While the overriding driver for the Brain Candy team to start Runes of Gallidon was a passion for the concept of building a shared world collaboratively, we also acknowledged that at some point we would have to figure out how we could share revenue with Artisans. Ah, the wonderfully tricky, sticky issues with money and creative efforts!
The success of Gallidon rests on the interest and participation of the creative community, so we aimed to structure revenue sharing in a way that would be attractive for Artisans.
Since Artisans retain ownership of their Works even after they have been accepted and posted at Runes of Gallidon, the Artisans can still commercially market and sell their Works (our CC+ licensing includes a non-exclusive license from the Artisan to Brain Candy). This means both Artisans and Brain Candy can sell the Artisans’ Works.
So, there were two parts to the revenue question: (a) how much would Brain Candy share with Artisans if Brain Candy sold their Work, and (b) how much would Artisans be expected to give Brain Candy if they sold their own Work?
The other tricky part about this was that we were encouraging the creation of derivative Works, which would – by definition – include copyrighted materials owned by other Artisans. How could we construct a system of revenue sharing that could realistically and consistently deal with a Work that might have over a hundred Ideas from almost as many different Artisans?
We looked at lots of companies operating in the media space, including ones using CC+ licensing structures, to see what was being done about sharing revenue with Artisans. We found several models, and we kicked around a few internally to see how they “felt.”
Many companies were using a variation of sharing net profits (gross revenue – expenses) with Artisans, but it seemed too easy to game the expense numbers a la Hollywood (“Gee, I know you were promised 5 points of the profits, but wouldn’t you know, the movie somehow magically broke even, so there aren’t any profits to actually share with you…”).
Others were using a flat-fee approach, as is typical with work-for-hires and submissions to ezine and webzine fiction sites. The truth was, as a startup, we didn’t have tons of money to dangle in front of the creative community, so we rejected this idea.
We ended up using the following arrangement: 50/50 sharing of gross revenue if Brain Candy sold/licensed a specific Work, and, if the Artisan(s) who created the Work sold/licensed it, we would ask them to give 10% of their gross revenue to Brain Candy.
It was about as black and white (read: easy to understand) as we could make it, and we felt it helped keep things above-board. If Brain Candy decided to offer an Artisan’s novel as a publish-on-demand book, we would pay the setup expense and not deduct that from the share of revenue given to the Artisan. Likewise, we felt a 10% cut of the Artisan’s revenue (if they sold or licensed their own Work) was a reasonable request given that Brain Candy was maintaining and marketing the Runes of Gallidon site and project, which helped bring attention to the Artisan’s Work.
The really difficult decision about how to share revenue from sales/licensing of derivative Works ended up being one of necessity. We decided the only black and white, simple way to handle this was to share revenue on a Work basis, not an Idea basis. For example, John Smith writes a novel with a lead character named Milburn. Jane Davenport loves Milburn, and decides to write a series of short stories detailing Milburn’s history as a young man. Jane’s short stories are hugely successful, and Brain Candy decides to offer them as a collection (say, “The Milburn Chronicles”) available for sale in print. Revenue from sales of “The Milburn Chronicles” would be shared 50/50 with Jane. Only if John’s novel is sold or licensed by Brain Candy, would he receive any revenue sharing.
I will be the first to admit that this isn’t our preferred system, but it was the best we could come up with without creating a leviathan nightmare of paperwork, accounting, and legalese.
We do expect that John will ultimately benefit from his efforts to create Milburn as a result of Jane’s sales. As readers find and fall in love with the Milburn from Jane’s short stories, it’s likely they would find John’s novel as well. Thus, Jane’s sales would help boost awareness of John’s novel.
This kind of self-referencing marketing reinforcement resonated with us, and it felt like the right revenue sharing system given all the other possibilities.
Up Next: A New Post Series
Well, that covers the basics of how the Brain Candy team went about building what ultimately became the online world, Runes of Gallidon. I may post some updates or new developments in the future, but this is the last installment in this series for now. Look for a new post series exploring free content and shared I.P.!