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Supporting Service Innovation Through Knowledge Management

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Open Content in the Creative Industries - A Source for Service Innovation?

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Traditional business models of the creative industries are built on the protection of content.
With the advent of an Internet culture where content is ‘sold’ at a price of zero and sharing is
a key paradigm, that model seems not to be fully adequate any longer, even more, there
might be a time when content alone won’t pay anymore. The chapter proposes that service
innovation on top of and around open content could be the answer to that challenge.

The chapter then presents five examples from the creative industries that have successfully
embraced open content and developed and implemented a business model that is
sustainable: VEB Film Leipzig, Al Jazeera, Nine Inch Nails, Prelinger Archives, and FabLab.

Far from claiming that these five examples would present five archetypal template solutions,
they however explain how businesses arrived at these models, what the reasons were to
choose one or another solution. The chapter concludes with some roughly sketched general
impacts of embracing open content in the creative industries and postulates that service
innovation may never stop as customers themselves and their needs evolve.

Open Content, Creative Industries, Intellectual Property,

Creative Commons, FabLab
 Supporting Service Innovation Through Knowledge Management

The turn of the 21st century has seen a shift in public interest from knowledge to creativity
and a growing focus on creative industries from an economic and wider social perspective
(see e.g. Scott 1999, DCMS 2001, Florida 2002, Steenhoven, Stikker et al. 2005). Creative
industries typically include advertising, architecture, art and antiques markets, crafts, design,
designer fashion, film & video, interactive leisure software, music, performing arts,
publishing, software & computer services, television & radio (DCMS 2001, see also Fronville
2003, Wiesand & Söndermann 2005).

Those industries have their origin in individual creativity, skill and talent and are seen to have
a potential for wealth and job creation through the generation and exploitation of content
(DCMS 2001, p.4).

Exploitation of content—or ‘intellectual property’ (IP)—traditionally means creating content

once, cashing in on its reuse many times. ‘Creative industries are today firmly established as
a vital component of our lives, substantially contributing to economic, social and cultural
development. Deeply rooted in copyright protection, these industries have demonstrated
growing importance worldwide.’ (WIPO 2006).

Innovation in the creative industries is—so far—largely dominated by legal protection of

content through copyright, trade mark registration and similar mechanisms. Their
enforcement is believed to be vital for business; ‘lack of effective enforcement of copyright
threatens industries, such as the motion picture and publication industries, manufacturers of
computers, computer programs and communication systems, and the broadcasting and music
and recording industries’ (IPC p.64.)

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The availability of digital tools for creative expression and distribution certainly helps these
promises of a society turning creative come true. Yet, this might not be happening exactly in
the way expected by the governments’ and industries’ policy writers. Consumers have started
to become producers of content themselves as well—conveniently labelled as prosumers.

It is only logical that in prosumer communities—which often claim to be themselves the real
source of creative innovation—the free sharing of otherwise copyrighted content has
proliferated. Allegedly with no intention to, or more accurately without the need to generate
Open Content in the Creative Industries - A Source for Service Innovation?

financial revenue the (free of charge) sharing of what would conventionally be copyrighted
content has proliferated.

Coincidentally, an economy has developed online where the default price is zero, as Chris
Anderson notices: ‘Digital goods—from music and video to Wikipedia—can be produced and
distributed at virtually no marginal cost, and so, by the laws of economics, price has gone the
same way, to $0.00. For the Google Generation, the Internet is the land of the free’
(Anderson 2009).

Consequently, creating revenue from content only has become difficult—the music industry
deploring shrinking CD sales being the most vocal representative of that fading business
model of create once, cash in many times. Kendall Whitehouse, senior director of IT at
Wharton, puts it that way: ‘What funded the traditional content model is falling apart. Ideally,
I see Internet content being a blend of professional and amateur content, but how do we
develop an economic model that supports both?’ (Knowledge@Wharton 2008).

The Controller of the European Patent Office, Ciaràn McGinley, publicly asked the provocative
question: ‘Do we still need patents?’ speculating on a phenomenon he chooses to call ‘global
patent warming’, the overzealous IP protection and its potential conflict with competition law
(McGinley, 2008). Vijay Viatheeswaran and Iain Carson noted earlier that ‘patents are
becoming much less important nowadays than brands and the speed at which products can
go to market’ (Viatheeswaran & Carson, 2007). The Dutch think tank iip/create recognizes a
trend of fading classic intellectual property rights (iip/create 2007, p. 45) or rather their
importance for doing business.

A recent European Commission Staff Working Document reported some interesting

discoveries: ‘Approximately twice as many industrial than service firms applied for a patent
and more industrial than service firms applied for a trademark. A much lower percentage of
firms in KIBS [Knowledge Intense Business Services] apply for a patent than industrial firms
(12.0 % versus 20.1 %) and KIBS firms are also less likely to apply for a trademark.’ (EU
2008, p. 17). The study then comes to the conclusion ‘that service firms use more often than
manufacturing firms informal methods of protection to protect their innovations’ (p. 18), such
as publishing, making tacit knowledge explicit, etc. The authors hence advocate the
combination of traditional and informal IP protection.

The challenge for the creative industries, so it seems, is to overcome the traditional
understanding of creative services as repeatedly providing canned content (the ‘create once,
cash in many times’ paradigm) and innovate in a business environment that operates beyond
traditional copyright protection.
 Supporting Service Innovation Through Knowledge Management

‘How to make money with free?’ asks Gerd Leonhard, and goes on to recommend open
licensing as a basis for a new content business: ‘The greatest thing that happened with the
raise of Creative Commmons is that we’ve taken this idea that has been around pretty much
for ever which basically says “I’m giving something for free in return for attention” and then
finding a mechanism to get attribution and make money that way. And this has been around
forever. That’s the way that musicians used to make money’ (Troxler 2008).

Chris Anderson (2009) concludes that ‘free is not enough. It also has to be matched with
Paid. Just as King Gillette’s free razors only made business sense paired with expensive
blades, so will today’s Web entrepreneurs have to not just invent products that people love,
but also those that they will pay for. Not all of the people or even most of them—free is still
great marketing and bits are still too cheap to meter—but enough to pay the bills. Free may
be the best price, but it can’t be the only one.’

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It is suggested that there could exist some analogy to business models common in the
context of open source software—programmers (i.e. creators) distributing a basic package for
free and aiming to earn money through customisations of this basic software and other
added services for paying customers (Culture and Economy, p. 29).

In ‘Better than Free’, Kevin Kelly (2008) postulates a number of generatives that add value to
the freely available material and hence are suited to generate payment. ‘A generative value is
a quality or attribute that must be generated, grown, cultivated, nurtured. A generative thing
can not be copied, cloned, faked, replicated, counterfeited, or reproduced. It is generated
uniquely, in place, over time.’ Generatives, according to Kelly, are immediacy,
personalization, interpretation, authenticity, accessibility, embodyment, patronage, and
findability.

Similarly, Alex Osterwalder (2009) lists a number of ‘value propositions’ with price being the
first one, followed by newness, accessibility, ‘getting the job done’, convenience and usability,
brand or status, performance, risk reduction, customization, and cost reduction.

For the creative industries, the solution to the challenge of obsolete business models is
service innovation. The driver behind this need for service innovation is to embrace open
Open Content in the Creative Industries - A Source for Service Innovation?

content as a given and to use its inherent potential to re-invent sustainable businesses. In an
economy where content per se is free, money can still be made.

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Research on the nature and effects of the shift from the ‘create once, cash in many times’
paradigm to the ‘Internet as the land of free’ where money needs to be made through
additional, generative value propositions is scarce. However, there are a number of well and
less well known cases illustrating how individual entrepreneurs or companies have
approached the challenge and found an business model that appears to work for them.

The most obvious, most conventional and most ubiquitous model is the combination of (free)
content and advertising; it uses the potential of content to attract attention. Since this model
is so widespread I shall not discuss it any further. A second model is to use (free) content to
advertise, promote and eventually sell the creativity and skills required to create it in the first
place. Below, I present one example. Business models built around attracting third party
sponsorship are somewhat related to that approach, and I also describe one example. A third
group of models comes in various shapes and colors, they add packaging, distribution and
other attributes to the (pure) content, creating premium (paid-for) or hybrid ‘freemium’ offers
that combine free and paid-for content (Wilson 2006). Two examples shall illustrate this
group. Finally, I present an example of a service innovation for which the principle of open
content is one of its core ingredients.

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Below I am going to present 5 example case studies of how such open content business
models have evolved. They all have two things in common: they are based on the notion of
open content, and they show some sort of development—how businesses started to
experiment with open content and gradually are moving to embrace it as a fundamental
principle once they have experienced how to achieve the paradox of making money with free.

The case studies also differ in that they talk about newcomers and well-established
businesses, they talk about ventures that need to make money to survive and others that use
open content to build a base to stay in business long-term. The five examples are:

VEB Film Leipzig

Al Jazeera’s Creative Content Repository

Nine Inch Nails

The Prelinger Archives

 Supporting Service Innovation Through Knowledge Management

FabLab

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VEB Film Leipzig is a Movie Net Label and a group of independent film producers, Stefan
Kluge, Mathias Eimann and Gerald Menzel, from Germany. They are primarily known for
producing straight to Internet movies. In 2004, they released their first production, Route 66,
which was the first Open Source movie in Germany. VEB Film Leipzig released the movie
under the second most restrictive Creative Commons license, requiring attribution (the ‘by’
requirement), allowing reuse only in a non-commercial context (the non-commercial or ‘nc’
requirement) and requiring derivative works to be issued under the same license (the share-
alike, ‘sa’, requirement; the license is therefore known as the BY-NC-SA-license).

Their reasoning was pragmatic. The only online platform they could find at the time to
distribute the film free of cost was the Internet archive (archive.org). And archive.org
requires material to be in the public domain or licensed under one of the Creative Commons
licenses. As Stefan Kluge admits him self (Lévy 2008), choosing a restrictive license is ‘what
creators tend to do, since it resembles most closely the conservatieve ideas of copyright,
which are common with creators above the age of 20.’

Figure 1: ‘Broken down’ film still from Route66 by VEB Film Leipzig.

VEB Film Leipzig chose the open content route despite an offering from a German
broadcaster, MDR, over EUR 30.000. In the mean time they have earned more money than
that by attracting sponsorship and donations, through DVD sales and service contracts, as
Kluge confirms in an interview (Lévy 2008). The most positive effects of releasing the film as
‘open source’ according to Kluge were public attention and feedback on the movie, which
motivated the producers to re-invest the money into their next production ‘Die letzte Droge’
(the last drug).

This next production will be released under a much more liberal Creative Commons license,
requiring only attribution (the by requirement) and the release of derivatives under the same
license (the share-alike requirement; the license is therefore known as the BY-SA-license).

For Stefan Kluge, the Creative Commons BY-SA-license is the political and economic
consequence from what he has learnt about Netpolitics and Internet culture: ‘It is high time
for net artists to part themselves from the disproportionate, radical restrictions of the
Generation Copyright and to thrive on the possibilities of the medium Internet. And this only
Open Content in the Creative Industries - A Source for Service Innovation?

works if we don’t get into our own way restricting us from making money with our art. Once
at this point one can start to think about alternative business models, which are not based on
the sale of licences, but rather on services and promotion.’ (Kluge 2008).

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On the 13th of January 2009, the Doha-based news network Al Jazeera announced that it
would release broadcast video footage online under the most persmissive Creative Commons
license ‘attribution only’ (CC-BY), only days after the Herald Tribune carried an analysis of Al
Jazeera’s role in reporting from the Gaza (Cohen 2009).

Al Jazeera was the only broadcasting station that was able to keep their journalists on
location in Gaza. The problem was for them to get their reports to their audience. Particularly
the situation in the United States of America is radically different to Europe and the rest of
the world. According to their own figures Al Jazeera reaches some 130 million homes in over
100 countries with their English language channel (Al Jazeera 2007). In the US there are only
three local cable carriers that broadcast Al Jazeera: in Burlington, Vermont; Toledo, Ohio;
and Washington, D.C., according to Cohen (2009), while wikipedia names a few different
carriers (Al Jazeera 2009a).

Figure 2: Video still from Al Jazeera’s clip ‘Gaza Attack’, 12 December 2008.

Cohen (2009) concludes: ‘Recognizing that its material from Gaza will have influence in the
United States only if it is highly accessible online, Al Jazeera has aggressively experimented
with using the Internet to distribute its reports.’

Obviously, Al Jazeera added another step of service innovation to their accessibility strategy.
Their head of New Media, Mohamed Nanabhay, is cited in the press release: ‘As one of the
only international broadcasters in Gaza, our coverage of the war has been unsurpassed. The
launch of Al Jazeera’s Creative Commons Repository means that our Gaza footage will be
 Supporting Service Innovation Through Knowledge Management

made available under the most permissive Creative Commons license (CC-BY). With the
flexibility of the license we expect to introduce our outstanding coverage to an even wider
audience across the world. This means that news outlets, filmmakers and bloggers will be
able to easily share, remix and reuse our footage’ (Al Jazeera 2009). At the time of writing,
there are no usage statistics of the archive readily available, and digg figures indicate a
relatively low spread of the news in the blogosphere.

Noam Cohem cites Mohamed Nanabhay saying: ‘Part of our mission, our mandate, is to get
our news out.’ In that way, the move of Al Jazeera has been hailed as ‘an important lesson
about how free speech gets built and supported’ by Larry Lessig (Al Jazeera, 2009) and ‘an
attempt to help get the truth of the situation out—a tacit criticism of other mainstream media’
(Miriam 2009).

And Mohamed Nanabhay adds: ‘We don’t have the direct commercial pressures that others
have. If we can make some money that is great’ (Cohen 2009). The motivation behind Al
Jazeera’s Creative Commons Repository is certainly building the brand; and one is free to
read it as a contribution to attract sponsorship in the long run.

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Trent Reznor (born Michael Trent Reznor on May 17, 1965) is an American musician, singer-
songwriter, producer, and multi-instrumentalist. He operates under the studio name Nine
Inch Nails. As of 2007, Reznor split his ties with Interscope Records, and is now an
independent, unsigned musician (Trent Reznor, 2008).

Figure 3: Trent Reznor, photo by Rob Sheridan.

He preceded his departure from Interscope Record with some quite unique promotional
activities, including giving hints to fans which lead them to an online treasure hunt via
Open Content in the Creative Industries - A Source for Service Innovation?

various websites to find hidden mp3-files with new songs (for details see Reuters, 2007), and
planting USB sticks with pre-releases of certain songs at concert venues in Lisbon, Barcelona
and Manchester.

As Reznor explained to The Guardian: ‘The USB drive was simply a mechanism of leaking the
music and data we wanted out there. The medium of the CD is outdated and irrelevant. It’s
really painfully obvious what people want—DRM-free music they can do what they want with.
If the greedy record industry would embrace that concept I truly think people would pay for
music and consume more of it’ (Mackintosh, 2007). These activities, needless to say, upset
the record label and the record industry.

After leaving the label, Reznor started various experiments of giving new albums away for
free, along the lines of what other musicians such as Radiohead, Kristin Hersh, Jill Sobule and
others did earlier. His latest release, The Slip, is released under a creative commons
attribution non-commercial share alike (BY-NC-SA) license, and the free download contains
10 of the 36 songs that actually are on the album. The full nearly two and a half hours of
music are available in various paid-for options; a full download is $5, and there are a variety
of physically packaged editions, including an ‘individually numbered 2 disc, 6 panel digipak’
and a ‘gatefold vinyl release [that] contains 1 LP (180 gram vinyl) and a 24-page booklet’
(Nine Inch Nails, 2008).

Mike Masnick (2009) took to analyse Trent Reznor’s business model and came up with an
interesting formula he suggests ‘is the basis for making money in the music business (and,
I’d argue, many other businesses) in the digital era’.

Connect With Fans (CwF) + Reason To Buy (RtB) = The Business Model ($$$$)

As Masnick (2009) points out, ‘many artists—famous and not so famous—(...) have been
making use (on purpose, or not) of this formula to create successful strategies for building up
a stronger fan base, creating wonderful new works of art, distributing them out to the
community and getting paid for it at the same time.’ Trent Reznor’s case is interesting since it
has been widely discussed in the media and because Reznor himself has been experimenting
with connecting with fans and giving them a reason to buy in quite varied ways—treasure
hunt, USB-sticks, free downloads, premium packaged editions, to name a few.

Masnick points out, that the model, while simple, actually needs to be implemented in ways
that suit the particular skills and needs of any single artist. Further, he makes a point in
saying that ‘a true reason to buy (RtB) is a voluntary transaction’. This relates to and is based
on the aspect of authenticity mentioned earlier. Lastly, he argues that artists themselves
need to be involved, not only the music business: ‘You cannot connect with fans if you’re in
seclusion’ (Masnick 2009).

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On 19 August 2002, the Library of Congress announced the acquisition of the Prelinger
Collection, a collection of more than 48.000 historical ‘ephemeral’ movies, from its owner,
Prelinger Archives of San Francisco. This collection of advertising, educational, industrial,
amateur, and documentary films had been started some 20 years earlier by Rick Prelinger
 Supporting Service Innovation Through Knowledge Management

when he was working on an all-archival documentary. The particularity about all these films
is that most of them are in the public domain, i.e. their copyright has expired or they have
never been registered for copyright (for works created in the US by US citizens, a registration
is required before an infringement suit may be filed before a US court). In the late 80ies, Rick
Prelinger started to produce and sell videodisks with selected films and so turned a hobby
into a business.

When the Prelinger Archives started, they used traditional physical and contractual control
over the material to prevent unauthorized copying. Already in 1994, when producing an
anthology of 10 CD-ROMs with historical films from the collection, they did not prohibit users
from copying and repurposing the material (Prelinger, 2002).

In 1999, Rick Prelinger was confronted with the idea to move his whole collection on to the
Internet:

‘I moved to California and called Brewster Kahle, founder of the Internet Archive on
the telephone and in about three seconds, he said to me, “Do you want to put your
archives online for free?” This is the kind of question that is very difficult to answer
when you’re out walking the dog, if you’ve never thought about it before and you’re
operating from a model of scarcity. But in about three months when I’d learned a
little bit about what people were doing in the software industry and how there was a
functioning gift economy, at least in California, I’d come to agree with him. I saw
how it was possible to adapt some of the paradigms of the IT world to the world of
content distribution that it came in. So at the beginning of 2001 we made a page
with links to 270 films which has now grown so that now there are about 2000 films
available online for free viewing, downloading and reuse. It would be more, we just
need to get the money to do some more film to tape work’ (Prelinger, 2005).
This did not prevent the Prelinger Archives to elect Getty Images as their exclusive
representative for stock footage, a quite successful partnership:

‘Getty Images doesn’t like me to talk specific money figures, but if we earned ‘x’ in
the year 2000, in 2004 we earned ‘x’ plus 62 per cent—and this in a period where
the price of stock footage has gone down, where there’s been a great deal of
competition and where there’s also been a tremendous slump—between 2001 and
2002 a lot of people left the business’ (Prelinger, 2005).
The difference between the Internet Archive and Getty Images is a difference in service.
While the Internet Archive does not provide written license agreements or make any other
representations or warranties other than the Creative Commons License, Getty Images
furnishes written agreement. The Internet Archive does not provide physical copies, the
material is digitally available in the standard MPEG-2 broadcasting quality. Getty Images does
provide online and physical material.
Open Content in the Creative Industries - A Source for Service Innovation?

Figure 4: Still from Getty Images Clip 83547542 ‘Dog eagerly awaits being fed.’

Further, the material on the Internet Archive is typically complete films that are commented
on, and indexed by users of the archive, such as the 9 minutes long promotional newsreel
from 1937, ‘Chevrolet Leader News (Vol. 3, No. 1)’ (Handy 1937), featuring a number of
Chevrolet-centric stories. Getty Images footage, to the contrary, is accessible as short clips of
the type ‘Dog eagerly awaits being fed. He sits up and begs’ with a length of 8 seconds and
11 frames, for example (Getty Images, 1937), which is actually a sequence from the above
newsreel, starting at around 8 minutes 38 into the Chevrolet newsreel.

The free-to-download footage give the Prelinger collection accessibility and visibility, as did
the earlier releases on video discs and CD-ROMs. The additional service of Getty Images
consists in providing the material in a format (clips), package (license), findability and speedy
delivery that suits the needs of the movie industry.

‘Anecdotally we know that a tremendous number of people come to us and then go

on to Getty afterwards. And Getty actually points people to the Internet Archive now
promotionally which is very interesting. They publish that little magazine for
creators—you probably get it for free if you’re a producer or an art director – and
they have these historical pages and they point to the Internet Archives. So, we’re
not actually competing, I think, in their view’ (Prelinger, 2005).

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Interestingly, the world of open content is not restricted to the digital field. Under the namer
‘FabLab’, short for fabrication laboratory, a movement has silently begun to conquer the
world of personal, physical fabrication. In analogy to personal computers and desktop
 Supporting Service Innovation Through Knowledge Management

printers, Neil Gershenfeld has not only produced the vision of ‘how to make (almost) anything
yourself’ (Gershenfeld 2005), he has been able to start that ‘revolution on your desktop’.
Today, the FabLab network counts over 35 laboratories from Jalalabad in Afghanistan to San
Diego, California, from Lyngen in Norway to Soshanguve in South Africa, from Amsterdam,
the Netherlands, to Pune in western India (FabLab 2008).

A FabLab, almost independent from its location, consists of a standard set of basic machines:
a tabletop mill, a sign cutter, and a small laser cutter. Standard software is supposed to be
used to draw the blueprints for the products.

Figure 5: FabLab Amsterdam, photo by Ton Zijlstra.

According to location and socio-economic context, the contribution of a FabLab can be quite
diverse, ranging ‘from addressing the most basic human needs (creating jobs) to the most
refined (creating art), from whimsical inventions to ones that are needed for survival’
(Gershenfeld 2005, p. 55). Any activity in a FabLab is, according to the FabLab charter, based
on the global network of labs situated in a local context, the provision of access, a learning
and teaching contribution to education, and the personal responsibility.

Particularly interesting in the context of open content and service innovation are the charter
clauses on secrecy and business.

‘Secrecy: designs and processes developed in fab labs must remain available for
individual use although intellectual property can be protected however you choose;
Open Content in the Creative Industries - A Source for Service Innovation?

Business: commercial activities can be incubated in fab labs but they must not
conflict with open access, they should grow beyond rather than within the lab, and
they are expected to benefit the inventors, labs, and networks that contribute to
their success’ (FabCharter 2007).
The FabLab charter postulates that any designs and processes must be made available for
individual use within the lab. This clause also opens the content produced in a FabLab to any
other FabLab user. It does not introduce artificial scarcity to digital assets that can be copied
easily. Even further, the aspirations of a FabLab to be a place for mutual learning on-site and
in the network actually depend on designs and processes being open. The service innovation
of empowering people anywhere to produce anything with the help of a local set of machines
and a global network of people and experience is fundamentally built on the openness of
content within the network.

Yet the FabCharter limits openness to the personal sphere, be it enjoyment or education.
Doing so, it keeps intact the inherent scarcity of the physical product and the labour put into
its fabrication, thus allowing businesses to grow from a FabLab. And the clause on business
adds another aspect to the innovation model of the FabLab. While a FabLab is supposed to
be a place to innovate, it is not the place to exploit this innovation. Commercial activities are
expected to develop beyond the lab.

One most recent and maybe slightly amusing result of such a venture that initially started in
a FabLab is the ‘chocolate letter Pi’, combining the fascination of mathematicians with the
constant ! and the Dutch tradition of chocolate letters which are traditional gifts for St.
Nicholas day. Dutch natural scientist Hans Wisbrun made his very first steps to produce these
letters at the Amsterdam FabLab (Wisbrun 2009). In March 2009, coinciding with the
international !-day (March 14), they are made available to the readers of one of the country’s
major newspapers, NRC (2009). Chocolate letter Pi is not yet a fully commercial proposal that
would pay money back to the FabLab where it initiated. However it demonstrates the value
of the service offered at a FabLab.

The story of VEB Film Leipzig is an example how creators might stumble upon open content
and the licensing of it when exploring new territories, in this case the area of straight to
Internet movies. While working VEB discovered the promotional effects open content and
 Supporting Service Innovation Through Knowledge Management

open content licensing had for their product and, even more so, for their work. This
eventually convinced them to continue the way of ‘going open’ with their content.

In the Al Jazeera example, the decision is a much more deliberate one. While certainly
motivated by expanding viewership and brand visibility, creating a Creative Commons
Repository not only does that on a pure quantitative basis, the effects of which are so far
hard to estimate, it also adds a qualitative notion of ‘free speech’ and ‘accuracy of reporting’
to the brand image.

The path Trent Reznor chose for Nine Inch Nails is one coming from and leading to a
sustainable business model while changing the reasoning why people would pay him money.
He superseded the old paradigm of closed content—at least partly—with an open content
model while still giving his fans a ‘reason to buy’.

Rick Prelinger developed a unique dual channel strategy to serve the same content to
different audiences, differently packaged and delivered, taking into account findability and
timeliness of the offer. On top of that, the two channels appear to be influencing each other
positively.

The FabLab example finally demonstrates how certain aims are best achieved by
incorporating open content principles into the core of an innovative service offering. It shall
be interesting to see if the FabLab can spin the idea of ‘sharing’ into businesses that grow
from a FabLab, similar to the aims of the share-alike requirement of the Gnu Public License
(GPL) and some Creative Commons licenses.

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The business impacts of building on and around open content in service innovation are
threefold.

One, with digitally born and digitally available content, one has to recognize that the
traditional models built around scarcity of a resource don’t hold any more.

Two, and that follows from one, service innovators are forced to think harder about what
their customers really need so a new service will add such value that the customers are
actually willing to pay for, the reason to buy.

Three, it might well be, and the examples of Al Jazeera and Nine Inch Nails suggest it, that
service innovation around open content actually has to become a continuous process that
unfolds as the customer base evolves so the service provider stays in contact with the
customers.
Open Content in the Creative Industries - A Source for Service Innovation?

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There are numerous additional cases that could have been added to the list but have been
left out on purpose. The aim of this chapter was not to provide a complete overview of open
content applications in service innovation in the creative industries. Rather it aimed to provide
some insight into a still rapidly evolving theme within the industry.

One whole complex of open content models is worth mentioning as a small appendix—
models building on user generated content. Two basic principles are behind involving users in
the generation of content. Firstly, they are often the ones who really know. And secondly,
they are often more than willing to contribute. The most famous examples are sites such as
YouTube, Flickr or Wikipedia—each following their own business model. But there are much
more nimble uses of user generated content, such as musea and archives opening up their
collections to amateur historians who then contribute in depth knowledge and research to
make a collection actually much more valuable to everyone while typically getting more
specific recognition for their work as ‘amateurs’.

The issue of open content is certainly here to stay, therefore also the need of the creative
industry (and other industries as well) to develop new ways of presenting service around and
on top of open content, if they don’t want to hit the wall. Or to put it the other way round:
The acceleration of the spread, popularity and intensity of Internet use will only speed up the
disruption of the established creative industries and their business models which rely on
copyright protection and licensing modeled after physical distribution and are supported by
mass market advertising. Significant disruption to established business models, however,
often has led to innovation; and accepting the disruption might well be the first step needed.
 Supporting Service Innovation Through Knowledge Management

!$.1#21.)%&2;6%

Embrace open content wholeheartedly. Don’t stay in denial of its potential

disruptive consequences. Use it as a springboard for innovation rather than seeing
it as a threat.

‘Connect with your fans’ (i.e. your customers) so you better understand them and
they better understand you. Develop services that align with your customers’
lives, needs, and activities. Make yourself and your services accessible, findable,
immediate.

Give them a ‘reason to buy’ by tailoring the services to what they really want and
that align it with their buying style. Be authentic, offer interpretation,
personalization, think of the right packaging and delivery.

Finally, continue to innovate your services.

@"A"$":1"6%

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4B#8'$%C2'/$.;83%

Peter Troxler develops and realizes trans- and interdisciplinary

work including and integrating arts, academia, media and public
involvement. He works as a Senior Project Manager at Waag
Society in Amsterdam, is president of UnBla.org and occasionally
takes management consultancy assignments in the area of cluster
management, strategy development and implementation, and
integrated management. Peter has worked in academia as a
researcher at ETH Zurich and as a research manager at the
University of Aberdeen. He holds a Dr. sc. techn. in Industrial
Management (PhD) and a MSc in Operations Management from
ETH Zurich, Switzerland.