zed equals zee

[click for full Diesel Sweeties strip]

The topic of creators and money seems to be in the air at the moment. Last week, Amanda Palmer wrote a blog post, “Why I am not afraid to take your money,” which is burning up the Twitterverse and the blogosphere, and a recent PBS MediaShift article discussed financially self-sustaining webcomics.

In the webcomics article, Richard Stevens, the creator of Diesel Sweeties, describes how he makes a living off his work by selling merch, like t-shirts. His site gets about 30,000 hits a day; he reports that he only needs one or two percent of these readers to buy something to make the whole thing self-financing. While he provides something to everyone for free (the comics), he also provides the opportunity to support the comics by buying something.

It dawned on me why this sounded familiar when I turned on my radio to discover that WBUR is in the middle of a pledge drive: it’s exactly the model that NPR has been using for decades. It’s the nature of digital distribution that, above a certain threshold, works have an incremental cost of zero: once something has been created, the cost of instantiating and distributing the creation is pretty much negligible. NPR is one of the few cases where this was true in the pre-digital age: once they’ve paid for their news bureaux, staff, and transmission, it doesn’t matter if ten (or a hundred, or a thousand) extra people tune in—it won’t cost them anything extra. And even though only a tiny fraction of their listenership donate, it’s enough to make up 30% or so of their operating budget. NPR puts more emphasis on your money supporting the programming and less on the Car Talk CD you get, while Stevens puts more emphasis on you getting the cute red robot and less on supporting the comic, but the net result is the same: the fraction of the people who pay for physical items can support the whole digital (or radio) endeavour.

NPR and webcomics are native to the world of zero incremental cost, and have a financial model that reflects this. The music industry, on the other hand, does not. They were in the business of recouping their costs with every CD sold, and now they are trying to recoup costs with every track downloaded. But that’s clearly not working anymore. More on this to come.

PART 2: What will music fans pay for?

MP3: The Flying Lizards – Money (extended mix) [buy]