Threshold pledge system
From Wikipedia, the free encyclopedia

The threshold pledge system is a way of making a fundraising pledge as a group of individuals, often involving charitable 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, keeping the donation in an escrow fund. When the threshold is reached, the contributions are retired from the escrow fund and a contract is formed so that the collective good is supplied. This system is often applied to creative works, both for financing new productions and for buying out existing works; in these cases, it's known as fund and release, ransom publishing model, or Street Performer Protocol (SPP).
Sometimes contributions are refunded to the donors if the threshold amount is not reached as of some expiration date, and no contract is signed: this variation is known as an assurance contract. Contributions to an assurance contract may also be collected as pledges which are only called-in when the threshold is reached.
When used to fund the creation of artistic works, the threshold pledge is quite dependent on the reputation of the artist, so that the artist is known for producing valued works and that the artist will live up to the terms of the contractual agreement. It therefore assumes that the artists will have built up this reputation by previously released works, such as previous chapters in a serial.
Contents [hide]
1 Street Performer Protocol
1.1 History
2 See also
3 References
4 Further reading
[edit]Street Performer Protocol

Street Performer Protocol is the origin of the threshold pledge system. SPP is the threshold pledge system encouraging the creation of creative works in the public domain or copylefted, described by the cryptographers John Kelsey and Bruce Schneier[1] (although the underlying idea is much older). This assumes that current forms of copyright 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 SPP, the artist announces that when the artist receives a certain amount of money in escrow, 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 only serve as an escrow agent and not care about the quality of the works (like a vanity press).
In software, source code escrow is a publishing model that applies the SPP to source code (often involving existing proprietary software) which is eventually released under an open source or free software license.
[edit]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.
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:..."[2]
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.[citation needed] Additionally, subscriptions were generally sold at a set price,[citation needed] though some wealthy subscribers may have given more in order to be a patron. In the modern SPP, 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.[3]
The Street Performer Protocol was successfully used to release the source code and brand name of the Blender 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 software software under the GNU General Public License. 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 the Rational Street Performer Protocol and the Wall Street Performer Protocol.
[edit]See also

Assurance contract
Contingency market
Copyright social conflict
Crowdfunding
PledgeBank - An honor system Fund and Release website
[edit]References

^ John Kelsey; Bruce Schneier. "The Street Performer Protocol" USENIX Press, The Third USENIX Workshop on Electronic Commerce Proceedings, November 1998.
^ Robert Philip , Sleeve Notes - Mozart: Piano Concertos 11 12 & 13; Susan Tomes (piano), The Gaudier Ensemble. Hyperion Records, Helios (2004).
^ Stephen Breyer, "The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies and Computer Programs", Harvard Law Review 84(2) 1970.