# a blog about things that I've been thinking hard about

# How the Tech Industry Could Fund Free Content

21 February, 2006
Combine my Voted Compensation system with a suggestion from Hannibal at ArsTechnica, and you end up with a practical scheme for worldwide funding of free entertainment content, where consumers pick the winners after they are produced, and not before.
by Philip Dorrell

## The Tech Industry Should Fund Free Content, But How?

In DRM and the tech industry's "girlie men", Hannibal at ArsTechnica suggests that the tech industry should fund the development of free content so that customers would go out and buy the hardware to play it on.

But then he asks:

> Find it unlikely that tech companies, who can't even seem to produce advertising that's entertaining and attractive, could ever fund a TV show or movie that you'd actually want to watch?

So I am going to suggest a possible answer: private Voted Compensation.

## What is Voted Compensation?

You can go and read the long article that I wrote explaining this system, or you could read the following short version:

- Artists register content and licence it for free distribution.
- Money is collected from somewhere to be allocated to artists.
- Consumers vote on who should receive the money.

The rationale of Voted Compensation is that it is a democratic alternative to democratically voting ourselves into "DRM hell" for the supposed benefits of paying content producers – instead we just vote how much to pay the content producers, and do without the DRM, and as a bonus we get access to enormous amounts of free content.

### Technical Difficulties

There are a few technical difficulties to be overcome, like where does the money come from, and how do you stop people from just voting money to their friends? The answer to the first question (in the system design described in my article) is that it comes from taxes on content-playing hardware. The answer to the second question is a combination of negative voting, proxies, meta-voting and transparency about who receives how much money for what (so that voters can see how well the system works and whether anyone is "cheating").

A couple of other difficulties are cross-border issues (i.e. fair sharing of funding and content between different countries), and the sheer mechanics of managing and securing the voting. (I'll deal with these shortly.)

### After the Fact, Not Before

A crucial feature of Voted Compensation, and one that distinguishes it from many other tax-funded content-creation schemes, is that artists only get money after they have distributed content, and after consumers have decided that they like the content.

Ignoring the fact that a voting compensation system is tax-funded, involves voting, and is kind-of socialistic, it's almost like a market, because producers get paid based on results, not on estimated future results.

## Privatising It

But if Hannibal succeeds in convincing tech companies to fund content creation, then the tech company funding can replace the tax-funding, or to put it another way, the tech companies can pay a voluntary tax which they add into the price of each item of hardware that they sell.

The next problem is Hannibal's worry that maybe we can't trust tech companies to pick winners. We can deal with that by giving the tech companies a different job, which is to manage the voting in a Voted Compensation system. And the easy way to do that is to build the voting mechanism into the hardware.

One of the hard things about voting (in any voting system) is identifying who is allowed to vote, and then keeping track of whether they have voted or not. But all this stuff can be done with special hardware and public key cryptography.

## Details of the Voting System

For example, for each piece of content-playing hardware, create a voting identity for that hardware, and associate with it a quota of votable dollars. For example, it might be $1 a month for 3 years (the expected lifetime of the hardware before it becomes obsolete). The voting identity is represented by a cryptographic hash (the so-called "fingerprint") of a private key, where the private key is embedded into a special voting device.

The voting rules say that the owner of the hardware can vote $1 to their favourite content producer each month (or more precisely, they should vote for the specific registered content, and the producer that registered the content gets the money). They do this by running software on their PC which talks to the voting device and asks for a cryptographic signature for the vote which the user has entered on their PC. The PC then submits this vote over the Internet to the voting centre, which checks the signature against the database of voting allocations, and verifies that the vote is valid. Finally the content producer gets the money added to their income (subject to all the anti-corruption mechanisms that stop people from voting for their friends).

### Security

The security of the system depends mainly on the physical integrity of the voting device (and it is mildly in the interest of the consumer not to break this security, otherwise they might lose their vote). Secondarily it depends on the PC not being hijacked by some kind of malware (this could be partly prevented by giving the content hardware direct IP access and allowing the voting to occur on the hardware itself, but that would probably add to the cost).

## How Many Problems Does this Solve?

### Cross-Border Issues, Voter Identity, Corruption

The cross-border issues go away, perhaps to be replaced with cross-company issues, like how much "voluntary" tax does each company add to the price of the hardware that it sells. The voter identity problem is solved by physically embedding identity into the hardware. The "corruption" problem (people voting for their friends) remains essentially the same, so the various measures discussed in my long article are still relevant.

### Costs of software, hardware and admin

Another issue is that someone still has to write all the software to manage the system, although I think that open source programmers might be more than willing to contribute effort to such a project, given their general enthusiasm for free information and free culture. There are also the hardware and salary costs of running the system, which will have to be included in the overheads funded by the voluntary "tax" (and this is the same whether in a public system or a private system).

## An Extra Bonus: Free Social Bookmarking

The voting centre ends up with a lot of information about what people like. This information can be recycled to consumers, who can use it to find out about what other people like. Thus the Voted Compensation system becomes a giant social bookmarking system for digital entertainment content.

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