 days ago :

> So, the author should release the book (on a digital format?)
> once he received the $9000?

That is the effective exchange, although bearing in mind the large number of patrons, it isn’t a single transaction, but a cascade. $4,000 may be cash in hand, $3,000 due from readers with a good credit rating, and $2,000 from those new to this revenue mechanism. It’s likely to match the advance+royalty revenue stream provided by traditional publishers (the role soon to be taken over by the audience). And don’t forget, the author doesn’t have to accept the deal if they don’t want to. Moreover, each would be patron can also change their mind (prior to any deal of course).

This is not the only approach – there are many (see PayyAttention for example). Some approaches I think are worth a try, and some I think are dubious. However, because as Dirty Harry is wont to say “A man’s got to know his limitations”, I have created the Contingency Market, a general purpose back-end, precisely to permit many different approaches to be more easily explored. I can’t predict which one will become the most popular, but I can at least predict that one or two of them will be.

> How would buyers/readers do the payment “all at the same time”?

Well, via some Internet based system, e.g. the Contingency Market. That would be the system that makes the simultaneous payment. Each payee has made the decision to pay asynchronously, and will similarly pay their dues asynchronously (with a lump sum).

> Or is this somewhat similar to
> ransomware?

The SPP is a rather simple subscription mechanism, and as described on the Wikipedia page you link to, has a long pedigree. Something a tad more sophisticated (and unprecedented as far as I’m aware) is the Digital Art Auction, which enables a single price per copy to be determined from a collection of valuations.

Skeptical said 4196 days ago :

It should actually be rather simple, e.g. the author says “I’ll sell my book for $10,000”, and 9,000 readers say “We’ll buy your book for $1” and then the author says “Aw, alright then, done!”. Well, perhaps that’s an oversimplification.
Yes, oversimplification. Many assumptions here. The biggest being the arbitrary figure of $10,000 that you have plucked from somewhere. The writer has just spent 18 months writing the book. Living in a western country, the writer feels that a slightly better than average wage is acceptable. After all, the writer is the one that is providing the creativity to entertain others. So let’s say 18 months x $900 (gross per week, lets not forget taxes) So that’s $64,800 gross the writer needs just to get their wages for the 18 months. Lets say that it’s a good book (but not a “harry potter”) and people are prepared to pay $3 to download it (after all you can buy books for a dollar now under this new system so they wont pay too much). So now the writer has to get 21600 people to pay the $3 each. So now the writer has to get the word out. OK, it can be twittered, or blogged, etc, but ultimately the writer will probably have to resort to adsense (lets forget about the traditional mediums) to promote it. More cost that has to be recouped. So more books have to be sold, so more advertising is required to get the message out. So more expenses need to be recouped, etc, etc.

Or doesn’t the writer deserve a decent wage?

Crosbie Fitch said 4195 days ago :

Everyone deserves a decent wage for decent work. Unfortunately, not everyone appreciates decent work, so not everyone will get what they deserve. If you spend years researching and writing a book on a subject that few are interested in you may well find fewer people willing to pay you a decent amount for your work, compared to many who might pay a good deal for hastily scribbled thoughts, by a celebrity say.

I’m developing a revenue mechanism that enables writers to exchange their writing with their readers’ money – without suspending those readers’ liberty to share or build upon that writer’s work, and without forcibly extracting money from the readers (taxation). I suggest it’s also better than removing value from one’s work to sell one’s audience’s eyeballs to advertisers.

Building up an appreciative audience (to maximise revenue) will depend upon the author’s ability to demonstrate that their writing constitutes decent work, the existence or development of a market demand for the writing, and maximising the ability for that market to discover the author and their writing. There are many others to help in those respects. I’m focussed on providing help at the point where reader and writer need to make an exchange (including the haggling).

To an unknown/undiscovered author, I would suggest that either they work on building up their audience/market with a series of smaller publications first, or if they can afford to invest 18 months of their time unfunded, to publish that book free, as a promotional work (exchanging sales revenue for marketing costs). You can’t get paid unless there’s a market for your work and that market has discovered you. Of course, with a reproduction monopoly, it is possible future sales could be predicted to warrant an advance from an investor (publisher). However, irrespective of the fact that a monopoly is unethical, I think you’ll find it’s no longer viable. We’re left with the choice of exchange in a free market or taxation.

If the author is known/discovered then being a decent writer they’ll have a decent audience and a decent wage in exchange for their writing. This will also help increase the size of their audience. Hopefully, by the time most authors decide to invest 18 months on a book they have already built up a large enough audience that they can be confident that around 20,000 readers will be prepared to exchange $3 each for it – or 2,000 readers $30, or 60,000 $1.




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