Internet and IP

To an engineer at a Russian university.

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It's a good effort and path- your focus on the topic is evident, but one that many very smart folks have been down previously, and I don't see anything new here. There is a myth with the perception that getting quality work exposed will be rewarded. In fact evidence suggests just the opposite. And another myth is that advertising will somehow pay everyone's cost to produce all IP.

The challenges in practice are always the same with financial modeling- the entrepreneurs are publishers, and their market is limited for selling content with constant downward pressures on demand in part due to the Internet and piracy, which only serves to make those with a culture of controlling distribution that much more paranoid, and reduces the incentive for creators -- alas they have bills to pay as well in a world with shrinking resources.

The fundamental mathematical challenge is with the scale ratio on selling or licensing IP- in attempting to provide information or knowledge at a low enough price for the user that is very expensive and/or time consuming(energy) to develop. Of course the products that have very broad use like desktop software can be produced with enormous resources (and risk), and the cost can be recovered at lower prices provided it's adopted universally, if the users can afford even the cost (not considering profit here), which let's say is divided by 100 million users (digital gaming is perhaps a better example today). Tactics and other issues aside, that's why the Microsofts and Wal-Marts of the world rule their industries- it's the math. They were able to reach critical mass in scale in a large market- U.S., and then apply it globally (to varying degrees of success).

Print publishing is far less efficient, although scale is still an enormous issue with only the best sellers paying for everything else- almost all books are subsidized by publishers with many/most self publishers losing money. How many middle aged and reasonably intelligent consultants does the world need? Publish or perish is from the academy, not capitalism. It only works for the very few at the top of the charts in the rest of the world lacking that monthly paycheck.

Digital distribution on the other hand is very efficient and relatively inexpensive, but it's also hyper competitive at a level never before experienced because the cost of entry is so low. Good news for consumers and learners- if they can translate that knowledge to something meaningful in their life (ignorance is bliss?), but bad news for publishers and creators of IP, or potentially even universities, placing downward pressure on quality through financial disincentives in an extremely overbuilt market like the world has never known. So we have an ever increasing number of more knowledgeable people, but an ever decreasing size of pie, and very modest real economic growth, particularly when viewed through the sustainability
lens.

The question becomes more interesting when dealing with specialty IP, particularly B2B, where very few users globally are in a position to benefit from the knowledge- each industry cluster for example. In that regard the Internet has made it much more efficient for thought leaders to connect with customers directly, so there isn't nearly as much need for the middle man/entrepreneur/publisher.

The problem with the Internet is that it hasn't produced more buyers of IP, but rather fewer. It has raised awareness levels and provided the best opportunity in history for self learners to learn at their own pace, and to share digitized information. It is serving to move the buyers around a bit geographically in the "flattening" affect.

So we have this constant internal conflict between our desire to spread knowledge throughout the world, which most of us intuitively feel strongly is better for the greater good, and our need to create sustainable economic models that incentivize innovation, positive change, and fundamental human evolution.

The challenges we face in the intellectual property world are very much influenced by the physical world- exploding populations in relation to finite resources for example. I like to think that in some way that the "open source" of knowledge will help to increase awareness where it is needed most, but to date not much evidence of it. I do believe sustainable markets for IP will evolve that remove the strong disincentives that exist today on the Internet for digitized IP. And I don't expect the quality of digitized IP to increase substantially until they do.

.02 - Mark Montgomery