Innovation in the gaming, music and software business models

Libertarians do it without IP protection

Intellectual property advocates say that the use of information needs to be protected by law. But even in today’s world, where this protection exists, there are commercial developers who are trying business models that are relying less and less on that protection.

The latest example is the Humble Indie Bundle 3. For short periods, they offer a bundle of games with no copy protection, and the customer decides how much to pay. You can pay as little as 1 cent to get the bundle. So actually, these aren't purchases but instead donations for games that can be gotten for free and shared with friends and family without any problems. The average amount per downloader that is actually given is over $5 (Linux users average more than double that). They've raised 1.6 million dollars as of writing and there are still 4 days left in the promotion.

So why are people giving more than a penny? People appreciate what is being offered, and they like to reward that. And when you reward a developer of an enjoyable game, that is offered under favorable terms, then this serves as a signal for that developer to keep doing this work in the future, so that the consumers will have new games to enjoy when they’re done playing the current ones. Essentially, when you donate to a developer, you’re saying: “Please keep doing what you’re doing”.

Music: Pomplamoose

You can see something close to this model occurring in music. The musical duo Pomplamoose release all of their songs in high quality on YouTube. One of their innovations is the VideoSong, which means that even though their songs are often highly mixed, when you hear a sound you will also see them performing it (as it was done live). This makes it more intimate and open.

But because all of their songs can be listened to without limit and downloaded with simple tools, when you purchase their songs (as with the Humble Bundle), it’s practically a donation. So here too, when you donate to them, you’re asking them to keep doing what they’re doing, and giving them the means to do it.

Software: Ardour

The next step up in a business model that doesn't rely on intellectual property protection is showcased by the free and open source ‘digital audio workstation’ software Ardour (for Linux and Mac). They currently have 252 people with a donation subscription. And they have ‘bug bounties’ where people can pledge money to have specific problems fixed.

Let’s hope that instead of the old ways, these business models will be copied and improved upon, because it clearly works.