A few weeks back, the always excellent Planet Money podcast played parts of a debate held at the Clinton Global Initiative between famed microfinance guru Muhammad Yunus and successful microfinance entrepreneur Vikram Akula (moderated by Planet Money host Adam Davidson), considering whether or not a for-profit microfinance effort can really work in terms of enabling better financial opportunities for the poor. Yunus argued that a for-profit effort simply cannot do good. Since it has a profit motive and outside investors, its efforts will always be on transferring money away from the poor to those investors.
Akula disagreed, strongly, by pointing out that you can align both of their interests, and his company appears to have successfully done so. In the talk, he gives an example of the fact that they only lend money to women and they charge well-below market interest rates. He also notes that, unlike most banks, they don't pay those in charge of lending the money based on how much money they lend out (or make). The idea there, is that they want the people there to figure out the right amount that the person needs, rather than creating incentives for them to try to get the person to take more, to make their own numbers look good.
Now, he argues that, compared to other banks, you could say that his firm, SKS Microfinance, is leaving money on the table, but he doesn't see it that way. The woman who takes out a small loan and successfully pays it back this time, can come back later, when the timing is appropriate and take out a larger loan, which might never have happened if she had been pushed into a bigger loan earlier, or charged much higher interest rates.
And, while no one specifically says it in the podcast, this is a much bigger point than Yunnus seems to recognize. There are two factors that Yunnus doesn't seem to consider in condemning all for-profit microfinance efforts: (1) this is a non-zero sum game and (2) this is a multi-round game (i.e., there's a long-term strategy horizon). Yunnus is right that for-profit charities probably can't work in a situation that is a zero sum game, or in which the time horizon is very short, such that there are unlikely to be repeat customers. But, just taking a straightforward game theory look at what Akula and SKS are seeing, they can increase the overall pie more efficiently in a for-profit setup. It's not "taking away" from the poor. It's expanding the overall economic pie for everyone, including investors, and part of the way that's done is by focusing on building strong relationships with those using the service. That means, the temptation to screw them over is tempered by the incentives to be fair to encourage that long-term relationship that pays off (for everyone) over the life of the relationship.
I have to admit that I was a bit disappointed in Yunus, who is so often held up as a financial genius for his microfinance theories. As the podcast makes clear, his focus involves heavy government involvement and regulation to create a special type of community-owned microfinance bank, which apparently works okay for the community he's in, in Bangladesh, but that doesn't mean that a for-profit microfinance operation can't help the poor quite a lot, while also helping investors.
I've been meaning to start to put together a series of posts that debunk the common "criticisms" we get that are all too often based on logical fallacies. I end up spending way too much time in the comments responding to people posting those same logical fallacies over and over again, and it would be nice to be able to point to posts that "answer" the complaints quickly. I'm still not sure if I'll ever really get around to it, but sometimes someone else does such a nice job of it, that I might as well highlight it with a post here.
In this case, it's the commonly claimed fallacy that all these new business models don't really matter because of two things: (1) so much money is still going to the "big players," and (2) there are only a "few" examples of these models working, so they're outliers.
One example of this kind of thinking was seen in the comments to our recent post about the developer of the game Minecraft making $100,000 per day, without any distribution or retail deals or really any outside help. Yet, one of our commenters said this was nothing, because Halo made $200 million on its first day. Of course, that's a pure apples to oranges comparison. Halo is from Microsoft, and involves a giant team, a huge budget, massive advertising and distribution deals. I would guess that if you compared the two in terms of profitability per developer, Minecraft would win by a wide, wide margin.
Anyway, it's a meaningless comparison. Setting an artificial level as determining what counts as a "success" makes no sense. What we're interested in when we're looking at new business models and new strategies is how these compare to how a similar person would have done without those models. Without the internet and the ability to distribute Minecraft the way Markus Persson is doing so, he wouldn't be making anywhere near $100,000 per day. More likely is that he'd be working for a much larger gaming company, one piece in a cog, and bringing in something closer to $100,000 for the year, and not working on projects nearly as interesting.
Another example of this occurred earlier this year, when a Billboard reporter, Anthony Bruno, attacked the concept of "CwF+RtB" by arguing that I've only "cherry picked" the success stories, and many who have tried it failed to become successful. But, that makes no sense. No one guaranteed that using a smart business model automatically makes your band a huge success. What we said is that if you do it right, it's likely you'd be more successful than otherwise -- but that still might involve only a minor improvement if under the old system you wouldn't be successful at all. And if the CwF+RtB concept doesn't matter because some artists who have used it haven't become big stars, then wouldn't that mean that the "traditional" model of big record label/sell CDs has always been a dreadful failure since so few artists become successful that way? After all, pointing to the success of Led Zeppelin or Pink Floyd or the Beatles under the old model, is certainly pointing to the cherry-picked "exceptions."
Andrew Dubber points us to a fantastic blog post by Rich Huxley, of the band Hope & Social, who ran into this sort of "criticism" after writing a blog post (similar to many we've written) reminding everyone that the big record labels are not the "music industry." In the comments, a guy named Tim London challenged that by claiming that since the big record labels still take in a ton of money (in aggregate), and many of these new business models appear to be artists making much smaller amounts, the record labels still are the industry. One sentence from his comment should give you the general summary:
I know you're wrong because the music industry as represented by the majors is still coining it and the music industry as rep'd by you is getting by, struggling, working part time or making music as a hobby.
There's that apples and oranges comparison again. Thankfully, Huxley decided to write an entire (brilliant) blog post debunking the idea that the total amount of money some record labels make is indicative of the overall value of a particular model. First, he goes through some basics to show how many musicians there are out there, and points out that money made isn't always an indicator of quality ("That Van Gogh was a penniless artists does not diminish the greatness of his work.")
But then comes the real point, explained eloquently. The critics like this highlight the huge earners in the existing industry, but ignore that the overwhelming majority of the folks who try to go the old route end up making $0. They mock the person embracing new business models for "only" making a decent living, ignoring the fact that so many who went the way they prefer were drummed out of the industry making no living at all. Here's the way Huxley explains it:
Less than 10% of signed artists recoup. Take Maximo Park for example. They have by their own admission never made a penny from record sales and make their money from DJ sets in the main. An example I have first hand knowledge of, Embrace, have sold millions of albums, they were a genuinely massive band; they performed from Glastonbury main-stage to Top Of The Pops and everywhere in-between. When they split from Virgin, they owed their label three quarters of a million pounds. I guess my point is that if we promote the Trad Music Biz's model as "The model" then the message we'd be sending is:
less than one percent of musical artists are part of the music business
only a tenth of those will recoup and make money from their record sales, and that's good
an artist should be saddled with debt, the rate at which they pay that back is equivalent to a credit card with a 900% interest rate
Basically, the problem is that those who cherry pick just the biggest artists ignore all the ones who made nothing at all from a record label deal, thanks to the fun of RIAA accounting. In other words, those artists are the true "exceptions." They're the ones who got the winning lottery ticket, but you can't ignore all those who got nothing. If you were to put all of the musicians who went the "traditional" route into a set, and all of the musicians going the "new" route into a set, and took the median, I'd guarantee that it would be higher in the new set. And that's the point. Embracing the new ways makes it much more likely that you'll make some money. It improves your chance of being able to make money making music. And that seems like a good thing, right?
As a part of that, of course, is that all of the costs have gone down with the new ways of doing things. The reason why people needed the old gatekeepers to fund stuff in the past was because there were no cheaper options. The only way to actually get this stuff done was to go through them. But these days, everything is cheaper. As Huxley notes with his band:
Hope and Social believe in and benefit from Pay What You Want. We go on about this here, but also... As musicians, we all have the ability to take advantage of the same channels that H&S have:
dramatically reduced costs of recording
a zero cost of distribution (should we choose to make mp3s available on the internet then there's no cost to us. This is miles away from the Trad model where the cost of recording and manufacture made it nigh on impossible to record and release independently)
reduced cost of promotion (CD's don't need to be sent to reviewers, press etc at the cost of a quid per CD, and half again on postage)
and by building relationships with people, they become our PRs, our evangelists (to coin another religious term, man I've got to stop doing that)
Also, there is a value in making your music available for free. If someone downloads an album of ours and shares it with a friend, copies the CD, plays it at a party, then that's how we share and have our music heard by more people. This results in:
higher gig attendances
better paid shows
more sales of our music
more sales on other merchandise and art that we, and our fans make.
Finally, I'll make one final debunking point that Huxley didn't cover: London seems to have confused absolute revenue with the change in revenue (delta). If you look at those embracing new models, it may be smaller (now), but it's growing quite quickly. If you look at the big record labels, they're declining in size. Which trend is a better bet? It's really a version of the Innovator's Dilemma where the new growth trend is ignored because it's not "as big" as the legacy business. Ignoring the deltas is dangerous.
And there we go. If you're claiming these new model success stories are the "exception," then it's only fair to admit that those who succeed under the traditional models you claim are so good were actually much bigger "exceptions." Can we now consider this argument debunked, and just link back to this post any time people bring up an argument like this?
We're always interested in creative and new business model ideas involving using infinite goods to make scarce goods more valuable. So I have to admit I'm a bit intrigued by the (slightly tongue-in-cheek) claim by Stuart Murdoch of the popular band Belle & Sebastien that he's considering opening a Belle & Sebastien taqueria in Glasgow. In an interview with Planet Money, in which he's asked about any "backup career plans" he says:
I have some ideas that I might have to act upon. One of them is to open a taqueria in Glasgow. There's no decent Mexican food in Glasgow. And I've had this idea for a while, to open a Belle & Sebastian taqueria. You're laughing, but I'm about to get serious about this. Because this could be the thing that allows me to carry on doing music -- to serve a decent taco.
And while my first reaction was to laugh as well, the more I think about it, the more curious I am about the idea of a musician also opening up a restaurant or cafe like this. Of course, the usual complainers in our comments will say that if they're doing that then they're running a restaurant, not "being musicians." But, Murdoch seems to be suggesting that this is one way in which he can continue to be a musician. In fact, I would imagine that Belle & Sebastien fans would be willing to travel a long way, and spend a fair amount, to hang out at the Belle & Sebastien taqueria, and see the band hanging out/playing there as well.
Meanwhile, in terms of stuff the band is already doing, the band has created a neat contest to go along with their latest album release:
Album copies included a unique code to be entered at a website that asks the fan to write 300 words about love. From the submissions, the band will pick a winner, and Belle and Sebastian's lead singer-songwriter Stuart Murdock will come to the winner's town to hang out for an afternoon. Even more awesome is that Murdock will write a song about the winner which will be released on a special 7" record next year!
Ah, Canada. We thought you were so reasonable last year when your Patent Appeal Board rejected Amazon's one-click patent north of the border, and said that it wasn't in favor of either software or business method patents, stating:
"since patenting business methods would involve a radical departure from the traditional patent regime, and since the patentability of such methods is a highly contentious matter, clear and unequivocal legislation is required for business methods to be patentable."
Of course, Amazon appealed, but who would go against such a reasonable argument? The Canadian courts apparently. A Federal court judge in Canada has ruled that the one-click patent should be allowed, as should business method patents. Apparently, someone hasn't been paying attention to the disaster that is business method patents south of the Canadian border. While the judge quotes liberally from patent laws around the world, he does not seem to take into account how much damage such patents do. It's a shame.
Of course, the real shame here is Amazon's decision to fight for what it knows is a ridiculous patent that should not exist. It's sad. The company has the opportunity to be a real leader in condemning bad patents, but instead seems to want to expand the concept of bad patents to other countries.
Around here, we're always on the lookout for cool and interesting ways that musicians can connect with their fans. But oftentimes, the criticism against experimenting with new business models that don't rely on "selling music" tries to assert that "not everyone can do that!" -- and that not every artist can make a living from selling T-shirts or concert tickets. But those arguments miss the point. It's obviously true that not every artist can make a living by just selling T-shirts or by playing putt-putt golf with their fans. The point is that there are an infinite number of ways for artists to sell unique offerings to their fans -- stuff that fans will want to buy because there's a connection to the artist.
Now, I'm not a Justin Bieber fan, but the news that he's designing his own line of nail polish targeted at teenage girls -- sounds like another example of an artist trying to connect with his fans (and make money by doing so). Clearly, not just any musician can sell nail polish with heart-shaped glitter suspended in it. But this nail polish line highlights the fact that musicians can endorse almost any product (no matter how silly) and expect a reasonable business model -- if the endorsement has even a hint of authenticity.
After last week's exploration of a smaller movie project, I thought it might be nice for this week's "case study" post to focus on a more "mainstream" (even if still somewhat independent) Hollywood movie maker. Hope you enjoy this week's case study...
When I first started talking about smart business models that involve the concept of CwF+RtB (Connecting with Fans + Reasons to Buy) for musicians, it involved less-well known musicians, running experiments in doing things like giving away music for free. And when that happened, we were told that this could work for small, less well-known musicians, who had to value attention over money, but that it would never work for more well-known musicians. And then, suddenly, we saw it happening with incredibly famous musicians like Trent Reznor... and critics said "well, it can work for rock stars like Reznor with a giant audience they've already built, but it's no solution for up-and-coming artists." This contradiction had me banging my head for a bit, and someone even jokingly dubbed the phenomenon Masnick's Law, defined as:
"in any conversation about musicians doing something different to achieve fame and/or fortune someone will inevitably attempt to make the argument that 'it only worked for them because they are big/small and it will never work for someone who is the opposite,' no matter how much evidence to the contrary might be readily available."
After we discussed this, someone (seriously) then claimed "well, it can work for people who are small and have nothing to lose, and it can work for rock stars who already have their millions, but it doesn't work for those in the middle." Eventually, it even reached the point that I spent time working down a list of musicians, big to small, all making use of this general concept to prove that it can work at any level.
And, while I hope that issue is settled in the music space, it's amusing to me that I keep ending up in the same discussion in other industries -- with films being a big one. One of our regular commenters, who claims to work in Hollywood, often points out that no "big" filmmakers seem to be embracing unique business models ideas, and that the only examples we have are people like Nina Paley, a wonderful filmmaker, with a devoted following, but not someone considered to be a "big" filmmaker.
However, I don't think this is true at all. There are filmmakers doing all sorts of interesting things -- including "big" filmmakers who really work hard to connect with fans in new and interesting ways. One, who we've spoken about a few times in the past, is Kevin Smith, most famous for Clerks. We've pointed out in the past how he's embraced the CwF+RtB concept (since long before we'd even thought about it) and had a very progressive view towards embracing "pirates," by noting that it was one way to create "converts."
Converts to what? Well, that keeps evolving, which is why Smith has become a really fascinating entertainer to watch when it comes to connecting with fans and giving them a reason to buy. As mentioned, he's really embraced this concept for well over a decade -- for example, with his own comic book store that sells all sorts of comic related items, including many related to Smith's movies, as well as his various books and comics that he's authored.
But what I've found most fascinating is watching how Smith's adventures in podcasting have evolved. A few years back, he started a podcast, called the SModcast, which was mainly Smith chatting every week or so with his longtime producing collaborator Scott Mosier. I started listening to these two years ago, when I needed podcasts to listen to on a cross-country drive, and haven't stopped since. They were fun (and funny) and something that he clearly enjoyed doing for the fun of it -- but which also helped him connect with fans. Last year, I paid a fair amount of cash for me and my wife to go see him do one of his famous Q&A shows in San Francisco, which, if you haven't seen them, are like 3-plus hours of pure, hilarious, standup comedy, all in answer to random questions from the audience. Since the answers often went on for half an hour or so, there weren't actually too many "questions," asked, but it was telling that most of the questions were really quite knowledgeable about all aspects of Smith's life -- with much of it coming from what he's revealed during SModcasts. I enjoyed it tremendously -- and almost certainly wouldn't have gone if I hadn't listened to SModcast (even though I've liked his movies since I saw Clerks back in '94).
I thought that this was a great example of CwF+RtB. He was connecting with infinite goods like Twitter and with the free podcasts -- all given away for free, and monetizing it with these Q&A's (scarce access) and movie deals (in part built off of his loyal following). But he keeps taking it further.
Earlier this year he did two new things: first, he started offering additional podcasts, both from himself and others. It was mainly the rotating cast of close friends of Smith, many of whom have appeared on previous SModcasts, doing their own podcasts, and putting together a Smodcast podcast network. And, I've actually become hooked on those as well -- even though I never thought I'd care what Smith's friends had to say on anything (though, ironically, on a recent episode of one of these podcasts, the Tell 'em Steve-Dave show, the hosts came out supporting John Mellencamp on his recent confused anti-internet statements, with Walt suggesting that anyone who downloads unauthorized content should have their computers destroyed on the spot). The second thing he did was he took SModcast on the road, with a series of live shows at various venues (including the Improv in Hollywood). Yes, this was basically still him sitting around, chatting with Scott Mosier about whatever he felt like chatting about... but people were paying to see them do it live.
Once again... giving away the infinite goods for free... and realizing he could sell the scarce good (seats/access). In fact, as expected, the infinite goods help make those scarce goods more valuable. The reason why people want to go see Kevin Smith literally have a random conversation with a close friend is because of all those free Smodcasts they listen to.
And now he's taken even that to another level. After the success of some of the other podcasts and the live shows, Smith set up a Smodcastle theater in Los Angeles, where he not only will regularly perform Smodcasts, but has a whole host of other podcasts being recorded as well. Hell, he'll even host weddings there for a large fee -- where he'll turn your wedding into a podcast where he'll interview the bride and groom before officiating their wedding. Seriously.
And, so far, the reviews of Smodcastle make it sound great. It's a small theater -- only 50 seats -- but Kevin's turned it into a place that sounds fun -- even to the point of letting people come watch cartoons or movies with Smith at the theater.
In the following interview from Attack of the Show, Smith and Mosier talk about Smodcast, and towards the end they hit on the "monetization" issue, making two key points. First, they didn't even try to monetize it for a couple years. The focus was very much on building up an audience. Yes, Smith had a good-sized audience of "true fans" to start with, but it still took time to really build a core podcasting audience (something that Twitter has helped with). The second, is that they recognize the value of free: noting that the infinitely available things -- such as what's on Twitter and in the podcasts themselves, should always remain free, but the scarce things, such as seats to the show and their listeners' attention (in the form of sponsorship) are where they can make money:
Now. obviously, no one's saying that the way for big Hollywood directors to make money these days is for them all to set up their own theaters. Just like no one said the way to make money in music was to copy exactly what Trent Reznor had done. But there are serious lessons to be learned from this, even if Smith himself is making much of this up as he goes along. But he's really showing how he isn't even thinking just about being a "filmmaker." Too often, we hear people in a certain profession say "but that's how I make my living... from my music/movies/art/etc." Smith realized long ago that it goes beyond that. He's an entertainer, and he knows quite well (whether on purpose or not) how to mix "free" into a structure where he's really transparent, authentic, available... and offers up all sorts of incredibly valuable scarcities for people to buy.
Oh, and in a bit of colliding worlds, Smith is going to have a "Starfucking" podcast that will include friend of the blog, Amanda Palmer, along with her fiancé, Neil Gaiman -- though, I imagine they (unfortunately for me, but fortunately for most other people) won't spend much time talking entertainment industry business models.
About a year ago, we highlighted how the online MMO based on Dungeons and Dragons had gone free after trying to charge for a while, and showed how going free didn't mean you lost money, but it could work well as a part of a business model. And, indeed, reports from earlier this year showed that revenue had increased 500% for the "free" game -- once again highlighting how "free" does not mean "no money." In fact, the success of this free effort was so well received that Turbine's owners agreed to let them open up the Lord of the Rings MMO as well.
And, as a whole bunch of you have been submitting, once again, it looks like, by going free, they've been able to make a lot more money. In just a few months, they've doubled their revenue by embracing free. The game is now free to play, and so a lot more people are playing -- and many of them are choosing to then pay for certain additional offerings within the game. Once again, the point is the same, if you recognize where and how free fits into your business model, you can make a lot more money. No one is saying that everything is free or that anyone should stop making money. It's all about understanding the economics of how to use free to create a more efficient market to make more money.
Kiss' Gene Simmons apparently was bored of not getting enough coverage in the blogworld lately, and so he's cooked up another "controversy." He does this every year or so, making a big stink about "piracy" or new business models, and I'm pretty sure at this point that he only says this stuff because he knows people will write about it. In 2008 he claimed that Radiohead was destroying the music industry with its "pay what you want" experiment -- even though it made the band more money than all their previous releases. In 2007, he told Billboard Magazine that the labels should be suing more people:
The record industry doesn't have a f*cking clue how to make money. It's only their fault for letting foxes get into the henhouse and then wondering why there's no eggs or chickens. Every little college kid, every freshly-scrubbed little kid's face should have been sued off the face of the earth. They should have taken their houses and cars and nipped it right there in the beginning. Those kids are putting 100,000 to a million people out of work."
Of course, the evidence suggests Simmons is totally wrong, but apparently he hasn't learned anything in the past three years or he doesn't care. Kiss keeps selling concert tickets at an amazing clip, so he can say whatever ridiculous thing he wants and he still makes more money. So he's basically repeated those claims from 2007 (found via Hypebot), by saying that fans should be sued until they lose their homes:
"It is a business. You have a fiduciary duty to your own butt to make sure you maximise any potential and minimise any exposure,"
He's right about that, but perhaps confused about long-term vs. short-term maximization. You can maximize revenue in the short term at the expense of long-term revenue, and one good way to do that is to smack around your fans. But that didn't stop Simmons:
Make sure your brand is protected, be litigious, sue anybody -- take their homes, their cars, DON'T LET ANYBODY CROSS THAT LINE.
These are his fans he's talking about. While he's got fans to spare, he may discover one day that suggesting bands sue their fans isn't actually a good long-term strategy.
"The music industry was asleep at the wheel and didn't have the balls to go and sue every fresh-faced, freckle-faced college kid who downloaded a clip," Simmons roared, "so now we're left with hundreds of people without jobs. I have a record company."
Not quite sure where that final non-sequitur came from (sounds sort of like "I'm on a horse.") Either way, he's confusing the record industry with the music industry. The recording industry did, in fact, try to sue every college kid who downloaded stuff. And it ended up costing them a ton of money, educating many more people about file sharing, and driving people and systems further underground. And, while all that was happening the music industry (not the recording industry) continued to grow at a pretty massive rate, despite his claims. I'm on a horse.
He illustrated these already-colourful points with a handful of stories: one about a captain who's told he has a small hole in his ship (will he cork it now, or sink before arrival to the New World?), and another about a farmer who lets a cute fox run away with an egg. The fox tells all the other foxes, who come to ravage and steal and kill all the chickens, after which point the farmer's wife divorces her witless husband and the children all hate him.
Um. Okay. Story time from Gene Simmons. I can tell stories too, except mine are actually about real people who figured out that attacking or suing your fans was a bad idea, and actually putting in place smarter business models made sense.
But here's the reason why I think Simmons is making all this up for the attention and the press. He notes that he has a record company, and he screams about the industry not having the balls to sue people. So... um... Gene... where are your thousands of lawsuits against file sharers? After all, I would imagine that KISS songs are downloaded all the time. What's with all the talk and no action? Where are all the lawsuits that drove kids out of their homes and cars? Oh right. They didn't happen.
And, in the meantime, as mentioned, Simmons is making a ton of money selling concert tickets. The article notes $400 million in concert tickets sold in the last 8 years, and that's only a tiny fraction of the KISS business behemoth, which sells all sorts of scarcities that people want to buy. In other words, Simmons (who wastes no opportunity to talk about what a brilliant business man he is) has actually figured out how to thrive in a world where free copying is rampant, by selling stuff that can't be copied for free. He should be one of the poster children for showing how you build a business that "competes with free." It's just sad that he either doesn't realize why his business worked, or he wants to mislead everyone about it.
Anyway, you can watch the video below of this talk. The whole talk is about 40 min but I've queued up to the parts quoted here:
I had another story planned for our new "case studies" series (see last week's if you missed it), but with the release of Sintel late last week, it jumped the queue, and I put together this quick case study
For years, one of the points we've raised in answering the movie industry's $200 million challenge to us (i.e., "how do you keep making $200 million movies?") is that, in part, it's asking the wrong question. No one asks "how do we keep making $10,000 computers?" Instead, they look for ways to make them cheaper (and better, at the same time). But in the world of Hollywood accounting, there's little incentive to make cheaper movies (sometimes the incentive goes the other way). And, we keep showing how the world is reaching a place where it's cheaper and cheaper to make good movies. We've pointed out nice examples of people making high quality movies for next to nothing. The idea is not that movies should be made for nothing, but that the technology is making it so that movies can be made for less. In fact, with two of the examples of cheap movie making we've highlighted, the makers later went on to score deals to do higher end movies for more reasonable budgets.
There are so many important points to make here that relate to stuff we talk about:
The technology keeps getting better and the cost to do such high quality work keeps decreasing. This movie did cost $550,000 to make -- involving a 14-person team. But, that's a hell of a lot less than it would have cost not so long ago for anything of this level of quality.
The creators used some crowdfunding: They offered up a bunch of reasons to buy as a way to get people to preorder and pay up front. Note that they didn't just say "please give us money," but provided a bunch of benefits for doing so.
The release is totally open source: They're using a Creative Commons license that only requires attribution. That is, they have no problem with commercial uses.
The movie itself is also promoting something else: The movie comes from the Blender Foundation, and helps promote their open source 3D content creation suite, which is helpful for their business. This is a point that we've tried to make many times in the past. All content advertises something, and it's often important to figure out what that is. In this case, Sintel helps "advertise" Blender's tools. It's yet another example of content as advertising, and doing so in a way that's not intrusive or seen as "product placement." If you have content, it's important to realize what that content is advertising.
Definitely a cool example of a variety of neat ideas all wrapped up into one... and producing a great movie as well.
We've been writing a few stories about Minecraft lately, kicking off with a discussion about how developer Markus Persson doesn't worry about "piracy," because he feels it's better to focus on giving people a reason to buy than caring about what others are doing. More recently, there was a big discussion around the simple coolness of a guy in Minecraft building a working computer within the game itself. Both were neat stories.
Now Jay sends in some news that continues to build on the legend of Minecraft, pointing to a story claiming that Persson is making $350,000 per day (see the update below). With alpha software, and without going after "pirates" who are supposedly destroying the industry. Yeah. Apparently, he's selling a copy every 3 seconds. And he's done all this with no distribution. No retail deals. Just creating a really good game, getting people interested in it, not treating them like criminals, and giving them a reason to buy.
Whatever happened to "pirates" killing the gaming market, huh?
Update: There's some discussion in the comments about this, and I hadn't realized that Persson posts sales stats publicly. From that, it looks like the $350k per day claim was a bit exaggerated -- though, there was one such day. It looks like a more typical day is closer to $100,000. Still seems like a pretty damn good success story.
