Money and Licensing, Part Two
Now, my glowing statements about wanting to give free designs to the community all leave out the general economics of design. The conventional wisdom outside the open source community seems to be that you can’t make money off it. Inside the community of course there are lots of ways people are making money off it, from promotional use (getting consulting jobs by demonstrating competence in the open source world, aka getting paid not to talk about what you’re doing) to product identification, where people are in the business of making the things they design because people are interested in buying from the originator of the design rather than a copyist.
My earlier discussion on non-commercial licenses sounds quite a bit different from that, and this is in part because I see Thingiverse as potentially the beginning of a new model for commercial digital design: the Collaboratively Licensed Artifact. (I will refrain from creating a Three Letter Acronym of this for now.) These artifacts can flow fairly naturally from the organization of Thingiverse: one designer combines other designs, which are a heterogeneous mix of other commercial and non-commercial licenses, to make a product released under a non-commercial license, and sold as a complete artifact or licensable design.
Artifacts of this nature would require some form of contract negotiation, perhaps also through Thingiverse (although maybe we’d want someone like the Creative Commons to help us with the contract stuff.) A properly executed example of this pattern would mean that the end designer would be paid for commercial use of the finished design (or sell copies directly), then pay all the contributors down the line as per the agreed royalties.
So what would this mean for Thingiverse?
I think what would happen, if this model got off the ground in a big way, is that the design economy would begin to stratify somewhat, but in a fairly benign way. First, you’d have some designers who are designing for the sheer hell of it, and who recklessly stamp “Attribution – Share Alike” on everything they do. The quality of their designs would vary from jaw-droppingly excellent to utterly useless. (As I’ve said, we’re going to need better search functions the more designs show up.) Next, there would be people who aren’t trying to make a living out of design, but who would rather it show up as a net positive on their balance sheet, and so are doing some casual amount of non-commercial licensing. Their designs might in many ways form the bedrock of the more commercialized sectors of shared digital design. With the pros borrowing from them (and sometimes even giving them a few bucks in royalties!), there would be some pretty popular designs in this arena. Then you’d have the pros. There wouldn’t be many of them, maybe only one or two at first, but they’d be doing this as their day to day job. They’d draw together a fistful of existing designs and crank out two or three models of powerful usefulness and keen design a week. Possibly making use of a pay download feature, (in my rosy scenario, no DRM of course) they’d be selling designs and perhaps printed products, based in part on non-commercial licensed designs which they pay royalties to use commercially.
This economic system, if it could be made, would result in a really dense profusion of downloadable, printable objects, many of which would be both useful and beautiful. On average, the quality of free designs would be less than the quality of pay ones. The gap in quality would determine the price of those designs. There would be outliers in quality, leading to endless discusion about how “The new Hamilton Hedge Clippers are just the old HC1.0 design with some damn gears stuck on ‘em, don’t bother,” and so on, but on the whole I think the system would be worth it.
And maybe it’s just me but if I ever heard this sort of software-industry-inspired discussion about physical artifacts I think it’d pretty much make my year.
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Rob Myers Said,
May 25, 2009 @ 1:20 pm
NC’s real effect is to give away all the value of a work and discourage the commercial use of derivatives by the original designer. It gives away all the value because anyone can download and print out the work (or pay a fab lab to print it for them). It discourages use of derivatives because even if you can track down the downstream designer, once you mention money they may want more than you are willing to give.
Rather than encouraging professionals to steer clear of Thingiverse because of NC, make it a resource like GNU, flickr commons, Open ClipArt Library or Wikipedia that professionals can save costs by using and make profits by charging to extend. This is the real model that has emerged from software development. It ensures that the works people contribute and use are free as in freedom rather than just loss leaders or white elephants. Inalienably so in the case of GNU and Wikipedia with their copyleft licenses.
Create a bigger market and take a slice of that rather than trying to get a few dollars here and there from a copy of the existing market. Blur the distinction between professional and amateur and capture the design and marketing value that creates. Have confidence that Thingiverse’s radical new approach to design will create radical new business opportunities. It will, if it isn’t hobbled by licensing half-measures like NC.
Allan Ecker Said,
May 25, 2009 @ 2:23 pm
Interesting take on it– I think my view is a little colored by my long romance with micropayments (commence flaming!), and my light experience with GNU.
I think leaving the choice of license up to the user is the right call– having many different kinds of licenses can work, so long as it’s possible for searchers to pluck the licenses they want from the heap: just as Flickr allows you to search by a *specific CC license*, if Thingiverse has a diverse design community, one will be able to search the Commons that best fits the use.
Of course I can’t speak too firmly about all this, after all, I’m designing almost exclusively CC-BY-SA myself!
Demented Chihuahua Said,
May 26, 2009 @ 8:46 am
Nice post but a bit to starry eyed for me. Here’s what I think is going to happen based on recent history and how I myself tend to work.
I don’t pay for things if I don’t have too. I’ll choose the free over the fee every time even if it takes some work to make the free work right. This is because, A) I like tinkering and fixing stuff, and B) because I don’t have as much disposable income as I’d like.
Put whatever type of license on stuff that you like, human motivations will win out every time because that’s what humans do. The RIAA is learning this by being smacked in the face with it over and over. I think we are going to see a thriving community built around fabbers and RepRaps and other “Maker” machines but I do not think we are going to see any sort of “economy” to speak of.
I design stuff and give it away for free, because I like too, because I think it makes the world a better place. People are free to take that stuff–because they will whether or no I give them permission–and do what they like with it. If people don’t want their designs stolen or used without their permission, don’t put them online. Simple as that.
Licensing issues come down to a matter of authority. If you have a stick and can wield it, you get to make rules. If not, then not. I love Thingiverse and believe it will make a thriving community, with our without licenses.
Demented
Allan Ecker Said,
May 26, 2009 @ 9:18 am
I’ve been trying to pay a lot of attention to economics lately, as I think a whole lot of the previously assumed “basic rules” are headed for some big changes in the next decade or so. 3D printing will amplify the production of “non-monetary value” that has been going on in software for a long time already. As that happens, part of the economic growth we experience will be coming from the un-moneyed sector.
As I become more convinced of this line of thinking, I get less enamored with the concept of micropayments and drift more towards your viewpoint on this subject, although I still don’t think I’ve fully made up my mind on how I expect all this to play out either.
Larry James Said,
May 29, 2009 @ 11:54 am
I’ve had an interesting idea on licensing and the economics of design. Having designed and fabricated parts and tools by hand in the past. it’ll be a whole hell of a lot easier when I can just print them out from the designs.
If I find them useful, I’m sure there are other people out there that will find them useful as well. In the past I could send the designs out, pay a lot of money, and have a bunch mass produced, try and sell them, etc. which was appealing but there has to be a better way.
now enter print on demand for 3d designs. I upload my design and everyone who has a printer can print their own if they like. one of the perks of having your own 3d printer. but if they are going to sell them either wholesale or retail then I’d like 10% of the sale. in addition if the design is any good more than likely I’ll be selling the objects from my own storefront and/or online. maybe my printer(s) can’t handle all the orders or I’m away doing something else and I subcontract the printing out to someone else who has a 3d printer and have them drop ship the items to my customers (obviously paying the person who did the printing). just a couple of ideas on how you may be able to ditch your day job and do product design and/or 3d printing instead.
Allan Ecker Said,
May 29, 2009 @ 12:12 pm
This is, theoretically, one great use of the creative commons non-commercial license.
I’m not ready to make a call on whether models which look more like GPL will be more successful, but I think it’s definitely possible that non-commercial licenses, in concert with commercial to-fab licenses, could make designs commercially viable, effectively deleting part of the shipping chain from a business model.
I think as long as Thingiverse keeps growing, there will be enough designs under enough licenses to test BOTH models. And then we’ll see which one works better.
Demented Chihuahua Said,
May 30, 2009 @ 7:33 am
But, if most people have a 3d printer, why would we ever need to sell or buy stuff like that? I think the problem is that people will get a 3d printer so that they don’t have to pay for this sort of stuff.
Not that it is really a problem, at least in my book. People design for free regardless. I do, others do. Call me radical, but I think the economy model of these sorts of small objects is doomed.
Demented
Allan Ecker Said,
May 30, 2009 @ 1:05 pm
I think it’s doomed too. But I also tend to see there being a significant (~10 years) frame where most people won’t have a 3D printer, but a lot of people will. 3D printing will be something most people go to the hardware store or towards the end, the supermarket to have done.
But once the technology hits some threshold, there’ll be a turnover and nearly everyone will have assemblers.
At that point, the economy of selling printed objects will die for good. But I think there will be a window of time where people will be selling things they printed.
After that, I still imagine an iTunes-like sales model operating for a lot of objects, not so much because GPL/CC alternatives don’t exist, but because particular styles won’t be in the GPL/CC and they’ll be worth buying.
It’s also possible that the neo-socialism of design-for-nothing will alter the economy so much that such thoughts will seem quaint and silly, but absent a crystal ball, I’m still in favor of keeping certain pieces of “legal infrastructure” around until we’re more sure we won’t need them…
Roger Waggener Said,
June 3, 2009 @ 9:31 am
There will always be skill/interest tiers that lead to economic opportunities for people that span the tiers.
The case I think of immediately is the commerce of objects in SecondLife where it costs noting to make an item (it may cost to make it persistent, but these costs are equivalent to raw material cost- or may be included in account fees) except time and effort- and the cost to have learned the skills.
Any SL paid member (who is interested and has taken time to learn how) can do it- but there is still a thriving economy of people paying for virtual stuff someone else made.
That said, how much more might there be in ‘First Life’?
Even when you can take a jump drive to the grocery store and print out your baubles, there will be multitudes of people that will be happy to pay (micropay, perhaps) for designs to print at that grocery store.
Isaac Rebel Said,
May 29, 2010 @ 2:46 am
It’s very interesting what Roger came up with. We can indeed see an evolution like in second life.
In first instance, there will be opportunities for people to make money and some will also get rich. Then there will be more and more physical objects being created.
The competition in this market will become so great, and people will keep adding existing things which will lead to prices aproaching zero or near zero.
This is what is happing (has happened) in second life.