The Big Pool of Money experiment

At last night's meeting of the Columbia chapter of Social Media Club, I mentioned something I heard suggested in an off-hand way at the Infovalet Conference in May. What if every American paid a fee as part of his or her monthly ISP bill, and then that money were divided up among content creators?

Of course, what I found ironic about this back in May was that the people suggesting it weren't suggesting that ANYONE be able to share in this revenue. The idea was that only content creators who happened to also own printing presses and/or FCC licenses would be eligible. That's absurd on its face, which is probably why that idea hasn't gone anywhere. Try selling that politically.

But as I drove home to Charleston, I reconsidered the idea. Which is why I want you to play along in a thought experiment with me.

What if we all paid into a fund that could be distributed among EVERYONE who creates content, of any kind, that can distributed online? Bloggers, filmmakers, musicians, reporters, pornographers, comedians, ANYONE.

How would it work? How could it be administered? 

Ten assumptions

The thing that got me excited on the ride home was the result of one realization. Instead of assuming that you'd have to create a system that applied to everyone, I realized that creating a system in which people had to nominate themselves for participation in the program would make everything far easier.

For instance, while it might be nice to get paid for the occasional Xark post that goes viral, I don't write Xark for money. None of the people who write here do. So if you offered me the chance to be paid for what we publish here, my answer would be a qualified maybe. I'd appreciate the opportunity, but given the requirements that would likely go with receiving the money, I might well decline and just continue to blog the way I do now.

Hence, Assumption No. 1: Anyone wishing to be compensated for the content they create and publish online would have to agree to abide by a set of rules.

Most likely, this would mean agreeing to a series of disclosure statements, plus web standards and code that would allow for the tallying, tracking and auditing of web traffic, activity and bandwidth. It would mean working in accordance with copyright rules. It would mean submitting one's online activities to some degree of public scrutiny, if only to allow robots, regulators and agencies like the IRS to look into our books to make sure we're not attempting to defraud the public by padding traffic and hacking the system.

You couldn't create a system like that for the entire Internet. But you MIGHT be able create a voluntary system for content creators.

Assumption No. 2? Traffic wouldn't be the only metric. For instance, if I wanted to be paid for the number of people who read my eBook, you wouldn't want to compute that value by tallying the number of people who looked at my home page. And since the value of an eBook and the value of a free music download can't be equated by studying the bandwidth involved in the transmission of a file, then we'd need to figure out some way of assigning values to types of content.

Assumption No. 3: The system would have to rely on content creators tagging the content for which they wish to be paid.

Imagine, for example, that I want to be paid for people who read Xark. I agree to meet a set of standards, I file the necessary disclosures and tax forms, and install various regulatory bots and code snippets in my meta fields. And perhaps there's an automated tag on all my blog posts that codes all my text to be valued by the page view. What about when I put up a video?

Well, it would be up to me to tag that video with the appropriate code. If I don't, I don't get paid for that content type. Same if I want to be paid for a graphic, a cartoon, etc. I've got to be sure that I identify the content for the bots. I have to certify that the content is mine, that I meet all copyright restrictions, etc. 

Assumption No. 4: Various groups would need to have some input into how to value certain types of content, but decisions would have to be made for the entire system. What's the value of a single ebook download? What if you stream my five-minute video? What if you download my five-minute video? And so on. Determining these values would likely be highly politicized, with enormous lobbies trying to game the regulatory system. Just assume that, because in this case, government would be picking winners and losers. The question is, can we imagine a way in which we could do this with some degree of fairness? Could we create a system that controls hacking via lobbyists and corruption in the same way that we control hacking via click fraud and botnets?

Assumption No. 5: Since content creators would be receiving a share of the Big Pool of Money (BPOM), free content enablers could / would put in for a share. Consider YouTube. It hosts our videos for free. But what if I put in for compensation? What if my video goes viral and gets a million views, earning me something on the order of, say, $10,000? Shouldn't YouTube have the right to take its cut? I think so, and I think this could be a great way for us to extend "free" Internet services for most of the population. 

I'm not saying that YouTube would charge everyone a bandwidth surcharge. I'm saying that videomakers who host on YouTube, put in for reimbursement from the BPOM and then receive payments exceeding some arbitrary threshold (say $50) could be subject to YouTube taking a percentage for hosting the content. This could apply to P2P filesharing, or to music services like Pandora, etc.

Assumption No. 6: The tagging I mentioned before would likely have to operate as some form of digital watermark, enabling the auditing agency to "ping" for distribution as well as track usage as it occurs. So when I tag my eBook, or when Don tags his video, our "makers mark" travels with the file, no matter how many times it is replicated and retransmitted. This isn't really a question of punishing end users, but of auditing activity, so that fraud would be easier to spot.

Assumption No. 7: Fraud would have to be detectable via algorithm, and enforcement would be both a constant challenge and an evolving process. As soon we we'd launch this, people would begin scamming it. But this isn't a reason not to do it. People are constantly scamming everything, and we just deal with it as part of living in a civilized and networked world.

Assumption No. 8: Some people would still get stuff for free and not pay into the system. For instance, other nations won't charge the fee, which means users there won't pay into the system. So there are going to be inequities. 

Assumption No. 9: The value of content would rise and fall based on the amount of money that flows into the system and the volume of total activity. In other words, the value of a page click would be affected by the total number of pages clicked. The value of an individual eBook would relate to the total number of all tagged eBooks downloaded within the period. 

Assumption No. 10: None of this is worth spit without copyright reform. Period. 

Outlining the system

For the sake of argument, imagine that we created a system that collected the equivalent of roughly $1 per internet user per month (since the fee is attached to an ISP account, the monthly fee would have to be based on some assumption of an average number of users per account). That's about $250 million per month, or about $3 billion per year.

I assume that the system would be revenue-neutral. To wit: The cost of administering and enforcing it would be covered by the taxes levied against the payments. So that leaves about $2.25 billion per year to be distributed. To put that in perspective, legal digital music downloads in 2008 amounted to $1.6 billion.

In other words, a dollar per person per month isn't going to replace book sales or iTunes. It's not meant to. Anyone who has a business model that currently pays them for content should not be affected.

Instead, the BPOM would replace the idea of content paywalls, micropayments, etc., with a shared resource. It would pay content producers based on usage patterns without forcing them to become bill collectors. And most importantly, it would get us out of the unresolvable question of fair use. When is a link to your content fair use and when is it theft? With the BPOM, I don't think anyone will care about that question anymore.

Today the Associated Press is brandishing its saber about some absurd vision of protecting its copyright from aggregators and portals that already pay for its "services." Under BPOM, where inbound links to content increase revenue, AP would actually be ENCOURAGING others to aggregate its stories. In fact, aggregators might well come to AP and ask for a piece of the BPOM action based on the value of their links.

Is there enough money in the pot I just described to "save American newspapers?" Of course not. But let's continue this thought experiment just a bit further. If content usage follows the pattern of The Long Tail, then about half of the $2.25 billion in my example would be divided up among mainstream media. That means that we'd have $1.2 billion to divide between the rest of the people who are creating content for the Web.

Let's say that roughly 22.5 million Americans (9 percent of American Internet users) put in for some share of the original-content pie. That's about $50 per person, per year, on average.

But this money would more likely be distributed on a curve. And while someone else will have to the math for this distribution, by my estimates you're talking about several million Americans receiving thousands of dollars a year for their efforts, with the top 5 percent (probably more than a million Americans) able to earn a modest living off the content they create and distribute.

So, my questions to the panel:

Is this worth exploring?

How should it be run?

Who would propose it?

How would we proceed?

And so on.

Discuss.

Comments

[Dan]

The conversation so far is over on FriendFeed.

http://friendfeed.com/xarker/14a279fd/big-pool-of-money-social-media-thought

[Katherine Warman Kern]

Let's start a club. I've already suggested same to: @37signals & @billsledzik

BTW here's my rough idea so you can see how similar our thinking is: http://bit.ly/FqrZP