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Exercise: What do you sell when copies are free?

Imagine that you run a business that makes things: hosepipes, spectacles, car tyres, roof tiles, toys, and so on – pick one, and picture the business in your mind. It’s likely that your business sells a product. That product was once a prototype, and now you sell copies of it over and over again.

Now, imagine your business in a world where copies of anything manufactured, anything at all, are essentially free for anyone to make for themselves: TVs, cars, clothes, furniture, toys, building materials – anything manufactured. Millions of designs for these things are available online for people to download – some paid, some pirated. A user just has to download a design and print the item for themselves on a 3D printer. If they use a free design, their only cost is electricity and cheap, raw plasma.

If you think I’m fantasizing about a galaxy far away, check out Makerbot Industries, where you can buy yourself a 3D printer for $900. Or Shapeways, a company in the Netherlands that will 3D-print your product for you – they sell 3D-printed lampshades, jewellery, machine parts, crockery, and more – in plastic, sandstone or metal. And Bespoke Prosthetics will print you an artifical limb at a tenth of the cost of a conventionally manufactured one.

These 3D printers get cheaper and more sophisticated all the time, so that world is coming. If it arrived tomorrow, how would your business make money? What would you sell?

Remember, you can’t charge for printing or delivering physical objects, because anyone can “print” their own in their home.

In groups of two or three, take five minutes to think of how your business is going to stay afloat. What are you going to sell? Think carefully: your business idea must not rely in any way on selling or controlling the act of making a copy of something. Copies are free.

Copying is at the heart of anything digital: when information moves from one place to another, it replicates.  The Internet itself is made of copies and copies of copies, all of them essentially zero-cost, bar the raw materials of cables, terminals, bandwidth and power. As publishers look to adjust their business models to cater for a digital world, they have to find business models that don’t rely on controlling copies of their work.

And yet it’s still hard to think of business models, especially in manufacturing, that don’t control the distribution of copies, where each copy is sold for a unit price or a subscription.

Kevin Kelly has written an important piece on this. He lists eight things you can charge money for in such a world:

  • Immediacy: Getting something without delay, like going to opening night at the movies, or getting Time magazine the moment it leaves the editor’s desk. When a person buys a song for a dollar from iTunes that they could get elsewhere for free or a fraction of that cost, what are they actually paying for? Are they really paying for the copy of the song? No, they’re paying for the convenience of finding and buying it quickly and easily.
  • Personalization: Say, a concert recording “tweaked to sound perfect in your particular living room … Aspirin is free, but aspirin tailored to your DNA is very expensive. … You can’t copy the personalization that a relationship represents.”
  • Interpretation: Paying to know what something *means*. As Kelly says, “soon pharmaceutical companies will PAY you to get your genes sequenced. So the copy of your sequence will be free, but the interpretation of what it means, what you can do about it, and how to use it … will be expensive.”
  • Authenticity: People will pay to know they can trust what they’re buying. Think of software, original recordings, lithographs.
  • Accessibility: People will pay to let others store and organise their stuff, even when the stuff itself is free.
  • Embodiment:  There are many ways to recast and embody digital information in ways we can’t do at home. Kelly wonders, “hi-res on a huge screen? Maybe in 3D? … bright white cottony paper, bound in leather. … Laser projection, holographic display, the holodeck itself! And nothing gets embodied as much as music in a live performance, with real bodies.”
  • Patronage: Kelly puts it simply: “audiences WANT to pay creators. Fans like to reward artists, musicians, authors and the like with the tokens of their appreciation, because it allows them to connect. But they will only pay if it is very easy to do, a reasonable amount, and they feel certain the money will directly benefit the creators.”
  • Findability: As there is more and more stuff availabel to us, finding what’s worth spending time on becomes difficult. People will pay to be shown what’s good, and businesses will pay for their products to be found.

He calls these ‘generatives’:

A generative value is a quality or attribute that must be generated, grown, cultivated, nurtured. A generative thing can not be copied, cloned, faked, replicated, counterfeited, or reproduced. It is generated uniquely, in place, over time. In the digital arena, generative qualities add value to free copies, and therefore are something that can be sold.

By now you’ve realised, of course, that book publishing has been up against cheap home and office printing and photocopying for years – 3D printing is really no revolution here. We’ve had a long, long time to figure out what to sell when selling printed copies of books is no longer a viable business model. It may be that publishers and retailers will keep selling copies of books one by one for many years. But it is going to get harder. And great screen technology from companies like E-Ink, Qualcomm, and Pixel Qi are only going to make it harder still. Publishing companies that will thrive are building on their generatives now.

Arthur Attwell 16 April 2010
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