Money

Intellectual Property / Marketing / Money / Web — 1 Comment
26
May 10

The Erosion of Price Due to the Pervasiveness of “Free”

When it comes to any product, there are costs involved in its creation.  For things such as cars or waffles or underpants, part of that cost is purely in raw materials.  Each of these items is a physical good, requiring actual matter to create.  The same is the case for items like DVDs, books, CDs and videogames. The difference in these verus the formerly mentioned physical goods, however, is that the vast majority of their primary value (the reason that someone actually wants them) can be replicated digitally, without raw materials other than those that are typically already possessed by people, such as free space on a hard drive. Their primary value is information, and as such it can be broken down into simple bits and bytes and easily distributed for minimal cost.

The other portion of the cost that both of these types of items have is the cost of actual manpower to create.  There’s someone designing the underpants, just like there’s someone writing and performing the music. This even includes if a waffle was made by some sort of automatic waffle maker – that automatic waffle maker was created by manpower (or the robots that created it were created by people who programmed the robots). Or, if the music is completely computer-generated, someone created the computer program that allowed the music to be created. If a person’s time or talent has value, then creation has a cost.

The point I’m trying to make here is that everything has some sort of cost involved in creating it. Nothing is free to create.

With this cost come questions for creators. Do I pass any of that cost on to the consumer? What is my purpose for creating?  What is the price of my creation?

If any of the reason for the creator is monetary, then there must be some price to be paid by someone for some aspect (no matter how vaguely connected) to your creation.  If it’s not monetary, then what did you create it for?  Was it simply to better the human race?  Perhaps it was to strengthen the acceptance of a cause you feel strongly about. In both of those cases you’re at least charging the cost of a person’s time to consume your creation. There are plenty of creations out there that fall into all of these camps, and a lot more.  As such, there’s a lot of competition out there.

The easiest way to compete in business is by offering a lower price. If you are okay with assuming your time, knowledge, talent and effort are worth nothing monetarily, then it’s easy to offer your content for free.  With millions of people creating content today, a percentage of them are willing to offer their creations for free, and that percentage of a lot of people turns out to still be a lot of people. So what we have is a lot of content for free, competing with some content with a price. How does one compete with free? Continue reading →

Intellectual Property / Money / Music / Web — 1 Comment
16
May 10

Jaron Lanier’s Right: The Web Needs Some Scarcity

If you’ve been paying any attention to my recent Twitter updates, you can probably tell from my constant updates that I’m really digging reading You Are Not a Gadget, by Jaron Lanier. I’m a little over halfway through, but so far it’s an excellent look at how Web 2.0 and open/free culture are not only damaging our society, but destroying our importance as individual human beings.  It reminds me a bit of Andrew Keen’s Cult of the Amateur, and whether or not you agree with the premise, I strongly recommend reading it.

What I want to discuss here, however, is from one single paragraph of the book.  It’s found at the bottom of page 102 (of the hardcover) and is part of Chapter Two, “What Will Money Be?” in a section labeled, “Pick Your Poison.”  In it, Lanier says the following:

“It is a common assertion that if you copy a digital music file, you haven’t destroyed the original, so nothing was stolen.  The same thing could be said if you hacked into a bank and just added money to your online account. … The problem in each case is not that you stole from a specific person, but that you undermined the artificial scarcities that allow the economy to function.  In the same way, creative expression on the internet will benefit from a social contract that imposes a modest degree of artificial scarcity of information.”

The reason I’ve deemed this specific quote worthy of its own write-up is this: it’s one of the most eloquent and comprehensible explanations of why everything on the Internet should not be free. Continue reading →

Intellectual Property / Money / Web — 3 Comments
18
Feb 10

People Are Probably Going to Steal Your Stuff Online

If you’re a creator (artist, musician, author, etc.), publisher, copyright holder or anyone else who deals in intellectual property, there’s one basic rule about the Internet that you should pay attention to: People Are Probably Going to Steal Your Stuff Online.

It’s been over a decade since Napster first launched, and although there have been steps forward in policing of intellectual property, new distribution deals and other major changes to the Internet, the fact remains that people steal a lot of stuff online.  Some may argue that sharing files or piracy isn’t stealing, but really, it is (of course with the exception fo file sharing of material that is approved for sharing). The simple fact is there are a lot more people online now, and it’s still easy to access unlicensed copies of copyright-protected material.

The point is to keep this truth in mind as you decide how you’re running your business.  Until there’s some sort of serious crack down by the government, or people suddenly have a major change of heart, they’re going to be taking your stuff without your permission – not everyone, of course, but a lot of people.

Continue reading →

Intellectual Property / Money — No Comments
16
Feb 10

DoJ Creates New Intellectual Property Task Force (Great News)

If you’ve ever gotten into a conversation with me regarding politics, you probably know that I’m quite cautious when it comes to trusting the government to really work in the best interest of the people it represents.  Today, however, I am happy to say that I’m quite impressed with the current administration’s approach to copyright and intellectual property protection.

This is because, on February 12, 2010, the Department of Justice announced a “New Intellectual Property Task Force as Part of Broad IP Enforcement Initiative.” (Read the press release)

As a firm supporter of intellectual property rights, this is great news – especially in our current economy.  As it becomes more and more clear that the old economy based on the industrial revolution (read: factories) is dying, it’s becoming increasingly important for our citizens and government to understand that the biggest and most valuable export from the United States is not any physical product we create, but rather Intellectual Property. Continue reading →

Life / Money / Publishing / Writing — 1 Comment
1
Jul 09

Celluloid Cowboy: What Indie Publishing is For

Celluloid CowboyWith the experiences I’ve had so far as an independent author, I’ve come across quite a few like-minded individuals. The problem is that some of them aren’t that great at writing something that grabs me (sorry, but it’s true). Some of them, however, are.  This is where Scott C. Rogers falls with his debut, Celluloid Cowboy.

To be honest, at first I really wasn’t very interested in reading his book. The cover art definitely screamed indie, and the premise seemed a bit cliche (man’s life sucks, is presented with chance to change), and I am also usually pretty wary of author’s soliciting their works to me to read.  (I already have quite a few books on my to-read list.)  But Rogers and I emailed back and forth a few times (full disclosure here) and I told him that if he put it up on Kindle I’d maybe read it.  He did, he emailed me, and I went ahead and read it.

The thing is, this really isn’t my kind of book.  From some of the reviews out there he supposedly has some similarities to Bukowski, who I’ve never really cared enough about to read (and therefore can’t comment as to if he really is like Bukowski).  I will say this though: Celluloid Cowboy is really damn weird. Continue reading →

Life / Money — 2 Comments
4
Feb 09

Plan to Sell Your Creation? Then Be a Business and Claim Your Tax Deductions.

Dollar in Your PocketWhether you’re an author, musician, artist or any other kind of content creator, one important thing you need to think about is whether you create as purely a hobby, or if you intend (or hope) to someday make money off of your creations. For many creators, this intent becomes obvious once you’ve decided to go beyond creating for yourself, friends and family and taking the big step into offering your creations to the rest of the world (with an intent to make some money while you’re at it.)rec

If you’ve taken this step, you’re a business – and you need to start acting like one.

To be a creator doesn’t mean you have to be creating a tangible item either. You could be running your own blog, review website, etc. – and if you are doing it with the intent to make money – and even if you’re not currently making a profit or doing it full-time – you need to treat it as a business.  And, during this time of the year, that means claiming all of your expenses in your tax return.

During my college days I launched and ran Music-Critic.com (I sold it years ago now) – and I ran it as a business. The fact of the matter is that if you’re going to make any money from a venture, you have to pay income tax on that money. This is why you are required to supply your tax ID or Social Security number when you sign up for affiliate programs, Google AdSense, publishing through sites like Lulu.com, and any other instance where an entity is going to be sending you a check.  At the end of the year, if they’ve sent you any money, they’re also going to send you your tax information – which you are required to include in your tax filing.

But whether or not you actually did make any money in the first year or two doesn’t mean you’re not running a business. If you honestly are attempting to make a profit from whatever you are doing (in my current instance, writing a book), then you need to start treating this venture as a business now. Beyond the mindest that running a business requires (seriousness, professionalism, etc.), you also need to run it right financially. And again, at this time of the year, it means writing off any expenses you put into it in the previous year.

Continue reading →