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White Paper - User Guide - Administrator Guide

 

 

Freesound Music Sound Count Facility

Last Update: 08/15/07 05:02:00

 

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1            Introduction

1.1       Who should read this document?

This document provides information about the Royalty Inheritance Program (RIP) as implemented in the „Freesound Music“ website (www.cm-gallery.com). The document is split into three chapters:

1. RIP - Royalty Inheritance Program

This chapter provides an introduction into the RIP concept (a kind of a „White Paper“). It is intended for any audience interested in digital rights management.

For users of the „Freesound Music“ site, this chapter provides the required background to understand practical procedures of the „Freesound Music“ Sound, Report, and Form pages as described in the user guide.

2. RIP - User Guide

The user guide is intended for any user of the „Freesound Music“ site that is interested

¨       to get in contact with the original creators of the sounds he uses, and

¨       to get statistic information about his own musical projects and the complete site.

The user guide will also inform about

¨       how to comfortably apply the Creative Common license obligations related to distribution, and

¨       how to manage commercial use of the site’s or his/her own musical projects that he/she derivates from this site.

3. RIP - Administrator Guide

The Administration Guide describes the operations needed to assure the proper performance and execution of statistic information provision and commercial procedures of the RIP program that are used within the „Freesound Music“ site framework.

User Guide and Administrator Guide can also be read as a suggestion, how shared commercial right management can practically be implemented.

1.2       Direct Support

Any technical questions with regard to the documented operations can be addressed to flex@cm-gallery.com (administrator’s email address).

Any conceptual questions can directly be addressed to freed@cm-gallery.com.

Please note that the project is currently implemented as a prototype only. Any figures and names shown in the below examples are completely fictional.

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1            Royalty Inheritance Program

1.1       What is the „Royalty Inheritance Program“ about?

The question how to deal with content authorization in a world wide web environment is not trivial. One of the reasons is that more and more parties are involved in a content creation process where one work builds upon the other. Moreover, this is used to happen in a very dynamic way.

The Creative Commons organization, located in California (http://creativecommons.org/) , US, developed a legal model which suites such dynamic environments and wins more and more acceptance and popularity throughout the web community. The model allows to split or to derivate author rights within the extreme gap of complete restrictions of the traditional copyright and the complete freedom of content available in the public domain.

One of the differentiations that this model allows is to grant or discard the right to the licensee to make commercial use of the content. Interestingly, this produces again an extreme situation of obtaining all or none of commercial rights for the used content.

The model of the „Royalty Inheritance Program“ which is explained in the following sections suggests to close this commercial gap with royalties for parties that contributed to the work but are not directly involved in the sales cycle. The big difference to traditional royalty concepts is the ability of royalty inheritance that applies throughout a complete creative chain of multiple parties. This way, it can provide the possibility for a fair share of economic results applying to all parties that are involved in a web-based content creation.

In its current implementation, the „Royalty Inheritance Program“ is functioning as a waiver to the non-commercial Creative Commons license that applies to this site and any subordinated site that would use its services. It can be summarized as follows:

1. Basically, the presented content is free for everyone (according to the specific Creative Common license applying to this site).

2. If someone succeeds to make commercial use of it, other parties that contributed to the work should benefit from the fruits with some reasonable ratio (the RIP-royalty) as well.

3. Commercial use of the content is, however, strongly encouraged: The royalty is measured by success - no sale, no royalty applies. This reduces the seller’s risk significantly.

For more information about the Creative Commons organization and its licenses visit the Creative Commons website.

To read the “Waiver for Commercial Use” click here.

1.2       Web-based provision of content

A standard scenario of web-based content provision is shown in Figure 1. The creator of the original work (COW) uploads his work to a website and agrees that the website presents his content to the terms of a Creative Commons license. The work presented does not has to be necessarily complete. Another creative party - called a value added creator (VAC) - may build upon the work of the COW and offer the result to end users, by agreeing to the terms of the same CC license.

For the sake of our help project, we will use „The Freesound Project“ (http://www.freesound.org) as example for the website’s services, fed with sounds by hundreds if not thousands of creative sound producers. The VAC may be a musician that uses some of the sounds within a larger musical project and offers his result to the public. Again, the sounds presented by „The Freesound Project“ are basically „material“ content and not primary intended to be consumable for end users.

Figure 1 - Standard content provision

1.3       Value Added Creators and Distributors

A primary website may add substantial value to the original work as well. Using „The Freesound Project“ someone can visualize sounds, play them in various modes, communicate with other Freesounders (COWs), or search for sounds very effectively, since additional content like tags and verbal descriptions has been applied to it. Those added values may be suitable to enable further creative parties to build upon it and to add further value. Therefore, „The Freesound Project“ can be considered as a VAC as well.

This is different in case of a distributor (see Figure 2). The distributor does basically not add value to the content itself but uses infrastructure in order to distribute the content as is, in an efficient, consolidated, and broad manner. In our example, he might promote the composition of the musician that used Freesounds to a much larger public.

A distributor may still add value to the content like applying descriptions, graphics, etc., to the content. However, as long as this additional content functions only as a promotion for the offered content itself and does not produce a new use case, a distributor can not be considered to be a VAC. The same is also valid for the transfer of the content to another media as is.

Needless to say that the Creative Commons license applies to the distributor as to any other party that makes use of the content provided by the original site (the original VAC).

Figure 2 - Distributor added to the equation

1.4       Chain of VAC sites and different licenses

The „Freesound Music“ site functions as a VAC which builds upon the former VAC „The Freesound Project“ (see Figure 3). It adds value through the ability to utilize the sounds provided by „The Freesound Project“ explicitly for musical creations, while other Freesounds can still be used for completely other purposes. Making Freesounds available for musical creations, the „Freesound Music“ site wraps a significant enhanced player around the sounds which enables the user to play with them or arrange them in a way that wasn’t possible before.

Since the „Freesound Music“ site focuses both on tools and on final results, end users may be able to directly obtain and enjoy the content of this site. In addition, distributors can directly use the final content while extending the reach of the site’s results.

Figure 3 - Chain of VAC sites

Although the second VAC complies to all obligations issued by the Creative Commons license of the first site, it does not need to apply the same license terms to the value added work it provides. In case of the „Freesound Music“ site, commercial use of the provided content is not allowed unlike within „The Freesound Project“ license terms. If, for example, a user would like to commercialize a certain sound provided by the „Freesound Music“ site to free conditions, he would need to obtain this sound directly through the original „The Freesound Project“ site.

Figure 4 - Various licenses applying in a VAC chain

1.5       Commercial sharing

A VAC or distributor within „The Freesound Project“ framework will be able to enjoy 100 % from his earnings of the common work, while other parties which contributed to the work will not be able to benefit from it at all.

In an alternate scenario represented by the „Freesound Music“ site as “Waiver for commercial use” (see Figure 5), 85 % of the earnings of the common work will still apply to the seller of the work. 10 %, however, are now shared with the VAC that provided the sold content as is (the “VAC royalty”), and 5 % are shared with the creators of the original work (the “COW royalty”).

Figure 5 - Commercial sharing by a VAC

This idea looks simple but requires some e-commerce technology behind the scene since the creators of the original work contribute in different proportions to each of the work, and different works might be sold over a certain period of time. Therefore a VAC which offers commercial sharing of web created content according to this model must be able to provide at least the following capabilities:

1. Measuring the use of the content per contributor and per user of the content (which can be done anonymously)

2. Obtaining the royalties from the selling parties of the content per income ratio

3. Distributing 5 % royalty per recognized use of the content to the community of the COWs

For more information on how those requirements can be executed in detail refer to chapter 3, „User Guide“.

1.6       Royalty inheritance

Lets assume that „The Freesound Project“ grants the same license as the „Freesound Music“ site (see Figure 6). In this case, the „Freesound Music“ VAC must transfer 10 % of his income to his VAC provider which is „The Freesound Project“. In our example, 1 % of the 10 % VAC royalty that has been received from the distributor will need to be transferred then to the „The Freesound Project“ VAC.

It is easy to imagine that a VAC with a quite strong infrastructure may be able to win a lot of sub-ordinate VACs that specialize in various applications and products. Therefore, indirect VAC royalties can still sum up to a quite significant figure.

Figure 6 - Two-level chain of commercial sharing

The creator of the original work will always receive his royalties through the VAC which is the last in the chain before any distribution business (see Figure 7). The VAC that presents the actual sold work is responsible for handling this COW royalty on behalf of the distributor. If a party invests in both value added work and the selling infrastructure, he is allowed to keep the VAC royalty as compensation for his own efforts except the 10 % from it that would be due to his preceding VACs.

Figure 7 - Three-level chain of commercial sharing

As part of the Creative Commons license in conjunction with the “Waiver for commercial use” any subsequent party needs to inherit the license as provided („share alike“).

For more information about the actual Creative Commons license and the “share alike” condition that applies to the demonstrated VAC sites click here.

1.7       Value added creation on hook

If the infrastructure of a VAC allows, he can grant individual persons the right to behave as a sub-ordinate VAC (Sub-VAC) and handle the commercial transactions on behalf of him.

Example

The „Freesound Music“ site allows musicians effectively to assemble musical pieces. A musician that makes extensive use of it and creates a private collection of compositions based on the „Freesound Music“ site resources can be treated as a Sub-VAC. A distributor would market and sell his collection. The „Freesound Music“ VAC will then receive the VAC royalty from the distributor and transfer 90 % from it (9 % of the total earnings) to the Sub-VAC. 10 % (1 % of the total) will remain as the sub-sequent VAC-fee that is the due of the Sub-VAC.

The idea behind the Sub-VAC is simple: The value added work of the Sub-VAC increases the popularity of the original VAC that provides the infrastructure and deserves a promotion accordingly.

Figure 8 - Sub-VAC promoted by a VAC site

Any VAC that wants to offer some kind of Sub-VAC promotion needs to own at least the following pieces of infrastructure:

1. Sub-VAC registration and establishment of a payment channel

2. Adding a Sub-VAC ID mechanism that allows to track projects by Sub-VAC as reported by the distributors or any other selling party

For more information on how those requirements are executed in detail refer to chapter 3, „User Guide“, section 3.5.8, “VAC Subcontractor”, and to chapter 4, “Administrator Guide”, section 4.5, “Managing VAC Subcontractors”.

1.8       Content related licenses and value added licenses

Content related licenses and value added licenses can be different (see Figure 9). A VAC may inherit content related rights from the COWs as they are and pass them to distributors and to subsequent VACs that build directly on the content delivered, but not upon the added value of the VAC. For those added values another set of Creative Common terms may apply at the same time.

This is, however, not valid in case of a “share alike” license. As long as a “share alike” licensed content is presented within a value added framework, the terms of license inheritance applies also for extended offers and the extended offers shall not contradict the terms of the shared license.

In terms of our example, this means, wherever a commercial sharing is required in conjunction with a “share alike” license, a subsequent VAC cannot offer his work that builds upon the former VAC’s work for completely free commercial use.

Figure 9 - License split and “share alike”

1.9       Summary

The „Royalty Inheritance Program“ (RIP) is initiated to promote creative common work and not to hinder it. Wherever this intent is not sufficiently represented by results, or other legal conditions need to be considered, the current rules will be subject to revision.

As an early pilot of this kind, any further input is highly valuable and welcome. Please send your comments to freed@cm-gallery.com.

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