Subject: experience as competitive advantage
From: Zimran Ahmed <zimran@creativegood.com>
Date: Mon, 16 Jul 01 23:23:04 -0400

i wanted to ask the list what they thought about the ownership experience 
of free-software being better (and so giving it competitive advantage) 
over proprietary software.

There was a recent Salon article about how Microsoft's licensing regimen 
made owning Windows software unpleasant for some public schools.
http://www.salon.com/tech/feature/2001/07/10/microsoft_school/index.html

Now, while Microsoft is within their legal rights to enforce copyright, 
the draconian activation protocols they have planned under XP will 
degrade the overall ownership experience of windows users. OSS, of 
course, has a better ownership experience when it comes to making copies 
etc.

The idea is that the unpleasant, strictly enforced copyright enforcement 
schema being built into the network will give open data (be it code or 
content) an experiential advantage over copyright/controlled data. In 
some industries, the secondary markets created by freely-shareable 
intellectual property may be lucrative enough for them to be a winning 
strategy, while in others, the intellectual property may be best kept 
proprietary. So some software fields may operate best by open-sourcing 
their code, while others should keep it closed. Or some artists (perhaps 
techno DJs) should freely distribute their work and make money off live 
gigs, while others should continue to operate within the record industry 
model.

Alternative business models must compete if the market is to sort out 
which approach works best in which industry. Keeping Napster down because 
its compliance with copyright is not 100% is absolutely unreasonable, as 
physical stores have a shoplifting rate of 1.6%, more than twice 
Napster's (self reported) 0.6%. Artists should be able to release their 
songs into public domain and use Napster for distribution, essentially 
betting that they'll make more money from live performances etc. boosted 
by digital distribution than through (scarce) record deals. Artists 
should also be free to pursue the recording industry model with non 
public-domain songs where copyright is enforced. (Also note that 
releasing music into the public domain would allow it's free 
dissemination, as well as its commercial reselling, it would not allow 
anyone else to pretend they were the song's authors under the "false 
advertising" section of trademark law). Unfortunately, the DMCA seems to 
discriminate against business models, not merely copyright, but weighing 
against services with legitimate use as distribution channels for public 
domain material. Seems that some business cannot (will not) countenance 
that content-producers might have an economic incentive to release their 
work directly into public domain.

In some ways, draconian copyright enforcement could be the best thing for 
the public domain (a perennial legal loser, with all the money on the 
wrong side of the argument). As someone who has done a lot of usability / 
customer experience work and watched hundreds of people struggle with 
computers, ease-of-use is a key driver of online success. Having mp3s 
that won't download, requiring a key for every new piece of hardware, or 
not being able to send songs along to your friends could do much to make 
business models based open information-sharing in primary markets with 
profit making in secondary markets more viable.

I've written a longer piece on how draconian licensing improves the 
ownership experience (and therefore competitiveness) of free-sharing 
business models
http://www.winterspeak.com/columns/071001.html

And here's another piece I put together arguing the importance of having 
competing business models using open and proprietary primary markets for 
information
http://www.winterspeak.com/columns/071201.html

If folks have examples of companies (or individuals) who have pursued 
this strategy successfully or unsuccessfully, it might be interesting to 
share them with the list so we can discuss in which cases open vs. closed 
business models are more competitive.

thanks,

zimran
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