Encouraging linkages between the creative industries and the wider economy to spur innovation

‘Do the creative industries support innovation in the wider economy?’ Again an interesting question NESTA asks itself, in this research conducted in cooperation with Experian and Oxford Brooks University. Much of the hurray atmosphere created around the creative industries is based on the growth the sector has shown as a part of larger national economies. And on the implication of innovation spurred by the creative industries. Indeed, ‘creativity’ and ‘innovation’ are often considered meaning the same thing. The Nesta research focuses on linkages between the creative industries and other industries and finds that these linkages do in fact seem to benefit innovation.

First a note on ‘creativity’ and ‘innovation’; this report defines them neatly: “creativity is about the origination of new ideas –either new ways of looking at existing problems, or of seeing new opportunities-, while innovation is about the successful exploration of new ideas”. The creative industries can be seen as a pioneer sector of the economy, fostering an attitude towards creativity and innovation from which the rest of the economy can benefit. How effective this benefit is depends on whether ‘effective transmission effects are in place (Andari et al., 2007). For this we have to look beyond the common assumption that the creative industries are an avant garde of innovation-intensive high growth information services (Handke, 2006).

We’ll skip the part here about the extensive number crunching NESTA did, suffice to say they focus on the contacts between the creative and other industries, by measuring the UK input–output data (purchases of creative products and sales to creative industries). The main conclusion of the report is that linkages with the creative industries do indeed seem to support innovation. The implications of this being that policymakers should widen their focus, by not only supporting the creative industries for their own sake. Policy should encourage and embed linkages between the creative industries and the wider economy.

The full report ‘Creating Innovation Do the creative industries support innovation in the wider economy?’ can be downloaded here.

over the weekend the american industrial rock band band Nine Inch Nails released their new album titled ‘Ghosts I-IV‘ via their own website. With this release the Nine Inch Nails - lead by their outspoken frontman Trent Reznor - join a number of artists (Radiohead, Madonna, …) who, after being freed from long running contracts with mayor record labels, start experimenting with new ways of distributing their music.

Information about the success of Radiohead’s experiment is hard to come by as the band stays mute. Outsiders have suggested that only a limited percentage of the downloaders have actually paid for the download of ‘In rainbows’ but the resulting hype helped the album to enter the British album charts at number one when it was released via traditional channels (Madonna of course does not count as she entered into a 120 million 360 deal with an events marketing firm and still has to release an album after the end of her mayor label affiliation).

The approach chosen by the Nine Inch Nails is different: Rather than letting the downloaders decide on the price point they offer 5 distinctive price points: free (for one fourth of the album), $5, $10, $75 and $300. According to Ars Technica:

With Ghosts, Reznor had some obvious advantages. NiN is a better-known brand with a devoted following, and Reznor’s strategy of using multiple price points made his music easily accessible to fans. Those who wished to pay nothing could download a free version of Ghosts I. For $5, a digital version of all four albums was available, and for only $10, fans could get all the music on CD along with an immediate digital download. $75 and $300 deluxe versions were also made available and include things like a Blu-ray disc, a DVD of the multitrack audio files from the project, videos, deluxe packaging, and more. […]

In covering the story, the New York Times noted that “one option Mr. Reznor is not offering fans is a way to obtain the entire collection free,” but Ghosts I-IV is licensed under a Creative Commons Attribution Non-Commercial Share Alike license that does allow noncommercial redistribution.

This last observation is extremely interesting. Offering the work under a CC license not only allows anyone to remix the the album (interesting to see if this opportunity will be widely used) but also allows anybody to redistribute the entire album as long as this happens without the intention to make a profit. As a result both the freely available Ghosts I (as torrentfreak.com notes, uploaded by the Nine Ince Nails themselves) and the entire Ghosts I-IV suite are legally available from both closed and open bittorrent trackers (at the time of writing the pirate bay tracked more than 3000 seeders and 1000 downloaders of Ghosts I-IV).

Now it seems that regardless of this widespread free availability of the entire album Reznors gamble is paying off. As Creative Commons’ Mike Linksvayer points out the Nine Inch Nails already made $750.000 by selling all 2500 copies of the $300 ultra deluxe edition:

The $300 ‘ultra deluxe edition’ of Nine Inch Nails‘ Ghosts I-IV, limited to 2500 copies, sold out in a couple days (I believe released Sunday, no longer available this morning). There are some manufacturing costs, but they don’t appear to be using any precious materials. So if an artist typically makes $1.60 on a $15.99 CD sale, profit from sales of the limited edition already matches profit from a CD selling hundreds of thousands of copies.

Then there are non-limited sales of a $75 merely ‘deluxe edition’, $10 CD, and $5 download, and whatever other products NIN comes up with around Ghosts.

The most interesting aspect of this approach is that it takes into account that in the current situation of abundance (basically all music is available for free at our fingertips) paying for music is a more or less voluntary act: Offering wildly varying price points seems to play well with the enormous differences in individual spending power of music fans and as a result ridiculously overpriced collectors editions might indeed be a way to compensate for the income lost to a much bigger group of fans who prefer to spend their money on other things than digital music files.

Of course this business model is not really new: In the airline business a relative minority of rich individuals and corporate passengers in the front of the plane subsidizes the travel of the economy class passengers in the back and in his 1875 Critique of the Gotha Program Karl Marx identified this particular ‘business model’ as one of the key characteristics of a developed communist society (’From each according to his ability, to each according to his need‘).

over the past two days i have been attending an workshop on the ‘The Socio-Economic Impact of Social Computing: validation and policy options’ organized by the Institute for Prospective Technology Studies (IPTS) in Sevilla, Spain. The IPTS is one of the 7 research institutes of the Joint research directorate of the European Commission and researches issues related to technological innovation. Starting this summer Kennisland will collaborate with the IPTS in a new project that will investigate the opportunities for the integration of immigrants and ethnic minorities in Europe provided by ICT and social computing (more about that when the project starts).

This week’s workshop was intended to gather feedback from external Experts on the research the IPTS has been doing on the impacts of Social Computing (social computing is EU speak for web 2.0). The workshop did not disappoint and brought a number of interesting discussions to the forefront: From fundamental questions about research methodology, to the issue of sustainability of communities and services and the question if there is indeed a need for european (or national) policy interventions in this dynamic field.

One of the most fundamental questions raised during the workshop was the question of data quality.Much of the available data regarding the use (and users) of social computing applications and communities is supplied either by commercial consulting companies, the companies running social computing services themselves or individual bloggers.

There is almost no data that is gathered through empirical studies of users (and user behavior). This poses important questions regarding the validity of the data (can it be trusted) and regarding the responsibility of research institutions working with this data. It was suggested that the fact that the IPTS research reports on social computing readily cite data from such sources these reports increases the relevance of such data (future references to the cited data points will include some kind of endorsement from an ‘independent’ research center) which is highly problematic as long as the validity cannot be assessed.

On the other hand ignoring the publicly available data does not seem to be an option either as it is often the only available data regarding the social practices under study and as a result of this, ignoring it would mean leaving the discourse to those parties that produce such data.

With regards to this, there seemed to be a consensus among the participants that there is an urgent need to develop acceptable minimum standards for working with (commercially provided) usage data. In the meanwhile it seems to be important to clearly point out the origin of such data sources.

When it comes to actual social computing practices under study the most interesting question addressed the sustainability of current structures and communities: There is serious doubt that the current business models (or organization structures) of social computing will be sustainable in the long run.

Communities like wikipedia face important challenges is raising and allocating increasing amounts of financial resources and combining this with the non-commercial ethics and motivations of contributors. On the other side there is skepticism if social networking applications (such as facebook, myspace or hyves) and user generated content platforms (such as youtube) will be able to operate based on advertising revenue alone (especially against a trend of slowing growth that is being observed since the second half of 2007).

Finally some participants also expressed concerns that presence of free services (like wikipedia) that effectively take certain economic activities (selling encyclopedias) out of the realm of the market (and into the commons) is indeed beneficial when seen from the perspective of the the i2010 objectives of the European Union as they do not contribute to measurable (in terms of GDP) economic activity.

It seems that a better understanding of the economics of ‘free’ is essential for us to understand the social and economic impacts of social computing. Given this is might be beneficial to have alook at two recent artciles (blog posts) that attempt to uncover the underlying business models:

‘‘Free! Why $0.00 Is the Future of Business‘ by Chris Anderson (Editor in chief of Wired and author of ‘The Long Tail’) and ‘Better Than Free‘ by Kevin Kelly. Kelly and Anderson both come up with lists of reasons for people to pay for certain goods and services even though they are also available for free (Kelly) and of mechanisms that enable service and goods providers to offer things for free and still realize income.

A great example of such a ’semi free’ service can currently be enjoyed by the inhabitants (and visitors) of Sevilla: Free bicycles. The municipality of Sevilla operates a free (for the first 30 minutes) rental scheme for bicyles that enables any registered user to pick up bicycles at one of the 100 (or so) rental stations and drop it of at another one:

Sevici is modeled after the highly successful Velib service in Paris (and being operated by the same advertising company). The service can be offered free (or almost free as there is a one-time registration fee) because in exchange for operating the service the city of Sevilla has authorizes the service providers to put up billboard advertisements in a number of places within the city. This deal not only provides free bike rides to the citizens of Sevilla, but also offsets the intrusive presence of advertisements is the cities public spaces with an direct increase of quality of life (ubiquitous free bicycles). At least in this case there is very little discussion about the sustainability of the service…

cc-by-nc-sa picture by Eloy Sancho

A lot of personalisation in this presentation I gave at the Knowledge Society Forum - Telecities conference in The Hague. Web 2.0 is presented as a model for collaboration and exchange of value. Furthermore, Civil Sociey Media organisations and projects deliver the tools to the public to create and remix content online and participate in the public debate. The power of the user comes forward in MyDemocracy projects. You can view and/or download the presentation at Slideshare:

As China’s economy is growing rapidly, cultural exchange between the western world and China is flourishing. However, one of the largest barriers is language. New media technology provides us with creative solutions. Chinese Radio Amsterdam (CRA) presents an overview of state-of-the-art media and technology to bridge the language barrier (e-mail, mobile, podcast, game, wiki).

Chairman Hong Tong Wu starts the session with showing the new Chinese Radio website and name; Chinese Radio and Television (CRTV). He shows a snippet of a Miss Asia contest, his personal favorite ;-). CRTV offers language lessons, video’s and an hour of radio every week.

ChinesePod
The second speaker is Hank Horkoff of Praxis Language. He broke the language barrier when he moved to China.
Continue reading ‘Crossing the Chinese Language Bridge’

Pablos is a hacker and a futurologist. He work at . He wears a black shirt, has medium long hair and talks quick and entertaining. He starts of with pointing out where some real innovation gaps are. He tried on almost all head mounted displays and they generally suck. Hackers are the frontrunners of innovation, always looking for new ways to hack the world. The world is their playground and they show how vulnerable we’re actually are. Pablo gives some very entertaining examples.
Continue reading ‘Pablo the Hacker @ Picnic07′

Professor Sugata MItra put up a computer-screen in a hole in a wall in some Indian villages. He attached the keyboard and touchscreen next to it and just let it be. Hundreds of childers would come and started to interact with the computer, even when they didn’t know any english. They learned parts of it and lot’s of other things during the way. From 1999 to 2004 he repeated the experiment all over India. He shows some beautiful movies showing Indian children interacting with a computer for the first time. The most important conclusion is that his experiments show that children can selfinstruct themselves in learning to use a computer, irrespective of who or where they are.

Some other findings:
- Computers and the internet must be provided to them in safe, public space, that they associate with play. If you put
- Between 200 to 300 children can share one computer effectiviley to become computer literate in 3 months
- The setup costs 3 US cents per day to use. 30 dollar in three years would
- Some design Playground computers has been designed with some typical things: the computer stand is put low in the wall with low benches in front of it (so that adults have a hard time using it), a lot a fans stand on the computer to cool it from the outside, it has a 6-8 hours of powerbackup

Mitra ends with a great quote: If we can’t help them, give them the means to help themselves.

David Weinberger: ‘Everything is miscellanous’
In a nice and warm Extraction Room West which fills up during the morning, Weinberger kicks off the PICNIC Thursday. David Weinberger talks about the topic of his book ‘Everything is Miscelleneous: organisation and order in the digital age. In the physical world we can organize as much as we want and we do it all the day, even when putting forks next to forks in the kitchen. In the end we always up with a huge pile of miscellenaous stuff. In real life we can only store things in one place, one box. In the digital world new rules apply. We can store, slice, join digital things in unlimited ways.

Weinberger distuingishes three ways of order

1. Order of things its itself
2. Order of metadata of things on fysical object (library cards)
3. Order of digital metadata

Our world is changing where the third order is getting more important. There are four principles of changes between the fysical and digital world.
1. You can hang a leaf on many branches.
2. Messiness as a virtue. The more links you have, the better.
3. No difference and data and metadata
4. Unowned owner. Many users can reuse digital information in their own ways, save it, order it and share their lists with other people.

Weinberger states a couple of implications of these changes:
- The world can be shown as complex as it is. Bloggers elaborate on presidential speeches and turn a 2000 word speech into 2000 blogposts with as much dimensions.
- Implicit knowledge can be made explicit by creating relationships between people and even information. This is one the drivers of social networks.
- Social knowing instead of expert knowing. There are still experts but they store their knowledge in networks such in mailinglists. The mailinglists contain more information that the expert has to offer because it combines the knowledge of a lot of people. The web act in this respect as an enabler of conversations. Take Wikipedia. Wikipedia is an example of social knowing. Wikipedia is willing to state their uncertainty about articles, if it’s neutral or not, if there are articles which contradict, if there is a lot discussion about the article. This makes Wikipedia in the end more thrustworthy than newspapers, which only present the meaning of one journalist and the editors.
- Externalization of meaning. We externalize information and meaning by writing articles online, make hyperlinks.

Links
www.johotheblog.com

Discussion between Andrew Keen and Weinberger moderated by Walt Mossberg (Wall Street Journal)

Keen is the author of ‘The Cult of the Amateur’. One of the things that triggered Keen is that Weinberger states that we want more complexity, because it reflects the innate complexity of our world. Keen finds that our media shouldn’t reflect the world. For Keen it needs to educate and entertain in meaningful ways. The job of the media is to simplify the world to create a better understanding.

Walt Mossberg takes the discussion a step further into the direction of the neutrality of information on the web. How do you know on the web when you read a review, a computer review, that the reviews aren’t created by the manufacturers? The moderator mentions that at the Wall Street Journal that he as a editor and blogger he doesn’t accept reviews and gifts such as computers to be neutral. The community can’t know this.

And so PICNIC begins! Knowledgeland will report to you with live blogs. Today we will kick off with the session Creating More using Public Content, centred around the largest Dutch digitization project Images For the Future which started early July 2007.

Vincent Evers (PC-Zapper) hosts the session. He also live twitters the event to his network. So also take al look at http://twitter.com/vincente. Main question. What to do with public content and their business models? It’s all about running after money, content and rights. Hans Westerhof, who wrote the business plan for Images for the Future and got (almost half the money from a similar project of the Library of Congress) a huge amount of subsidy. Vincent characterizes Hans as: first everybodies enemy, now everybodies friend.

Hans Westerhof (Institute for Image and Sound) explains the basics of the project Images for the Future. The necessity to act now was partly the decaying of the collection. In 2005 the Ministry of education brought the partners together. Funding comes from the Fund of Economic Structure. To convince the economics of the Netherlands, he had to prove that by using this material the general public, which is the Dutch audience, would profit more than it costs. Westerhof got the following deal: costs are 173 million Euro. Images for the Future gets 154 million Euro. And: 19 million has to be earned. This means, services have to generate a serious amount of money.

Right now their is a start with digitizing the material itself. He gives an overlook of how things will look like in the near future. Public digital daily ingestion of content from all public broadcasters, analogue content which will be digitizes, and a lot of possible outlets for all content.

In the Medialounge of the Institute of Sound and Image the material which has already been digitized, is now available. Video clips are available in Teleblik, a scholary service. Images for the future will have an new service for education. Therefore, there are agreements on the use of the content with copy right owners. It is not upscaled now, but will be.

Hans puts forward that if we want to earn money, we can only do this when the copy righters allows this. This is a win win situation. There is content analogue now closed up in volts. For now, they work with a system only for professionals. What happens if you unlock this?

A recent experiment is the branded channel on YouTube Sound and Image created with a lot of old Polygoon material. This is material they have never thought to be popular, but what happened? Making this material avalaible shows that there are already 10.000 of downloads of the Beatles clips. You have to combine the world of the public, the richness of the archives , the world of the right owners and use the potential of services. Release the value. Not fight each other, but work together.

See www.imagesforthefuture.org for an update on activities and research and snippets of the collection
Peter Kaufman (Intelligent Television) addresses 4 developments:
1. We are all producers of screen based media. Everything has it’s own market.
2. We are all involved in peer production.
3. The cult of the amateur is a great benefit to us all.
4. 20% of all US internet users watch or download a video per day. There is a growing demand on video content in education. Education and music are the most popular themes. Take a look at new launched platform Kaltura.com.
5. This is a great moment to work with archives. In Culpeper, Virginia, the National Audio-Visual Conservation Center will open and be full running in 2009. Access will be made possible to all cultural heritage. On the brand new campus, their are 45 acres created to house flim, video, audio in 124 volts.

What has to be done? Publishers and media professionals of the last decade were right. Collaborative working is the key. Soviet constructivists (like Dziga Vertov) in the 1920’s were agnostic in what media could be. They already talked about open content. This is what the Center aims at: to establish a creative laboratory, collaborting with different partners: educators, commercial and public organizations etc. It runs now for only 4 weeks altogether. They all work to create more av-material for education. Nice consideration: The Library of Congress project is co-funded by the Hewlett Packerd foundation for 250 million Dollar.

See also Peter Kaufman’s article about the changing role of archives: http://www.firstmonday.org/issues/issue12_4/kaufman/index.html

Paul Gerhardt (BBC Creative Archive). Gerhardt shows us some examples about how public content is used. It illustrates BBC vision on public content. As an experiment they gave an artist direct access to the BBC Archive, he could do whatever he wanted. He put together material from his home town, White Chappel, and made a documentary which he showed at the local library. In the archive he found a film from the 1970’s which starred 4 boys. In the documentary he interviewed the boys, now adult men. This is a work which addresess the debate and discussion on the nature of making film. How can we have a say in how we are filmed? It’s about exploring identity.
This brings Gerhardt to the core of what the BBC is trying to do. How can content play a role in communication? The written word is central. Gerhardt takes us along the history of media playing a role in communicating thoughts and ideas. According to Gerhardt, moving images had to develop beyond the traditional 1-1 and one to many communications. Issues which have to be addressed are:

• access
• technology
• copyright

How to go beyond this? This question brings him to the next. How to access the archives? BBC’s New Charter was the beginning of a new direction of the BBC, one which aimed to be a more open BBC. Funding through license fee. How to convince a 10 year old to pay for the fee?
The BBC pilot Creative Archive was based on the Creative Archive License. Members who pay for the fee, would be able to download, modify, create and share in a non commercial environment. 500.000 downloads, 100.000 registered users. Rights holders and commercial parties were eventually very interested in the model.

Ambition is to combine public value and commercial value, a business model that allows people to upload their own content and make something new of it. Low res material will be for free, for high res you have te pay. A lot of companies are interested and partner in the project. For example: major commercial archive, MLA considers it as a window for their own business. Ambition is not be competitors .. but to create a new competitive sector with a single interface for users to use the content. According to Paul, eventually most fear of rights owners will evaporate once they see that it has a social and public function.

Read more at pgerhardt.blogspot.com
Brian Gruber (Fora TV). Parallel to the detoriation of collections, Gruber signals a degradation of public discourse in US. Perhaps there is a way to bring a new forum on an global scale which will facilitate public discourse? Gruber had the idea to take the best forums in the world and create Fora.tv. Here you can have access to all possible public forums, university events, book clubs etc. Everything which is available on this, Fora TV wants. He signed contracts with venues providing this content. The content is copyright protected. What is in there for the content venues?

1. It can bring your content to a much larger audience.
2. All content is free to use. But you can distribute your business and you have a rather small but very solid community of users.

In some cases you don’t want to be on YouTube but you do want to be in a more trustworthy environment. The issue is to come create an online community for those who have been under served until now.
What can you do on Fora TV? It aggregates all top public forums in US and international countries and major cities. 7/8 programmes per day. Anyone can upload content en make their own channels. Whatever issue (science, education, parenting etc.) can be seen. Watch a clip and watch the whole programme. Fora TV chapters all content, you can send it to 1000 people, you can search on words and then the clips will play that selection. Deep information on speakers (bios etc.) is available, you can add links.

Long term idea according to Gruber: video is the beginning of the conversation. Download the content to whatever you want (eg Playstation). Virally distribute widgets to your blogs etc. Premise is simpel: unlock the value of the content by a network of physical people.
Background on the session

In the project Images for the Future over 137.000 hours of video, 22.510 hours of film, 123.900 hours of audio and 2.9 million photos will be digitized in the next seven years. Most content is copyright protected, but parts of the collection are being offered under open licenses. Third-party developers can use this content to create their own services. What lessons can be drawn from other projects and how can external developers be encouraged to create using this public content? Three excellent international speakers will share their vision about one of the greatest challenges in the next years for archives, museums, libraries and broadcasters: how to develop new services and stimulate use of their digitized collections. Peter Kaufman (Intelligent Television) advises the Library of Congress about digitization, Paul Gerhardt was director of the BBC Creative Archive and Brian Gruber has a solid streaming business model with Fora.tv. Hans Westerhof (Sound and Vision) will present the project Images for the Future. The session will end with a panel discussion lead by moderator Vincent Everts.

PICNIC ‘07 has started! Knowledgeland hosts several events and has sent scouts to others. Keep this blog open for the latest updates!