A couple of weeks ago at the Free Culture Research Conference in Berlin I organized a ‘freedom and sharecropping’ session that started with two questions: (a) when is ‘free’ necessary for the market? and (b) when is it ‘sharecropping’?
A business should consider free/open licensing and/or free (as in gratis) access to its content or services when:
- A product, idea or business is in the early stages of development
- The business depends on very large numbers of transactions which would be too costly to negotiate individually
- The business wants to position itself as a middleman; a platform enabling large numbers of transactions as above
- There is a vision to build an open innovation ecosystem around the service or product that the business is offering
- There are strong network effects in the way the product or service operates; free/open licensing can be a boon in terms of promotion but businesses will also be concerned about monetization and possible lost revenue
- Free can be a complement or the icing on the cake on top of a commercial offering, i.e. a differentiating factor rather than an enabler of a very large number of ‘commodity-like’ transactions
Why should a business avoid implementing a ’sharecropping’ scheme where it lets others upload share and remix their content but does not grant them rights to their creations?
- Because its users may be sensitized to the topic and perceive it as exploitation, which will inevitably backfire
- Because this will work against the open innovation argument above
Detailed comments after the jump…