The intent of this document is to perform a comprehensive analysis of what needs a “creator” has. Creator in this context is someone that wishes to create culture or technology that can be represented in a digital form.

Examples of such creators are journalists, authors, youtube uploaders, bloggers and article commenters, musicians, movie creators and more. Although the creators are individuals, a work can have many creators – such as a Hollywood movie.

The needs are formed around the basic idea of “think it, make it, sell it”, but generalised to fit many forms of culture and technology through the framework of “incentives” – something to make you want to create, “means of production” – something that enables you to create, and “means of distribution” – something that allows you to reach an audience.

Incentives

Incentives that motivates someone to create.

Monetary

Different business models for monetary compensation. A common misconception is that monetary compensation is the only or even the prominent creation incentive, and that direct payment is the only business model

Direct revenue

Direct revenue is when you charge a transactional cost per use or copy. The main problem with this business model is that for it to be effective, not only do you have to have mechanisms in place to make sure you are paid when someone recieves a copy, you also have to deny a copy to those that do not pay.

• Sale of physical media
• Licencing derivative works
• Royalties for broadcast
• Mass licencing (Eg. Kopinor and schools)

Indirect revenue

• “Freemium”
  What’s free: Web software and services, some content. Free to whom: users of the basic version.

This term, coined by venture capitalist Fred Wilson, is the basis of the subscription model of media and is one of the most common Web business models. It can take a range of forms: varying tiers of content, from free to expensive, or a premium “pro” version of some site or software with more features than the free version (think Flickr and the $25-a-year Flickr Pro).

Again, this sounds familiar. Isn’t it just the free sample model found everywhere from perfume counters to street corners? Yes, but with a pretty significant twist. The traditional free sample is the promotional candy bar handout or the diapers mailed to a new mother. Since these samples have real costs, the manufacturer gives away only a tiny quantity — hoping to hook consumers and stimulate demand for many more.

But for digital products, this ratio of free to paid is reversed. A typical online site follows the 1 Percent Rule — 1 percent of users support all the rest. In the freemium model, that means for every user who pays for the premium version of the site, 99 others get the basic free version. The reason this works is that the cost of serving the 99 percent is close enough to zero to call it nothing.

• Advertising
  What’s free: content, services, software, and more. Free to whom: everyone.

Broadcast commercials and print display ads have given way to a blizzard of new Web-based ad formats: Yahoo’s pay-per-pageview banners, Google’s pay-per-click text ads, Amazon’s pay-per-transaction “affiliate ads,” and site sponsorships were just the start. Then came the next wave: paid inclusion in search results, paid listing in information services, and lead generation, where a third party pays for the names of people interested in a certain subject. Now companies are trying everything from product placement (PayPerPost) to pay-per-connection on social networks like Facebook. All of these approaches are based on the principle that free offerings build audiences with distinct interests and expressed needs that advertisers will pay to reach.

• Cross-subsidies
  What’s free: any product that entices you to pay for something else. Free to whom: everyone willing to pay eventually, one way or another.

When Wal-Mart charges $15 for a new hit DVD, it’s a loss leader. The company is offering the DVD below cost to lure you into the store, where it hopes to sell you a washing machine at a profit. Expensive wine subsidizes food in a restaurant, and the original “free lunch” was a gratis meal for anyone who ordered at least one beer in San Francisco saloons in the late 1800s. In any package of products and services, from banking to mobile calling plans, the price of each individual component is often determined by psychology, not cost. Your cell phone company may not make money on your monthly minutes — it keeps that fee low because it knows that’s the first thing you look at when picking a carrier — but your monthly voicemail fee is pure profit.

On a busy corner in São Paulo, Brazil, street vendors pitch the latest “tecnobrega” CDs, including one by a hot band called Banda Calypso. Like CDs from most street vendors, these did not come from a record label. But neither are they illicit. They came directly from the band. Calypso distributes masters of its CDs and CD liner art to street vendor networks in towns it plans to tour, with full agreement that the vendors will copy the CDs, sell them, and keep all the money. That’s OK, because selling discs isn’t Calypso’s main source of income. The band is really in the performance business — and business is good. Traveling from town to town this way, preceded by a wave of supercheap CDs, Calypso has filled its shows and paid for a private jet.

The vendors generate literal street cred in each town Calypso visits, and its omnipresence in the urban soundscape means that it gets huge crowds to its rave/dj/concert events. Free music is just publicity for a far more lucrative tour business. Nobody thinks of this as piracy.

• Zero marginal cost
  What’s free: things that can be distributed without an appreciable cost to anyone. Free to whom: everyone.

This describes nothing so well as online music. Between digital reproduction and peer-to-peer distribution, the real cost of distributing music has truly hit bottom. This is a case where the product has become free because of sheer economic gravity, with or without a business model. That force is so powerful that laws, guilt trips, DRM, and every other barrier to piracy the labels can think of have failed. Some artists give away their music online as a way of marketing concerts, merchandise, licensing, and other paid fare. But others have simply accepted that, for them, music is not a moneymaking business. It’s something they do for other reasons, from fun to creative expression. Which, of course, has always been true for most musicians anyway.

• Labor exchange
  What’s free: Web sites and services. Free to whom: all users, since the act of using these sites and services actually creates something of value.

You can get free porn if you solve a few captchas, those scrambled text boxes used to block bots. What you’re actually doing is giving answers to a bot used by spammers to gain access to other sites — which is worth more to them than the bandwidth you’ll consume browsing images. Likewise for rating stories on Digg, voting on Yahoo Answers, or using Google’s 411 service (see “How Can Directory Assistance Be Free?”). In each case, the act of using the service creates something of value, either improving the service itself or creating information that can be useful somewhere else.

• Gift economy
  What’s free: the whole enchilada, be it open source software or user-generated content. Free to whom: everyone.

From Freecycle (free secondhand goods for anyone who will take them away) to Wikipedia, we are discovering that money isn’t the only motivator. Altruism has always existed, but the Web gives it a platform where the actions of individuals can have global impact. In a sense, zero-cost distribution has turned sharing into an industry. In the monetary economy it all looks free — indeed, in the monetary economy it looks like unfair competition — but that says more about our shortsighted ways of measuring value than it does about the worth of what’s created.

–This  may hold more information and classification, its certainly more detailed

http://www.longtail.com/the_long_tail/2009/03/terrific-survey-of-free-business-models-online.html

Recognition

Recognition from peers
Recognition from masses
Recognition from sub-cultures

Expression

A common incentive to create is the need to express something

Express a political or ideological perspective
Express an opinion
Artistic expression
Reporting on current events

Needs fullfillment

Something created in order to perform a spesific function. Examples include

• Marketing content
• Business software
• Scientific papers
• Public medical research
• Educational material
• Defence development

Means of Production

Resources that helps in the creation process

Tools

• Software
• Drawing
• Text-editing
• Video and 3D
• Sound composition

Infrastructure

• Sound studio
• Film studio

Equipment

• Sound instruments
• Recording equipment (Film, photo, audio)
• Paint & Canvas
• Computers

Content to build upon

“isaac Newton: If I have seen further it is only by standing on the shoulders of Giants. “
Also referred to as cultural heritage (?) or technological legacy. Nothing is ever created from scratch, everything is inspired by or created of something that went before. Also the point advancement is that you step forward from where you used to be

• Software libraries (Open Source)
• Audio and video
  Very little audio, photographic or video recordings has fallen into public domain yet due to continuing extension of copyright duration. Open Source content, CC or CA licenced content is fairly scarce. Use of copyrighted content without permission is rampant, where every individual on earth has violated copyright in some form or another
• Text – Shakespeare etc
• Paintings

Assistance

• Instruction and education
• Testing
• Proofreading
• System testing
• Community feedback
• Closed loop feedback
• Education
• Market research
• Direct Feedback

Funding

The more capital intensive content costs, the greater the need for funding. Some content grows organically, like Apache

Means of Distribution

There are two kinds of distribution needs

Restricted distribution

Limited distribution is the need to distribute content to a limited set of users. Example content that requires limited distribution is

• Defence strategies
• Family photos
• Business secrets
• etc

There is also some needs in the private sector where they do not wish for mass distribution of content. Usually this is connected to the need to control a market, and usually is only possible when competition is less than perfect. Examples include

• Apple and Microsoft not making OS source code available for 3rd party developers in order to retain a strategic advantage
• Hollywood distributors not making DVD decrypt keys available to hardware manufacturers who include DivX support in their products

Unrestricted distribution

Unrestricted, or mass distribution entails when the objective is to reach as many as possible.  The creator has a need to connect supply and demand, and to increase demand

See chapter on Distribution mechanisms analysis for further details

Other

The creator also needs to adress his values.

Contribution

The creator wants to ensure that he does not contribute to activities or organisations that go against his values. Typically this kind of contribution is monetary. Example values often shared by content creators are freedom of speech, freedom of expression and human rights.

Reference endorsement

The creator wants to ensure that he is not associated with activities or organisations that go against his values. The creator wants to ensure that his noteriety is not used to promote products, beliefs and ideologies etc that are not his own, or to be otherwise be associated with activities or organisations that go against his values. Examples include a vegetarian being used to promote meat products, a musician that is for freedom of speech being member of an organisation that promotes cencorship etc

Content endorsement

The creator wants to ensure that his content is not used as part of an advertisement (or similar) that endorses products, ideologies etc that are not his own.