Owl in flight

Using the economics of “free” to help Haiti

Last week, Sean Patrick Fannon got an interesting idea on how to raise money for Haitian relief. Fannon works for RPGNow, a web site that allows tabletop RPG creators to upload their games as print-on-paper PDFs, set a price, and sell them via download. Fannon emailed all the game creators who sell through his site and pitched them this concept: If they’d donate a game, Fannon would bundle them into a single $20 downloadable purchase, sell as many as he could, and donate the proceeds to Haitian relief. Pretty soon dozens of game designers were uploading their gaming items — ranging from little monographs on Second World War munitions to entire 300-page book-length game manuals that would cost $45 if you bought them in printed format. So many designers offered their wares that the bundle now contains $1,481.31 worth of product … which you can get for only $20.

A pretty awesome value, eh? Indeed, it’s excellent enough that RPGNow has raised, as of today, a remarkable $132,325.00 for Haiti. (That total includes direct $5-to-$10 donations made through the site, too.)

It’s a cool enough story on its own. But there’s also some interesting economic behavior here, too, on the part of the game designers. On the one hand, they’re giving copies of their stuff for charity — i.e. forgoing possible profits. Or are they? Since there’s no additional costs in making more PDFs, the question of foregone profits hinges entirely on whether the creators think the folks buying the $20 pack might otherwise be prospective customers. As Greg Stolze — a game designer who donated some of his own work to the project, and who alerted me to this sale — pointed out in an email, the project …

… highlights the plasticity of an idea’s value in an internet market, that’s for damn sure. I stuck my book eCollapse in the bundle: It hadn’t been much of a mover, so I don’t think I’ve lost even hundreds of dollars of sales by throwing it in, and it’s probably the same with almost everyone else. No one’s really taking a serious hit because we don’t have to risk sunk material costs, just abstract potential profits.

It puts me in mind of Chris Anderson’s argument in Free, which is that when the cost of something goes to zero, it evokes new economic phenomena: Consumers become more experimental, and creators can focus on the free (or near-free) mass distribution of their works, while making money off other stuff — like add-on services and goods, customization, or the like. In this case, the game designers can feel proud that they’re helping raise a lot of money for a good cause while also possibly expanding the universe of people who know their work, and might be likely to pay for new works in the future.

Stolze, I should point out, pioneered one of my favorite new economic models that leverages digital-age behavior: The “ransom” model of publishing. Back in 2005, he announced on his blog a concept for a new game he was designing, and told his audience that he was accepting donations for it. If he reached $600 in pledges, he’d design the game and release it as a free PDF for anyone to download. In other words, if enough of his hard-core fans decided they were willing to pay for the game, anyone could get it. It thought it was a brilliant concept, and as it turns out …

… it’s so brilliant that it’s roughly the model behind Kickstarter, a web site that launched last year offering precisely the same service: Anyone can announce a project, set a financial goal, and see if enough people are willing to support it! Fittingly, Stolze is using Kickstarter to pursue the ransom model again — this time to publish short fiction. Check his page out!

And if you’re into RPGs, seriously, go buy that $20 pack for Haiti. It’s a crazy value for the money.

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I'm Clive Thompson, the author of Smarter Than You Think: How Technology is Changing Our Minds for the Better (Penguin Press). You can order the book now at Amazon, Barnes and Noble, Powells, Indiebound, or through your local bookstore! I'm also a contributing writer for the New York Times Magazine and a columnist for Wired magazine. Email is here or ping me via the antiquated form of AOL IM (pomeranian99).

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