Panel 4: Uncommon Business Models

Panel 4 takes the discussion from yesterday a step further. Harry Verwayen (Kennisland) recaps yesterday’s discussion. We have learned from yesterday about the commons, the social contract that we have. A place where archival materials should be available and where the market has to join in. It is an investment worthwile like INA did in France and Images for the Future in the Netherlands. But, there is a cost aspect. So there should be a sustainable business model. How are we going to do that?

We have to keep two aspects in mind. Verwayen points out that there is a paradigm shift going on inside the archives themselves. These organisations have to transform completely. Also, it is neccessary to look outside of the archives. We have to listen to what is going on with piracy and p2p networks as Jamie King was talking about yesterday. So, the aim of this session is to come up with models that could be usable and reflect on the ‘uncommon’ side of it. Verwayen encourages us to try to get beyond the restrictions that are constraining in this session.

7 models

There is always a cost and revenue aspect. Verwayen talks about 7 possible open business models.

  • subscrtiption model
  • pay per view/ download (ODE)
  • free + added quality (Prelinger Archives)
  • freemium (+ service) (Flickr, Linkedin)
  • advertisement (NY Times)
  • sponsorships (Memory of the Netherlands, Google Books)
  • community engagement (Tribler)

Most of the money was traditionally earned in a closed environment. Now, how can we do that in an open model?

Open business models in scientific publishing

Jan Velterop, CEO of Knewco (www.knewco.com) is one of the leading experts on Open Access and open business models in scientific publishing. He states that he doesn’t believe in open business models, but he does believe in ‘opening up’ business models. Information is ‘funny stuff’ in this respect that unlike food, after you consumed it, it is not neccesarily gone, he explains. The problem with information is its ‘natural state’. It is open. It goes where it goes. So how do we make money with information or at least make good the costs?

According to Velterop there are 3 potential sources of funding. The reader. Here copy right is the construct of making money. But, subscriptions come with restriction and this is something that is not alway desirable. Second, the author, the provider of information. Actually this is more common than people think according to Velterop. A classic example is advertising. Third, 3rd parties.

The key is the one who has the biggest interest, is the one who pays. You see that most business models, for example in the newspaper industry, move to the author or the sponsor who pays instead of the reader. Open access in research publishing works, because in research publishing there is a big interest form the author. Closing deals as a publisher with the authors is a way to give open access to information at least for scientific publisher Springer.

Last FM: an open model on music

Jonas Woost, Head of Music at the pioneering music company Lastfm (www.last.fm/dashboard), talks about their open business model successfully used in an industry that has shown to be particularly vulnerable in the open environment of the internet, the music industry.

The ’scrobbling business’ is the core thing of Last FM, he explains. You come to Last FM and run some software. The software – ‘a kind of spyware’ – is listening to what you are listening. On the basis of what you listen, you can socially interact. Recommandation of music is based on “collaborative filtering”. Further on, artistpages are created automatically on LastFM. Like wikipedia users can add information to their profiles. Than you got two services. A streaming radio like service in which the key is ‘discovery’. There is not much interaction, but users can dicover new artists and new music. Second, you have free on demand streaming. You can search, find and listen music on demand.

Woost talks about their relationships with rights owners. Artists and labels get paid every time someone listens to a song. Also, an artist without a record label can sign up and profit. The more you listen, the more you get paid. The traditional situation was that you got paid per CD so somehow this system is more fair.

LastFM makes money in 3 ways. Ofcourse, there is ‘visual advertising’. Banner advertising. Second ‘affiliate links’. You will find links of all music displayed on LastFM going to 3rd party retailers. This is a “win win win situation”. The music fan is happy to find new music. Label can sell their CD, and for every successful transaction LastFM receives a commission. Third, a subscrition offering. The current subscription service gives you certain extras on the website if you want. According to Woost they will soon launch a new model which includes an unlimited anount of streaming on LastFM.

Jon Phillips (Creative Commons) asks if LastFM is just another face of relocking music. After all it is recently bought up by CBS. Woost denies. According to him there wille be no locking. It makes sense to make it free for the user. We make it available as free as we can, Woost argues. Anyone who wants to build a player, can. You don’t have to use LastFM to play the music. The only restriction is that we can pay the right owners.

Panel discussion

Together with pannelists Peter Kaufman (Intelligent Television), Roei Amit (INA), Rick Prelinger (Prelinger Archives) and Eerde Hovinga (NIBG-tbc) Verwayen, Woost and Velterop reflect on the impacts of these models on audiovisual archives.

Can you build something like LastFM for audiovisual archives? Woost thinks you can. But, there is a big diffenrence in listening music and watching video. You can listen to music all day doing other things, with video not. Either way, recommandations are key in both and that will be a huge challenge for the video industry. The panel argues that video can also function as background on your TV, this might be a profitable kind of use of archival video too.

So, what if Google comes along and offers your archive to pay for the digitization. The only restriction is to make it available on Google. Hovinga states that in he wouldn’t sell his archive out for Google just like that, but will take those offers as a serious possibility. According to Prelinger this is the most impertinent question to ask for in audiovisual archives.

Amit argues that archives will not going to have a sufficiant income from the B2C side like LastFM. In about 20 years the value of the audiovisual archives will be less than now, as every day there will be more content available. The value of the audiovisual archives will be further pushed away into the Long Tail where it is hard to make a lot of money. According to Amit this is the reason why there has to be public money in if you want to give the commons access to it.

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