[cc-community] by-sa and exlusive edition

Terry Hancock hancock at anansispaceworks.com
Tue Sep 30 13:58:59 EDT 2008

Dr. Peter Troxler (Waag Society) wrote:
>> If they do want to have an exclusive, so as to be able to charge more,
>> they'll have to come to you for a royalty agreement, and you'll get  
>> some
>> of the income.
> Terry: can you help me to understand your reasoning here?
> -- are you saying that if something is licensed under a by-sa license  
> and given away for free then licensees have to give it away for free  
> as well and cannot develop it into a paid-for product (e.g. by adding  
> their own material, distributing it in some special format etc.)?  is  
> that paid-for product (e.g. by adding their own material, distributing  
> it in some special format etc.) what you call "an exclusive"?

No, they can sell it for the marginal cost of production. Which is a
better deal all around.

That's not a LEGAL requirement, mind you, it's the market at work: they
can _legally_ charge anything they like. But then you can undercut them
at the source, and they either must reduce their price or lose out to
your competition. So if they have sense, they will keep their prices low.

If they buy an exclusive right to make derivatives without following
suit on the license, then you can't undercut them, because you can't
legally publish _their contributions_ to your work (so their work can be
"value added" and thus, yours won't be as competitive with it). In this
case, however, you make direct income via a royalty agreement.

If, however, they use the By-SA license, then their work is just as free
for you to copy as yours was for them. Thus, you're back in the original
position: they either set their price at (well, in practice just _near_)
the marginal cost of production and find a way to succeed at that point,
or you can undercut them.

Now of course, there is a little trick here: the cost they are limited
to is essentially YOUR marginal cost of production, not necessarily
THEIR cost of production (in fact, the reality that they can optimize
their production chain and drop their costs down so as to make a profit
is precisely why they would be in the business).

An example of this kind of business model is "Cheap Bytes":


They've optimized their production chain so as to produce CDs really
cheaply, and they sell CDs with such "commoditized" content. Naturally,
they can't charge a whole lot for these CDs. But just like the web,
their product takes the distribution load off of you, and distributes
your work at no cost to you (and very little cost to the buyer). Of
course there are other such suppliers. Someone _could_ try to sell
higher in this market, but Cheap Bytes would put them out of business
unless they can justify that cost in some way (such as with really
classy packaging or convenience of purchasing, etc -- all valid ways to
add value from the buyer's point of view).

As an example of how a book writer could "undercut" a publisher
attempting to "exploit" the work: just publish it on Lulu.com. You're
entitled to use _their_ layout if you want. Your cost of production on
Lulu may be fairly high -- but you can be certain that the publisher
can't successfully charge more than that.

(And if that's too much work, then you _needed_ the publisher to do what
they do, so it's fair that they make money from doing it.)

So, if your objective was to get your work out there, then these
companies are helping you, not harming you.

If on the other hand, your real objective was to make cash from
exclusive sales, and you don't care how many people get to see your
work, then you may make more through a conventional exclusive publishing

But in that case, even using a By-NC license may hurt your sales (it
depends on the marketing details -- are you well enough known, or is
your product sufficiently enticing that people will buy it sight-unseen
and that you don't need person-to-person advertising or free
distribution networks?)

Most of the time, I get the impression that people with this kind of
need are really just looking for a license that will keep them from
being "exploited" -- by which they mean that someone else will make a
lot of money from their intellectual property and they won't see any of it.

The naive choice then, is to pick a "non-commercial" license.

But in practice, the "share-alike" license is a lot more powerful: the
work will get more widely distributed, with little effort or cost to
you, because intermediaries _can_ make money off of the distribution
process (or at least don't have to worry about breaking the license if
they do).

With _either_ license, if a company wants to appropriate the content and
keep it exclusive so as to maintain a publishing monopoly over it -- the
reason for the existence of copyright, and the only way you can continue
to successfully sell above the marginal cost of production -- they will
need to purchase an exclusive license from you. And that's when you make
your royalty agreement (or flat rate or whatever you please).

Of course, an unethical company can attempt to dupe the buyer into
_believing_ they have an exclusive when they don't. But doing so is a
license violation: the Attribution requirement insists that you tell who
created the work, and the license that it is under. ShareAlike insists
that it stays that way.

I hope that helps to explain my reasoning.


Terry Hancock (hancock at AnansiSpaceworks.com)
Anansi Spaceworks http://www.AnansiSpaceworks.com

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