How much do you want to pay today?: April 28, 1997 issue of New Thinking

April 28, 1997 New Thinking:
How much do you want to pay today?

Website content management

Home I About I Services I Clients I Contact

New Thinking Home

Subject Classification
Reader Feedback
Subscribing
Unsubscribing
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996

Books by
Gerry McGovern

Content Critical

Gaining competitive advantage through high-quality web content

The Web Content
Style Guide

The essential guide
for online writers, editors and managers

April 28, 1997

How much do you want to pay today?

This Week's New Thinking is brought to you by:
Frank O'Dwyer

Since its release in 1995, the people of the world have been paying Microsoft Corporation a fortune for developing Windows '95. And even though the people that created Windows '95 are not still creating it, the users are still paying. Millions of dollars annually. The users of software are accustomed to paying a price that is "as long as a piece of string" for a finite amount of work.

And at the end of the paying, when the product is obsolete, the users will own nothing. Not a line of code. The DOS and Windows users who paid for Windows 3.1 don't own it. They can't pay contractors to fix its bugs, or to add features. Microsoft still owns the code, even though it has been paid billions of dollars for it.

It's insane.

Why do the users put up with it?

Of course 'software' is not just programs, but is an information product, such as news, cartoons, movies, TV, music, or advice. We are charged 'per copy' and 'per use' for many of those too. What's true of programs is true of all software: the economics of software don't make sense for software consumers - they never have. By stripping away the physical packaging and distribution of software, the Internet may make this very clear to consumers. And the Internet may also allow consumers to rise up and rebel.

All software is bits and is subject to the economics of bits. The economics of bits are blind and relentless and do not care for what the bits represent. In the bit economy there are only two rules that are not negotiable:

Copying bits costs approximately nothing
Creating bits costs approximately everything

Somebody must toil to make the bits, but nobody need toil to copy them. Unlike legal fictions such as patents, copyrights, and licensing, these rules cannot be modified or repealed, and don't need to be enforced.

So against fundamental economics like this, how long can a business model whereby users pay for copying last? The price for copying will have to be very small, and the market very large, for that business to succeed. Also since the "unauthorized" copying of bits is so difficult to stop or even detect, the enforcement measures will need to be those of a police state.

But if the price for copying cannot be high, and the price of creation cannot be free, what then?

Micropayments are one possibility. However, perhaps the Internet brings bespoke development within reach of the end-user, since it enables people with like needs to find each other. If just 1,000 people can find each other and chip in 40 US dollars (about the price of a licensed copy of Netscape), they can hire a pretty good programmer for a year.

If 1,000,000 people can find each other, they have a budget of 40,000,000 US dollars. With that sort of budget you could get books written, movies made, cartoons drawn, albums recorded by your favorite bands. Or you could commission the programming of a web browser, a decent accounting package for your small business, an office software suite.

And own them.

It just might happen. I, for one, would pay 40 US dollars to see
GNU Office or GNU Frontpage.

Rise up and rebel. You have nothing to lose but your barbed wire licenses.

Frank O'Dwyer

Next issue: The information mile
Previous issue: How true is the word?
New Thinking homepage

New Thinking Newsletter
Subscribe to this free weekly newsletter covering the role and function of content on the Web.
More info | Privacy policy
Read the current issue

Content management seminar feedback
"Gerry's presentation was very well received by the more than 400 higher education delegates. I've chaired this meeting since 1994 and very few speakers have generated the same level of enthusiasm. Wit and wisdom is always an unbeatable combination."
Bob Johnson, American Marketing Association

“Excellent presenter ... thought-provoking and relevant. I hope we can persuade him to visit us again one day.”
Malcolm Davison
The British Association of Communicators in Business

"Hearing Gerry McGovern speaking, one can feel that he truly masters the subject of content management. He was voted ‘best speaker of the conference’ by delegates."
Toon Lowette
European Association of Directory Publishers

Find out more about Gerry McGovern's seminars

But if the price for copying cannot be high, and the price of creation cannot be free, what then?