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The threshold pledge or fund and release system is a way of making a fundraising pledge as a group of individuals, often involving
charitable The practice of charity is the voluntary giving of help to those in need, as a humanitarian act, unmotivated by self-interest. There are a number of philosophies about charity, often associated with religion. Etymology The word ''charity'' or ...
goals or financing the provision of a public good. An amount of money is set as the goal or ''threshold'' to reach for the specified purpose and interested individuals will pitch in, but the money at first either remains with the pledgers or is held in
escrow An escrow is a contractual arrangement in which a third party (the stakeholder or escrow agent) receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacti ...
. When the threshold is reached, the pledges are called in (or transferred from the escrow fund) and a contract is formed so that the collective good is supplied; a variant is that the money is collected when the good is actually delivered. If the threshold is not reached by a certain date (or perhaps if no contract is ever signed, etc.), the pledges are either never collected or, if held in escrow, are simply returned to the pledgers. In
economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes ...
, this type of model is known as an assurance contract. This system is most often applied to creative works, both for financing new productions and for buying out existing works; in the latter cases, it is sometimes known as ransom publishing model or Street Performer Protocol (SPP).John Kelsey; Bruce Schneier
"The Street Performer Protocol"
USENIX Press, ''The Third USENIX Workshop on Electronic Commerce Proceedings,'' November 1998.


Street Performer Protocol

Street Performer Protocol is an early description of a type of threshold pledge system. SPP is the threshold pledge system encouraging the creation of creative works in the
public domain The public domain (PD) consists of all the creative work to which no exclusive intellectual property rights apply. Those rights may have expired, been forfeited, expressly waived, or may be inapplicable. Because those rights have expired, ...
or
copyleft Copyleft is the legal technique of granting certain freedoms over copies of copyrighted works with the requirement that the same rights be preserved in derivative works. In this sense, ''freedoms'' refers to the use of the work for any purpose ...
ed, described by Steven Schear and separately by
cryptographer Cryptography, or cryptology (from grc, , translit=kryptós "hidden, secret"; and ''graphein'', "to write", or ''-logia'', "study", respectively), is the practice and study of techniques for secure communication in the presence of adver ...
s John Kelsey and
Bruce Schneier Bruce Schneier (; born January 15, 1963) is an American cryptographer, computer security professional, privacy specialist, and writer. Schneier is a Lecturer in Public Policy at the Harvard Kennedy School and a Fellow at the Berkman Klein Cente ...
. This assumes that current forms of
copyright A copyright is a type of intellectual property that gives its owner the exclusive right to copy, distribute, adapt, display, and perform a creative work, usually for a limited time. The creative work may be in a literary, artistic, educatio ...
and business models of the creative industries will become increasingly inefficient or unworkable in the future, because of the ease of copying and distribution of digital information. Under the Street Performer Protocol, the artist announces that when a certain amount of money is received in
escrow An escrow is a contractual arrangement in which a third party (the stakeholder or escrow agent) receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacti ...
, the artist will release a work (book, music, software, etc.) into the public domain or under a free content license. Interested donors make their donations to a publisher, who contracts with the artist for the work's creation and keeps the donations in escrow, identified by their donors, until the work is released. If the artist releases the work on time, the artist receives payment from the escrow fund. If not, the publisher repays the donors, possibly with interest. As detailed above, contributions may also be refunded if the threshold is not reached within a reasonable expiring date. The assessed threshold also includes a fee which compensates the publisher for costs and assumption of risks. The publisher may act like a traditional publisher, by soliciting sample works and deciding which ones to support, or it may serve only as an escrow agent and not care about the quality of the works (like a
vanity press A vanity press or vanity publisher, sometimes also subsidy publisher, is a publishing house where anyone can pay to have a book published.. The term "vanity press" is often used pejoratively, implying that an author who uses such a service is pub ...
).


Ransom model in software

In
software Software is a set of computer programs and associated software documentation, documentation and data (computing), data. This is in contrast to Computer hardware, hardware, from which the system is built and which actually performs the work. ...
,
source code escrow Source code escrow is the deposit of the source code of software with a third-party escrow agent. Escrow is typically requested by a party licensing software (the licensee), to ensure maintenance of the software instead of abandonment or orphaning ...
is a publishing model that applies the SPP to
source code In computing, source code, or simply code, is any collection of code, with or without comments, written using a human-readable programming language, usually as plain text. The source code of a program is specially designed to facilitate the w ...
(often involving existing
proprietary software Proprietary software is software that is deemed within the free and open-source software to be non-free because its creator, publisher, or other rightsholder or rightsholder partner exercises a legal monopoly afforded by modern copyright and i ...
) which is eventually released under an open source or
free software Free software or libre software is computer software distributed under terms that allow users to run the software for any purpose as well as to study, change, and distribute it and any adapted versions. Free software is a matter of liberty, no ...
license.


History

The Street Performer Protocol is a natural extension of the much older idea of funding the production of written or creative works through agreements between groups of potential readers or users. The first illustrated edition of John Milton's '' Paradise Lost'' was published under a subscription system; and Mozart and Beethoven, among other composers, used subscriptions to premiere concerts and first print editions of their works. Unlike today's meaning of '' subscription'', this meant that a fixed number of people had to sign up and pay some amount before the concert could take place or the printing press started.
These three (piano) concertos K413-415 ... formed an important milestone in his career, being the first in the series of great concertos that he wrote for Vienna, and the first to be published in a printed edition. Initially, however, he followed the usual practice of making them available in manuscript copies. Mozart advertised for subscribers in January 1783: "These three concertos, which can be performed with full orchestra including wind instruments, or only a quattro, that is with 2 violins, 1 viola and violoncello, will be available at the beginning of April to those who have subscribed for them (beautifully copied, and supervised by the composer himself)." Six months later, Mozart complained that it was taking a long time to secure enough subscribers. This was despite the fact that he had meanwhile scored a great success on two fronts:…
However, there are a number of differences between this traditional model and the SPP. The most important difference is that traditionally, the subscribers would be among the first to get access and would do so with the understanding that the work would likely always be a "rare" good; thus, there was some status in owning a copy, as well as the prestige of being among the patrons. Additionally, subscriptions were generally sold at a set price, but some wealthy subscribers may have given more in order to be a patron. In the modern Street Performer Protocol, each funder chooses the amount they want to pay, and the work is released to the public and freely reproduced. In 1970, Stephen Breyer argued for the importance of this model in "
The Uneasy Case for Copyright "The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies, and Computer Programs" was an article in the '' Harvard Law Review'' by future United States Supreme Court Justice Stephen Breyer in 1970, while he was still a legal academ ...
". The Street Performer Protocol was successfully used to release the source code and brand name of the
Blender A blender (sometimes called a mixer or liquidiser in British English) is a kitchen and laboratory appliance used to mix, crush, purée or emulsify food and other substances. A stationary blender consists of a blender container with a rotating me ...
3D animation program. After NaN Technologies BV went bankrupt in 2002, the copyright and trademark rights to Blender went to the newly created NaN Holding BV. The newly created Blender Foundation campaigned for donations to obtain the right to release the software as free and open source under the
GNU General Public License The GNU General Public License (GNU GPL or simply GPL) is a series of widely used free software licenses that guarantee end users the four freedoms to run, study, share, and modify the software. The license was the first copyleft for general ...
. NaN Holding BV set the price tag at 100,000 euros. More than 1,300 users became members and donated more than 50 euros each, in addition to anonymous users, non-membership individual donations and companies. On October 13, 2002, Blender was released on the Internet as free/open source software. Variations of the SPP include th
Rational Street Performer Protocol
and th
Wall Street Performer Protocol


List of threshold-pledge websites

* Community Funded - A crowdfunding platform-oriented threshold-pledge website (threshold-pledge currently disabled) *
GlobalGiving GlobalGiving is 501(c)(3) non-profit organization based in the United States that provides a global crowdfunding platform for grassroots charitable projects. Since 2002, more than 1.6 million donors on GlobalGiving have donated more than $750 mi ...
- A project-oriented threshold-pledge website * IndieGoGo - A project-oriented threshold-pledge website * Kickstarter - A project-oriented threshold-pledge website * PledgeBank - An
honor system An honor system or honesty system is a philosophical way of running a variety of endeavors based on trust, honor, and honesty. Something that operates under the rule of the "honor system" is usually something that does not have strictly enf ...
fund and release website *
PledgeMusic PledgeMusic was an online direct-to-fan music platform, launched in August 2009. It was started to facilitate musicians looking to pre-sell, market, and distribute projects; such as recordings and concerts. It bore similarities to other artist p ...
- A direct-to-fan music funding website *
RocketHub RocketHub was an online crowdfunding platform launched in 2010, its first use was September 1, 2009. Based in New York City, its users included musicians, entrepreneurs, scientists, game developers, philanthropists, filmmakers, photographers,Hai ...
- An international project-oriented pledge website *
Sellaband Sellaband was a music website that allowed artists to raise the money from their fans and the SellaBand community in order to record a professional album. Sellaband used the mechanisms of crowdfunding and was to be seen as a Direct-to-Fan/ fan-f ...
- A crowdfunding music funding website *
Tides Center Tides Foundation is an American public charity and fiscal sponsor working to advance progressive causes and policy initiatives in areas such as the environment, health care, labor issues, immigrant rights, LGBTQ+ rights, women's rights and human ...
- A project-oriented threshold-pledge website *
Patreon Patreon (, ) is a membership platform that provides business tools for content creators to run a subscription service. It helps creators and artists earn a monthly income by providing rewards and perks to their subscribers. Patreon charges a com ...
- A crowdfunding platform providing "recurring funding for artists and creators"


See also

* Assurance contract * Contingency market * Copyright social conflict * Crowdfunding


References

{{reflist


Further reading

* John Kelsey and Bruce Schneier
The Street Performer Protocol and Digital Copyrights
''
First Monday ''First Monday'' is an American legal drama television series which aired on CBS during the midseason replacement from January 15 to May 3, 2002. The series centered on the U.S. Supreme Court. Like another 2002 series, '' The Court'', it was i ...
'' 4(6), 1999. * Crosbie Fitch
The Digital Art Auction
- March 2001. * Chris Rasch
The Wall Street Performer Protocol
''
First Monday ''First Monday'' is an American legal drama television series which aired on CBS during the midseason replacement from January 15 to May 3, 2002. The series centered on the U.S. Supreme Court. Like another 2002 series, '' The Court'', it was i ...
'' 6(6), 2001. (tROT) *
Karl Fogel The Open Source Initiative (OSI) is the steward of the Open Source Definition, the set of rules that define open source software. It is a California public-benefit nonprofit corporation,_with_501(c)(3).html" ;"title="110. - 6910./ref> is a type o ...

The Promise of a Post-Copyright World (Threshold Pledge System section)
- QuestionCopyright.org, October 2005 Payment systems Copyright law Fundraising