3. Top Left: Open and Paid On the top left we see see strategies that combine paid strategies, but with open content. This is the strategy of the free and open source software sector, where the code itself is available for download, (though 'premium' paid packages are also often available), but labor and development, and all kinds of derivative value services, are only obtainable through payment. However, because the code itself is free, open source businesses can generally operate with lower pricing structures than their pure play proprietary counterparts. Open source companies following this strategy, forego the intellectual rent that they could get from proprietary IP, but gain competitive advantage through their lower pricing. 4. Bottom Left: Open and Free Finally, we have the bottom left quadrant, which combines open IP and free services. A paradigmatic example would be the Couchsurfing economy, based on the free sharing of lodging. Obviously, such strategies would definitely impact closed proprietary 'for pay' strategies, but, such demonetized core can still generate economic value. For example, in the case of couchsurfing, it may enable travel by those who would not be able to afford for-pay hospitality services, but because of their travel, would still spend money on transport, food and cultural services in the region that they visit.
In conclusion: The general point however, is that faced with 3 possible counter-strategies that take into account the free reproduction of immaterial value, pure play strategies based on closed IP, and sold for-pay, face unfavourable competitive dynamics. This makes their continued dominance very problematic, and perhaps, not appropriate for the digital age. The only way to maintain the state-enforced IP monopolies intact are through the criminalisation of the sharing practices of the user communities, or through technological disablement of the networks (DRM, Trusted Computing and other software or hardware models). Both methods create serious problems of legitimacy and hold back on the very innovation that is the mainstay of market processes. According to Charles Leadbeater in We Think29, social forms of production, i.e. open and collaborative forms of organisation such as the peer production communities, tend to emerge because they tend to outperform traditional corporations in their three critical functions:
A. How to Motivate Corporations can usually count on extrinsic positive motivation, i.w. work in exchange for money. But other motivations are a rarely achieved uncertain premium, while peer production communities can rely on intrinsic positive self-motivation. According to Yochai Benkler, in peer production, any motivation becomes productive.
29 Leadbeater, Charles. We-Think: Mass Innovation, Not Mass Production. Profile Books, 2010. 41