I posted this response to a Mashable article on Nine Inch Nails giving away their music and now video of concert performances:
You say that “they’re paving a new way of treating their
fans and understanding how the Internet works and how it
can be used to your advantage.” How is it that they “get
it?” You don’t go far enough in explaining what you
think “to your advantage” means. Are you saying that their
concert revenues have gone up more than their record sales
revenue has gone down? Or are you saying it is to their
advantage because they enjoy being popular altruists more
than paid performers?
I had this response because I think articles like this do a major disservice to the enterprise use of the Web. I get calls from clients who are frustrated by articles like this. Imagine proposing to your boss that you should give away your intellectual property (IP) for free because it gives you the advantage of being popular? What would your boss say? Probably something like, “Thank you for your idea, but I don’t give a rodent’s behind about being popular unless it drives revenue.”
You simply have to be able to trace what you give away directly to the return. The decision to give away IP is a standard ROI analysis. This article, unfortunately, leaves out the return part of the equation. You shouldn’t.
4 responses so far ↓
1 Brian Hellauer // Jan 14, 2009 at 6:19 pm
You guys need to talk
http://blogs.gartner.com/andrew_frank/2009/01/13/rethinking-the-value-of-convenience/
2 Anthony Bradley // Jan 14, 2009 at 6:47 pm
Excellent. Andrew’s post is a much better analysis than the Mashable post. It does address results.
3 Brian Prentice // Jan 14, 2009 at 7:53 pm
Wouldn’t it be nice if every decision in business could and would be based on a crystal clear financial analysis. Unfortunately that’s not always possible. So the underlying question here is what IP are you talking about?
If you’re referring to trade secrets then I agree – don’t give that stuff away.
But if it’s copyright (say some code used to deal with a specific business process) then there may be no differentiating value in that IP. Making it freely available could positively alter the cost dynamics of maintaining this type of asset. Or it could create an amplification effect where what you get back is greater than what you gave away. Even if we’re talking about patents we’re seeing companies like IBM donating these to patent commons.
Not all IP is created equal. Broader “qualitative” frameworks for the treatment of IP are perfectly valid.
You might want to look at Larry Lessig’s work in the area of copyright
4 Anthony Bradley // Jan 14, 2009 at 11:49 pm
I agree that all IP isn’t created equal and some decisions on what IP to give away are easy if the IP has little relative value (meaning that it is either not costly to produce, provides little competitive differentiation, or its value clearly pales in comparison to what can be gained by giving it away). I am not at all averse to giving IP away. In fact, I belive it is a competitive imperative in many industries and sometimes the only way to gain market share against intrenched incumbents. However, there must be clear understanding of “to what advantage” is gained by giving it away. In the cases where the IP is nearly worthless then, sure, take some chances. But in those cases whare you are giving away clear value, there must be a well thought out reason. It may not be hard dollars, at least not in the short term, but none the less it needs to be strategic.
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