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Intervention by Denise Caruso Read Intervention by Denise Caruso, Executive Director of the Hybrid Vigor Silver Award Winner, 2007 Independent Publisher Book Awards; Best Business Books 2007, Strategy+Business Magazine

GETTING PAID FOR INTANGIBLES

by Mary Adams ~ March 31, 2008.
Permalink | Filed under: Collaboration and Sensemaking, Hybrid Vigor, Valuing Intangibles.

Larry Downes had a great blog post a couple weeks ago on The Writers Strike and the Battle for Virtual Value. Downes points out that the traditional media, with whom the writers were negotiating, have not figured out how to make money on the internet. Nevertheless, he asserts, they spent over $2 billion fighting about “revenues that do not yet exist from channels that have not yet been created.”

Contrast this with the recent New York Times editorial by songwriter and author Billy Bragg, The Royalty Scam. Bragg tells the story of Bebo, the social-networking site that grew to 40 million members in two years and, in Britain, apparently ranks with MySpace and Facebook in popularity.

A couple years ago, Bebo founder Michael Birch asked to meet Bragg after Bragg had lobbied MySpace on its proprietary rights clause. Birch assured him that Bebo would always put the interests of artists first—although this “support” never included any kind of royalty to the artists contributing content. Last week, when Bebo sold to AOL for $850 million, Bragg observed:

The musicians who posted their work on Bebo.com are no different from investors in a start-up enterprise. Their investment is the content provided for free while the site has no liquid assets. Now that the business has reaped huge benefits, surely they deserve a dividend.

If Bebo owners had shared this purchase price equally (and kept nothing for themselves) each member would get $21. Is this they way it should work? Or are some members more equal than others? What is fair compensation for building a site versus providing content? Could content creators band together and share in the revenue from a marketplace they control? Or should they use sites like Bebo for advertising and create their own direct sales model on a dedicated site owned by the artist?

The fundamental question is whether a Web 2.0 world is ready to compensate content creators directly—and take the traditional media out of the picture entirely.

2 Responses to GETTING PAID FOR INTANGIBLES

  1. Dan Guglielmo

    Mary, this is as interesting as it is relevant to the professional social network we are contemplating in Boston. Content is important and so is fairness. How does one go about distribution of fair ownership to those adding content without running afoul of the complex and punative SEC rules and regs??? I think the equalizer will have to be something other than ownership, such as points towards membership.

  2. Mary Adams

    Thanks for this Dan. I hadn’t thought that broadly but you are right-the concept of ownership in a distributed economy will have to change.

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