Out of Control (CFIS Mar 2010)

Copenhagen Institute for Futures Studies
Instituttet for Fremtidsforskning

Report #1/2010
OUT OF
Control
New demand, new business opportunities
ANARCONOMY II
Content
Preface 6
The world according The anarconomic markets

to the network 8 of the future 36
There is no refuge when it comes to the logic We have been working closely together with a
of anarconomy. What can the enterprises do number of experts, who with their suggestions
in order to achieve an advantage in a market have been part of our visions. We show some
where the price is moving towards zero and essential statements about the future that we
where the means of production are being taken have used as a basis for this report. Together
over by self-regulating networks? with an overview of the business opportuni-
ties, this chapter is the entrance to the future
Will the industry die when the anarconomic markets.
products become digital? 18
We are looking at the next generation of Bibliography 51
businesses facing digitalization.
ABOUT THE COPENHAGEN INSTITUTE FOR FUTURES STUDIES
The Copenhagen Institute for Futures Studies (CIFS) is a private non-profit com-
pany. CIFS is organized as an association with a long list of member enterprises
and is neither affiliated to the university nor receives public grants. The overall
framework of CIFS is laid down by the executive committee.
The Copenhagen Institute for Futures Studies assists private and public enter-
prises in setting up options and moving towards a desirable future. We contrib-
ute with knowledge based inspiration and we analyze the tendencies and trends
shaping the future nationally and internationally. We offer advice about the future
by means of analyses, seminars, talks, courses, reports, and our magazine. The
institute has clients in a number of OECD countries, especially in the Danish,
Swedish, Norwegian and English markets.
The Copenhagen Institute for Futures Studies was founded in 1970 by the
former OECD secretary general, minister of finance and Professor Thorkil Kris-
tensen in cooperation with a number of visionary enterprises and organizations,
who had a desire to qualify their decision-making basis through thorough future
studies. The Copenhagen Institute for Futures Studies is among the largest of
its kind on a global scale and we are represented at conferences worldwide.
Visit The Copenhagen Institute for Futures Studies

at www.cifs.dk
CIFS REPORT # 1, 2010: OUT OF CONTROL
ELABORATED BY THE COPENHAGEN INSTITUTE FOR FUTURES STUDIES (CIFS)
EDITOR: CHRISTINE LIND DITLEVSEN PROJECT MANAGER: JACOB SUHR
THOMSEN AUTHORS: KLAUS Æ. MOGENSEN, KIM MØLLER-ELSHØJ, JACOB SUHR
THOMSEN, CECILIE BRØNDUM BOESEN, SARA JöNSSON, MATTHEW TANNER
RICHARDS PROOF READING : ELLEN MAURI LAYOUT: SIGRUN GUDBRANDS-
DOTTIR PRINT: ATM ARK TRYK
CIFS’S REPORTS ARE PUBLISHED FOUR TIMES A YEAR.

THE NEXT REPORT WILL BE PUBLISHED IN SEPTEMBER
THE COPENHAGEN INSTITUTE FOR FUTURES STUDIES,
COPENHAGEN, MARCH 2010
WWW.IFF.DK
ISBN 978-990458-7-7
EAN 9788799045877
Executive Summary
We are witnessing a rapid growth of free

content and services on the internet
and in the physical world. This content
is created and distributed by the users
themselves in voluntary, self-regulated
networks. These conditions, we have
described and diagnosed in our report
”Anarconomy” from 2009.
This report addresses the challenge of

how to make money in an anarconomic
market, because as several have pointed
out, “we can’t all make a living from cut-
ting each other’s hair”. Our answers can
be found in this report, which elaborates
on the ideas behind anarconomy, but
takes its starting point in how it is pos-
sible to create fruitful business models in
a market, where everything that can be
digitalized will be digitalized, where the
price of digital products moves towards
zero, and where everything is more or
less out of control.
The core elements are still that knowled-

ge and ideas as well as digital products
fundamentally have other characteristics
than physical products, however, we
also look at how the physical products
move towards digitalization. In addition,
we call attention to which characteristics
and services a business model in an
anarconomic market ought to include
and attach importance to showing where
things can be done differently in order to
give rise to better conditions for existence
in this new logic.
Rapport: UDE AF CONTROL / MAJ 2010 / www.iff.dk

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Report: out of CONTROL / www.CIfS.dk

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Foreword
Anarconomy and business
The word anarconomy may in a business context seem a bit contra-

dictory. Anarchism and economy – are they really able to go hand in
hand?
Our allegation is that the decentralized development, production and

distribution (mentioned in Report # 3 2009: Anarconomy), which we
already now see on the internet in combination with the users’ de-
mand for accessibility to low prices, will entail a digital landslide in a
long series of industries. It creates a market, which is opaque, accelera-
ting rapidly and strongly challenging for our present business models.
A market, which is out of control
In our first report on anarconomy, we described how the business

procedure and the ownership of our own products in certain lines of
business are under attack from networks with anarchistic characteri-
stics. We also described that services and contributions on the internet
in a long series of cases have become very cheap and in some cases for
free. It is especially evident when it comes to music, games and films.
In the immediate future, books and output of knowledge will join the
group. The tendency to us is to see everything that can be digitalized
will be digitalized and will move towards a price of zero. However, the
physical products will not remain unaffected – here you will also be
able to feel the influence of anarconomy.
This report is a diagnosis of which problems anarconomy gives busi-

ness life and an estimate at what is appropriate for the enterprises to
do in order to adapt to the anarconomic conditions. In other words,
we are describing how it is possible to make money and make sensible
business models in this anarconomic market.

We have during the creation of this report been in touch with enterpri-
ses, who are met with challenges related to anarconomy. These have
contributed to our ability to serve the anarconomic market conditions
of the future – both palatable and more epoch-making solutions to
how you succeed in the optimum way under these circumstances.
Our conclusion is in fact rather simple. We have to change our mind-
set – because our clients are in the process of doing it.
Thank you
This report has been made in collaboration with a series of business people,
experts and people with a special insight into business opportunities in an anarco-
nomic market. To them, we owe great thanks. They are Kim Møller-Elshøj from the
company Scuttlebutt, who spent a month at CIFS and openly shared his experi-
ence, network and insights. Søren Krogh Thompson from the recording company
Playground, Theis Bautrup from TDC Play, Morten Rosenmejer from the law firm
KromannReumert, Joakim Penti, free agent and media advisor at Syntese Media-
buying. All of the above mentioned participated in an intense expert panel at CIFS.
Additionally, we owe thanks to Jacob Bøtter from Soci, Martin Sønderlev from So-
cial Square and Søren Kristensen from Sony Music and Natasha Friis Saxberg from
Saxberg.dk, who participated in our future process on Google Wave.
Have a good read!
Jacob S. Thomsen, Project Manager
In the anarconomy spirit of freely sharing knowledge, we render

this report accessible under agreement with a license from Creative
Commons. For that reason, you are allowed to make copies and
render the work accessible to the public, however, you must credit
the work indicated by the holder of the intellectual property rights
and the issuer of the license and in the event that you alter, rewrite
or elaborate this work, you are only allowed to disperse the result
of the work using an identical license like the existing.

1
We are witnessing a rapid growth of free content, services and products, which are
created by the users themselves in voluntary, self-regulated networks. The price of
these products, services and contributions are heading towards zero, as these ser-
vices are digital. We call this phenomenon anarconomy. It is a challenge for existing
enterprises to find their footing within this new frame of logic. In the future, enterpri-
ses will have to take anarconomy seriously and in this report, we will tell you, how it is
actually possible to make money in an anarconomic market.
The
world
according
to the
Network
When will an enterprise be threatened by anarconomy? In our view,
there is no refuge. Neither, when it comes to lines of business nor
products/services. Therefore, it is crucial that the enterprise real-
izes what it can do in order to obtain an advantage in a market,
where the price is heading towards zero, and where the means of
production will be taken over by self-regulated networks.
In this, we are introducing a number of the most important ways to

offer the market contributions. Contributions for which there is a
demand, and are difficult for the self-regulated networks to offer. We
show how a network as an entity is strong in some contexts, weak in
others, and give examples of how the force of innovation can even be
entirely lost as the amount of data and the size of the network grow.
In 5 years, search engines such as Google will still be popular invol-

ving searches for the location of an enterprise using Google Maps for
example, to find a specific factual answer or find pages about specific
topics.
Parallel with the search engines, we can see an incipient change of be-
haviour. The internet becomes a medium for a personal, exclusive and

qualitative network (contrary to today where the majority of networks
are quantitative and inclusive) which is being used for evaluating and
answering questions about everything from heavy decisions about jobs
to light whims of new acquisitions during the shopping session. The
common denominator is that networks become qualitative and increa-
singly synchronous – i.e. the distance between question and answer
becomes shorter.
In the future, the clients will be needing new and innovative tools to
navigate between different types of information and data and to un-
derstand and relate to the actual context.
Here, there and everywhere
The computers’ calculation ability will continuously increase. Band-

width, especially mobile, continues its triumphal progress – Mobile
Broadband is among the best selling products at present. The progress
of the broadband entails better opportunities of compressing data.
The internet will continue to expand. The global internet access pene-
tration will continuously increase – especially via mobile networks. At
the same time, the relative price for getting on-line decreases, which is
why the number of new users – and in time more skillful users, who
understand how to use the high technological possibilities as part of
their every-day life – will continue to increase considerably. With more
enterprises and more diverse consumers online, the amount of content
will continue to increase immensely, simultaneously with being frag-
mented out into more and more niche spheres.
More and more of the content put online becomes advanced fusions of
images and sound, concurrently with the users becoming more skilled
and getting more advanced tools to produce and edit media produc-
tions themselves and finally, more and more location based services
will appear. This simply means that eventually as there is access to the
internet all over, and that we are constantly online via our mobile pho-
nes, we have the opportunity to receive up-dates on the surroundings
we pass – for example sales in the clothing store we are passing.
Thus, we will gradually be facing an increased complexity in every

way – a sort of hyper communication. Cultures, languages, discussion
topics, interest groups, networks within networks, virtual worlds, me-
Juniper Research: Mobile Location Services – Applications, forecasts and opportunities 2009-2014

tadata. They will all grow to almost boundless proportions.
There will be a demand for most of it, but how do we find the exact
thing we need in this inferno of possibilities?
I’m feeling lucky
To have your wishes and needs fulfilled in a world with infinite pos-
sibilities should be easy, but it may turn out to be much more difficult
than if you should just choose between a few things on a shelf.
It progressively becomes more complex for the users to find, what they
are looking for. In a market, where everything is accessible to a price
close to zero, the obvious cost is to adjust the time spent on finding
the right solution/correct services/ right experience – and to adjust the
risks associated with choosing wrongly. Time is a scanty factor and
therefore, it is necessary to find solutions that are better, so that the
client navigates to the correct place on the internet in his or her first
attempt.
Search engines such as Google will constantly become increasingly

efficient and they will continuously be used for finding certain things,
especially for data characterized by a certain degree of objectivity. For
instance, to locate a business via Google Maps, to find answers to a
specific, factual question or find pages dealing with a specific, concrete
topic.
Google is not yet good enough when it comes to including synchro-

nism and contextual relevance in its searches. Semantic analysis, stati-
stics and mathematical network analysis will however assist in making
the searches even more accurate.
What people will do is to increasingly make use of their (virtual) net-

works to navigate in these quantities of information. By asking their
friends on Facebook, the contacts on Twitter or the readers of the blog,
they get an entirely different qualified response to their enquiry. Their
friends, colleagues, business contacts and clients can relate to a more
complex and subjective enquiry than for example Google Search can.
There are tiny signs that firstmovers are already doing this today – and
it will not be long before it becomes quite common to ask your virtual
circle of acquaintances for help and answers instead of visiting Google.
com. The way the clients use and develop their personal network in
10 Report: out of CONTROL / www.CIfS.dk

the social services will change. They become a) more qualitative b)
more exclusive and c) used more actively to make choices and decisi-
ons relating to consumption, relations and life in general. So as a repla-
cement for the very quantitative and usually rather “empty” connec-
tions that are characteristic of the social media at the commencement
of the 2010’s.
However, the method still has its limitations. For instance, if you today
ask your network on Facebook for advice about whiskey, only a tiny
percentage will be interested and an even smaller part would be able
to answer the question . But the whole network is still forced to see the

wall post or the Tweet.
The possibility to target your micro blogging towards specific seg-

ments in your online network is still limited today. This is tantamount
to a lot of noise (irrelevant information) and watering down the value
of the network. For that reason, there will be an increasing require-
ment for segmentation of your online networks.
The big question is in seeing through, how the private consumer seg-
ments his or her online networks. This is dependent on both multiple
contexts and identities. An example of division of an individual’s grou-
ping of contacts in the network would look like this:
Social – Professional
Private – Public
Sphere of interest:
spare time, sports, hobby, subjects, studies, religion, spirituality
Life phase affiliation

Useful to my goals – Obstructing my goals
For that reason, there’s an important business opportunity in analy-

zing and understanding the development that the internet, and the-
reby also the precondition for anarconomy, is going through in years
to come.
See more elaborate article on quality in networks can be found at www.saxberg.dk
Rapport: UDE AF CONTROL / MAJ 2010 / www.iff.dk 11

The fusion of the computer’s and the human beings’ abilities is where
the biggest potential for fast, exact procurement of really relevant
knowledge in real-time is. That is, technical solutions uniting many
people’s simultaneous cognitive capacity with the computer’s objec-
tivity, calculation force and ability to learn from the parallel behaviour
of more people.
This can both conclude in solutions resembling artificial intelligence

or in a Web 3.0 also known as The Semantic Web. The Semantic Web
will facilitate navigating in data, because Web 3.0 will contain far more
metadata. Metadata are data that describe other data and seeing that it
is standardized, computers are able to understand it and thereby able
to find just what is being searched more easily. The difference between
searching for data and only data and searching through metadata is: If
you start a search for the term “single” today, you will find places/sites,
which mention single parts and places/sites, which mention people,
who do not have a boyfriend or girlfriend.
The success of the Semantic Web is dependent, however, on whether

we humans create these metadata, which is one of the critic’s major
hobbyhorses with reference to the enormous scale of the internet.
In the future, success will belong to those most adept in finding their
way, and for enterprises it is especially about making sense in a rea-
lity, that looks like an information chaos. The complexity in our world
has become so high that we no longer can grasp the proportions. The
same action can have different outcomes, as the context is constantly
changing.
As a consequence of this, efficient operation of an enterprise should

take place in real-time. The knowledge that we collected yesterday and
understood today, we should act on tomorrow - otherwise it may be too
late, due to the fact that the conditions will have changed.
Enterprises are telling the stories about themselves, but by degrees, the
story about an enterprise is also to a large extent being told by the sur-
rounding world of the business. In this, there is an immense source of
knowledge. Thousands of fragments of conversations – from a quick
story on Twitter - to the blog of a management guru - to the news on
FT.com. The entire context can be transformed into implementable
knowledge. To be able to transform such knowledge into action in a
near real-time will be a precondition for acting successfully in a market
influenced by Anarconomy.

Stupidity of Crowds
Seeing that the clients increasingly want influence on coming products

and services, and the possibilities on the internet have been intermi-
nable the past five years, it has been good business practice to demand
business solutions in the vast user network accessible to the enter-
prises daring to open up. It has advantages and disadvantages, and it
is important to be attentive to the fact that there are built-in traps in
uncritical user involvement. James Surowiecki describes in his book
”Wisdom of Crowds” both the preconditions and the obstacles to achie-
ving ”a wise crowd”.
In order to create a wise or smart group of people, the following crite-

ria must be fulfilled:
Diverse attitudes: Every individual ought to possess personal

knowledge about the topic, also even though they are just eccentric
interpretations of facts.
Independence: People’s attitudes shouldn’t be affected by

people around them
Decentralization: People can specialize themselves and make

use of their local knowledge.
Aggregation: A suitable method for aggregating people’s per-

sonal evaluations for a joint collective decision.
When all these four criteria are fulfilled, there are the optimum condi-
tions for achieving Wisdom of Crowds. The opposite may also be the
case. If it is attempted to create an outcome of collective intelligence
under the following conditions, you may end up with ”Stupidity of
Crowds”, where the solution becomes more inferior than what the
single individual might have done itself or ”Mediocrity of Crowds”,
where the solution limits itself to what the members of the group can
agree on.
Not surprisingly, it is opposite to the above mentioned conditions that

increase the risk of the group becoming more stupid than the single
individual.

Homogeneity: Diversity is necessary for the presence of enough
variance in the approach to the problem solving, thought processes and
personal knowledge.
Imitation: When it’s possible to see the choices of the other

members of the group, it is in fact only the first few, who will (be able to)
make free choices. The rest will make their choice based on and around
these (because of the understood lesser risk of the choice), because it’s
worth their while.
Centralization: A hierarchically organized organization that may

err, if it isn’t open to input from the lowest levels in the organization. Surow-
iecki is referring to the Columbia spacecraft catastrophe.
Division: Silo thinking, and that some people have an exclusive

right to certain information. If the free flow of information is obstructed,
the group itself doesn’t have the opportunity to decide, what they want
to work with, how and what information they need. Their performance
will thus be suboptimal.
Feelings: Emotional factors such as the feeling of solidarity can lead

to a herd conduct or group pressure and in extreme cases mass hysteria.
However, it is argued that even though all of Surowiecki’s precondi-

tions are met, then it is not certain that the group can perform better
than what, for example, an expert individual can. In 1999, the chess
player Kasparov played a game of chess on the internet against 10.000
players all over the world, and he won. Every draw was decided by
majority vote, but not even the whole world could beat Kasparov, who
admits, however, that he had never had to make such a supreme effort
as he had to in this game, which he calls the “chess game beyond all
chess games”.
Infinite alternatives slow down innovation
If you ask people what they want, they are only able to reply accor-
ding to what they know in advance. The needs that are not realized or
unfulfilled, most clients have trouble in expressing. All the problems
occur when the clients have to relate to the future . It has a number of

interesting consequences, when it comes to how enterprises should do

business in the future.
See Member report #2 2009, Futuredriven innovation

When the alternatives become too many, the force of innovation
drops. Andrew Keen, who has written Cult of the Amateur, refers to
the theorem of T.H. Huxley that states that if a troop of monkeys are
equipped with typewriters and an infinite supply of paper and time,
one of them will at some point write a comedy worthy of Shakespeare.
To clients, who are facing interminable options, it is a challenge to

navigate and choose between these many possibilities. If we presup-
pose that the monetary cost of every single choice is heading towards
zero, the only cost to the client is the time he or she has to invest in
finding and consuming the article or services in question – a cost that
the person will also attempt to minimize, see the ideas regarding the
future currency being that of attention and that time permanently will
be considered to be a luxury.
In several western countries, ”pay-per-view” TV is increasingly gaining

a footing. The form may vary, but the idea is that a permanent amount
is being paid every month for an unlimited choice between broadcasts
and films from all over the world, then the cost per “show” will head
towards zero, the more you watch. By downloading and watching
pirate copies from the internet, you can avoid the subscription costs,
but on the other hand, you have to spend more time on finding your
“show“, a “healthy file” (i.e. a well-functioning and without malware),
to download this and potentially to convert the file or special software
before it can be viewed. No matter what, the point here is that the rela-
tive monetary cost will be insignificant.
It leads to the question of time and the risks, a person would associate
with it like in this example to watch a specific TV programme. Seeing
that time is scarce, people would like to avoid spending it wrongly.
Time wasted on finding a film, which wasn’t really worth watching
could probably have been spent differently and better by doing so-
mething else (said with an economic term: “offer cost”). Seeing that
people want to avoid such offer costs, they will increasingly attempt to
make “safe choices”.
This will entail a series of challenges especially to the entertainment

business, the arts and the publishing business. The contrast to ”pay-
per-view” is called ”flow TV”; where the TV station decides a flow
of programmes for each day. What if flow-TV didn’t exist? What if
the viewer himself or herself had to choose everything that he or she
wanted to watch?

Today, TV viewers find inspiration to what they want to watch from
for example the TV pages in their newspaper, from TV guides on
the internet or via spots on TV, which advertise for TV program-
mes. However, it is not all TV watching, which is planned. People sit
down in front of the TV and “flick” around. With the remote control,
you “flick” through various “flows” of TV shows. When people flick
through their channels, it sometimes happens that they end up watch-
ing a TV programme that they normally wouldn’t have chosen to
watch, if their TV watching had been planned. This could for instance
have been “narrow” documentaries, person profile programs or films.
This wouldn’t be possible if flow- TV didn’t exist.
Therefore, if we still presuppose that many TV viewers will attempt to

make safe choices, what would they then choose, if there were no flow
TV, but they were free to pick and choose between all available? You
could imagine that they would especially choose the programs they
already knew about in order to minimize the risk of wasting their time
on something uninteresting. Would they then continue to watch re-
runs of ”Friends” for another ten years to come or would films get even
more sequels (Terminator 5, 6, 7, 8)? How do new programs, small
feature films and narrow documentaries then create an audience? Put
against “choosing freely between almost infinite possibilities”, the TV
viewer will probably not choose this type of show in preference to
known shows or brands, where the understood risk of the offer costs is
lower.
This example of how our behaviour may change in the future, when it
comes to watching TV is used here, seeing that few people and enter-
prises have yet to consider these consequences, but when it comes to
music and books among others, this is already a challenge.
The eternal sequel
If people would just demand more of what they already know to a

higher degree, what would then be the innovative motivation of the
”makers”? How will a new artist or a new author then get his or her
breakthrough? Especially, if you can’t expect to get economies of scale
by selling your music or books for example, because everything exists
in a digital form, and is more or less for free. The obvious answer
would be (massive) marketing, but how would this be financed? Few
would risk the investment, if the possibilities of profit are tied to the
earnings of the live performances of the artist or the author’s talks and

book signings and prevented from the economies of scale like being
able to sell thousands of the same printed publication like we know it
today.
If the market only demands what we are already aware of, what our
friends know about or things that more or less corresponds to that,
then the makers will only be motivated towards very incremental in-
novation.
In this world of ”more of the same”, new TV shows, new names of

artists and new authors will be more difficult to establish and find big
audiences for. In return, one will fight to have yield on one’s initial in-
vestment for as long as possible. Popular authors will use more “ghost
writers” in order to be able to produce more and faster. Musicians will
to a larger degree aim at producing hits, and movies for the cinema
will have more and more sequels, and in all these contexts, prerequi-
sites will be an increasingly important source of income. A couple of
current examples of this could be Disney’s Pirates of the Caribbean
where sequel number 3 is being produced, the eternal flow of James
Bond movies and Toy Story 3.

2
We are witnessing a rapid growth of free content, services and products,
which are created by the users themselves in voluntary, self-regulated
networks. The price of these products, services and contributions are
heading towards zero, as these services are digital. We call this phen-
omenon anarconomy. It is a challenge for existing enterprises to find
their footing within this new frame of logic. In the future, enterprises will
have to take anarconomy seriously and in this report, we will tell you,
how it is actually possible to make money in an anarconomic market.
Will the industry die

when the products
become digital?
Anarconomy will change the way in which your company makes

money. Products that can become digital, will become digital, and
products which become digital are heading towards a price of 0.
When a market becomes digital, the products will be subjects to a
specific logic concerning supply and demand. At the same time, we
are witnessing that selfregulating networks to an increasing degree
are influencing the production of physical products, so that pricing
in the physical world as well is put under pressure. Furthermore,
it has been a painful experience from the past 10 years that when
an industry becomes digital, its economy is destroyed and altered
beyond recognition.
We have seen it with music and movies – now the time has come for
books. The corpus of knowledge, art, science and literature, which,
since Gutenberg’s first bible, has continuously multiplied itself. Many
shake their heads and say that a book is something totally special but
this was also the case when music went from vinyl to CD and on to the
internet. All of a sudden, the industry was changed due to a desperate
attempt of trying to uphold and maintain the same logic as in the busi-
ness model, which had proved itself successful for a long time.

The same thing could happen with the printed words, because the
technology and the anarconomic logic is about to catch up with the in-
dustry. Mark Twain once said: “It ain’t what you don’t know that gets
you into trouble. It’s what you know for sure that just ain’t so”. This is
to a vast extent an expression that not only the book industry should
pay attention to, now that it is under digital fire. We all need to be
aware that our industry, our product and our bread and butter all of a
sudden will be digitalized in five to ten years, even though it may seem
improbable and not feasible at the moment. Some industries ought
to already have an eye on the time horizon, because open source and
self-regulated networks affect businesses and products, which aren’t
necessarily the obvious ones, when we’re talking about digitalization
and becoming subjects to anarconomy.
Open source on the physical market
We best know open source from the world of software where all kinds
of program packages are made available for use and further develop-
ment. A growing tendency is that open source is spreading to also
include physical products, whose design and production data are made
available for free. This is called open source hardware .
In the simplest version of open source hardware design is being made

public, so the users can make their own copies. This is the case for
RepRap and Fab@Home for example, which are both simple 3D prin-
ters, which you can build yourself from commonly accessible compo-
nents. This form of open source hardware requires that the user him-
self or herself gets a hold of the components and builds the product,
something, which is quite more complicated and time consuming than
just installing open source software. It would be considerably easier if
you could just press a button and have the product made while leaning
back and drinking your tea. Fortunately, this is possible with 3D prin-
ters and other types of flexible automatic production equipment.
Both RepRap and Fab@Home are connected with libraries of open

source designs that are possible to download and print if you have
the right type of printer. In this case, it only costs the price of the raw
materials it’s made from to make a physical product (typically silicone)
and a little electricity.
3D printers such as RepRap and Fab@Home are just an example of

http://en.wikipedia.org/wiki/Open_source_hardware
www.reprap.org
www.fabathome.org
automated, flexible production equipment on a smaller scale albeit
the most flexible kind among other things because the technology can
be used with many different materials: plastic, cement, molten glass,
paper pulp, chocolate etc. The most advanced can even print electro-
nic circuits of organic polymer – a method that is used for making the
insides of the electronic book reader Que from Plastic Logic .
Digital moulding and milling machines as well as digital turning

lathes can be used for cutting three dimensional products out from

blocks of materials like metal, wood and hard plastic. The products are
more limited in their elaboration than for example 3D printers – for in-
stance, you are not able to make hollow objects – but they are typically
more solid, because they are cut from one piece. Other examples are di-
gital looms and sewing machines that can weave or embroider patterns
in fabric based on digital designs . Both fully automatic digital looms
10
exist, typically for industrial use and digital auxiliaries for handlooms.
Advanced digital sewing machines are equipped with a screen and
with the possibility of downloading, editing and saving patterns.
Print-on-demand technology makes it possible to make your own

books, although the machines for it nowadays are too big and expensi-
ve for hobby use (an Espresso Book Machine costs $75.000 and up ). 11
On the other hand, it has become cheap to have small issues of books
printed with just one issue via print-on demand services like Lulu.
com . Many books are in addition made accessible as free PDF-files (i.e.
12
via a Creative Commons license), which you can print yourself.
The development of flexible, automated, desktop production equip-

ment has other consequences than just enabling open source hard-
ware. This means among other things that an increasing part of the
physical production will be taking place decentrally, at or close to the
final user and that an increasing number of products will not be produ-
ced before there is a need for them. This entails a significant saving of
resources, especially transport, storing and possible destruction of pro-
ducts for which there are no clients. For instance, it has been estimated
that every fourth book never gets sold and that each year around three
billion magazines and newspapers are being delivered to newsstands/
kiosks etc. without them getting sold. Print-on-demand equipment in 13
bookstores and kiosks may therefore reduce waste quite considerably.
http://en.wikipedia.org/wiki/Plastic_Logic
http://en.wikipedia.org/wiki/Milling_machine
See for example www.camillavalleyfarm.com/weave/weavebird.htm
10 See for example www.brother-usa.com/Homesewing/Quattro
11 http://en.wikipedia.org/wiki/Espresso_Book_Machine
12 www.lulu.com
13 www.tinyurl.dk/14022
The access to automated, flexible production equipment – whether you
own it yourself or buy into a service like Lulu.com or the more versa-
tile Ponoko , which has several of the above-mentioned types of machi-
14
nes at its disposal – opens up to a growth in small businesses, typically

run by a single person or a few that sell products of one or the other
kind. It can be everything from authors publishing their own books to
artists, who make small series of jewelry, art wares etc. The internet
makes it possible to get in touch with a potentially large number of
clients, among others via different portals. If for instance, you let Lulu.
com print a book, the company makes sure that the book gets a profile
on Amazon on equal terms with books from large publishing houses.
This creates a fertile soil for an undergrowth of micro-entrepreneurs,
who evade the traditional channels of distribution and sell directly to
their clients without having to worry about getting access to expensive
production and distribution facilities.
This means that there will be other demands for the products and for
the means of production. You could say that many consumers want a
product, which is good enough – a sort of good enough trend that is
about the product being useful and work according to the intention,
but that more profound design technical details have shortcomings
within this type of production.
Yet another consequence of the development is that it enables the copy-

ing of physical products and thereby challenges the rights to design and
trade-marks. 3D printers can copy Lego bricks and other plastic toys and
digital looms can copy fashion clothes from the expensive manufactu-
rers. As the technology develops in terms of quality and range of materi-
als, more physical products will continuously be able to be copied to an
extent that makes it difficult to distinguish copies form originals.
If anarconomy is the answer, then what is the question?
On what basis should we create our future business, when we look ten
years into the future? Or just five years? A good image of the develop-
ment is to think about, how the digitalization of large parts of the
entertainment business has created a landslide in the business founda-
tion and the earning prospects.
Recent studies have shown that we aren’t facing a complete break-

down of music sales – but that we’re facing an extensive change of the
14 www.ponoko.com

market. The change consists of the business as a whole making more
money than ever before (also before the internet and the pirates appea-
red), but that the proceeds from the record companies are descending,
while the earnings from concerts are ascending. The following philoso-
phy supports this:
Anything that can be digitalized will be digitalized

– and anything digital will head towards the price of zero.
This sentence can create a lot of problems for traditional enterpri-

ses and for traditional organizational structures. Because we are not
exactly able to predict what will be digital and what will not, we have
to assume that the best division is to distinguish between unique
experiences (such as for example concerts) and digitalized content like
for instance music recordings. The possibilities of creating a digital
content are many – what would you think of printing your own house
for example? The sentence also represents a lot of opportunities. Like
the opportunity to create a decisive edge compared to the traditionally
bound enterprises.
If we cannot predict exactly which products will be subjected to digita-
lization, we can, however, look at what gives your company an ad-
vantage in five to ten years. Therefore, we look at what you can make
money on in five to ten years in an anarconomic market.
Let go of the control
The precondition for making money is – quite obviously – to offer a

product that the users are in fact ready to pay money for. It becomes
a bigger and bigger challenge as the price of your products is heading
towards zero. Take the media and newspapers as an example. During
the recent five years, we have become accustomed to the daily news
being for free and updated faster than the analogous edition of the
newspapers.
Now, more media enterprises get a scent of change due to the tech-
nological development of for example e-readers – the electronic, flat
and mobile reading units offered by among others Barnes and Noble
(NOOK), Apple (Ipad), Sony, (Sony E-reader) and Amazon (Kindle).
The calculation is now that news is something that the user should pay
for, seeing that the electronic reading units make the media capable of
controlling the market.

Such a development cannot be refused, but we would like to maintain
that the users are now so used to the present situation that it will be
a tough struggle. Moreover, we are convinced that the earnings – or
the price of the product – continuously will head towards zero, when
we are talking about digital content. Therefore, the earnings may not
necessarily become extinct, but if we take the experience from the mu-
sic business seriously, then the media enterprises may be comparable
with exactly the events that took place almost ten years ago.
The media enterprises could and should take the painful experience
that the whole industry learned seriously. It seems that the publishing
firms are doing their bit to maintain the control of the market by
fighting for controlling the price by keeping it high. In a traditional
business perspective, it is rather sensible – in the new anarconomic
perspective, it is a desperate move, because the price of a digital pro-
duct is heading towards zero.
This, we will pay for in the future
Just like today, luxury will in the future be characterized by scarcity.

Whatever society has a hard time getting, will be considered a luxury.
Two things that will probably be scarce for even more people will be
time and privacy. A consequence of this, which can be interesting to
make a note of, is the possibility of a new class division of the society.
Imagine a society, where money is not solely decisive for which class
you belong to, or the only standard of a rich life.
Already today, celebrities pay a high price for their fame. They expe-
rience a trade-off, where fame (and often the money) means that they
are constantly in the spotlight of the public and thereby lose their pri-
vacy. Is it imaginable that our opinion of riches changed or had more
facets, and that people started to see the ones with more (spare) time
and privacy as being the rich ones? And if the alternative is money,
how do you attach a monetary value to spare time and privacy?
We know that the western societies have never been as monitored as

they are at present and that they with all probability will be monito-
red even more in five to ten years. It can be expressed with the theory
of Michael Goldhaber regarding the attention economy: “The ones
who are after your attention can’t choose to pay you money for it, but
have to offer more – they have to be interesting to you. Ergo offer an
illusory attention in the approximate same amount that they would
have to if you paid money to listen to them”.

Accessibility. Navigation. Security
Or like Herbert Simon states: “...in an information-rich world, the
wealth of information means a dearth of something else: a scarcity of
whatever it is that information consumes. What information consumes
is rather obvious: it consumes the attention of its recipients”.
Therefore, an abundance of information will create a scarcity of at-

tention and a need for allocating the attention efficiently between the
abundance of information sources that can consume it. With all the
communication going on between users, between users and enterpri-
ses in the shape of advertising both in the physical space as well as on
the internet, it becomes more evident that there are business opportu-
nities in offering:
Accessibility Even though music, books and films can be

found for free on the internet, the enterprise can make money on
making these data more easily accessible. If everything can be found
in one place for instance, instead of having to search more places for
different things, then many clients will be willing to pay for this incre-
ased convenience. This is closely related to the following point.
Navigation In a market, where everything is accessible at a

price of zero, the only cost left is to minimize the time that the consu-
mer/the company has to spend on finding the correct solution/right
services/right experience. Time is for most a scarce factor and often a
lot of (spare) time is a luxury, which is why the incentive to minimize
the time spent on finding what you are looking for, could be rather big.
Therefore, in the future, enterprises would be able to build businesses

around navigating in knowledge and information for consumers and
enterprises. In other words, in the future you will to larger extent pay
money to be shown the direct path to the correct solution, because you
thereby save time.
A contemporary example is the music store iTunes. Here, the consu-

mer gladly pays for the music, which they would otherwise be able
to find for free online, because it is convenient that almost all music
can be found through it. In various ways, iTunes is showing the way
(for example with the aid of Genius) for exactly the type of music that
could be of interest to the individual user.
Seen from the perspective of an enterprise, a relevant example could

be an online solution, which could assist in finding the right sub sup-
plier. In many enterprises, buying raw materials and services is often
very time-consuming – and thereby cost heavy tasks. Would it be
possible to reduce this process by the aid of an online first evaluation
and consistency. “Good enough”.
of potential suppliers, then many enterprises would be willing to pay
for this service, because it would save them a lot of man-hours. This
example also works vice versa and can be used to find the right client.
See more at www.getfriday.com
Security and consistency Another thing, people

would be willing to pay for, is security. This can also be exemplified by
the iTunes store. The consumer can choose if he/she wants to down-
load songs in a relatively high quality (for example 384 kbps), that
takes up relatively much space, or in a poorer quality (for example
128 kbps), which takes up significantly less space. No matter whether
he/she chooses one or the other, he/she can be certain that he/she has a
supplier, who can deliver in the same consistent quality each time.
If instead a consumer chooses to download his/her music from a pirate

service, the quality will often vary a lot and the risk of “malware” is signi-
ficantly higher. The consumers will be willing to pay to avoid these risks,
for instance, in the shape of micropayment or via subscription solutions.
Good enough Often, data on the internet are compressed

due to limitations in processor power, storage capacity and bandwidth.
Some will for some services put up with highly compressed services
- and thereby modest quality. These will i.e. either remain for free or
very cheap. The example here is pirate copies of films and TV shows
put on i.e. YouTube in bits and low resolution. Or the fact that many
use their mobile phone to take photos, even though the quality on
most camera phones is poorer than on a real camera. Here, we’re back
at the accessibility – a mobile phone, you carry all the time, when the
“Kodak moment” arises.
On the other hand, there are people, who are willing to pay for a sublime
quality like i.e. in the USA, where you can rent films and programs in a
higher resolution via iTunes or pay a modest extra price in order to get
the music in a slightly better quality. Finally, there are those, who when
it comes to music want the best quality and who buy their music via
websites offering a high resolution uncompressed format – so that the
sound is equally as good as when the song was recorded in the studio.
This not only applies to music, but also other products i.e. knowledge,
where the good enough product is an executive summary, an alter-
native to reading an entire report, photo, where low solution is good
enough and thereby cheaper than high resolution and video, where
YouTube is enough once in a while – but full HD is chosen, when the
image is what is important.

Bad Apple,
naughty Google –
and the poor publishers
Everything that can be digitalized will be digitalized. The anarco-
nomic economy is putting pressure on enterprises, especially the
media business. To begin with, it was music and films and now
books are on.
The big players such as Google and Apple, who are dominating today,
are competing for digital market shares. At present, Google is even
fighting national states. The two giants have begun to imitate each
other. First, Google made the Android operating system for mobile
phones – followed shortly by the launch of Apple’s iPhone and most
recently, Google has launched the mobile phone Nexus One, which
has made the company enter the hardware market and has increased
the fight for smart phones . 15
Google and Apple are both innovative companies, but have very dif-
ferent innovation and business methods.
Google is aiming at open source, freely accessible programs and “do

everything for free”. Mail programs, maps, navigation, calendar, office
programs, chat, virtual cooperation and maybe soon also books. All the
while, Apple is being more restrictive and controlling when it comes
to the company’s products and brand, but is making business models
from market trends before everyone else. iTunes, ipod, iPhone, app-
stores and now ipad . 16
According to Peter Burrows from Business Week, it’s a struggle bet-

ween open world and tight control: Google is an advocate of free and
open internet standards, where programs should be able to function
on all platforms. The more, the better, is their rhetoric, - well as long as
the new platforms and websites allow Google to sell online advertising.
Here, Apple has a different model. The company guards its team of
software developers and meets competition by carrying out a strict
15 http://www.businessweek.com/magazine/content/10_04/b4164028483414.htm
16 http://www.businessweek.com/technology/content/aug2009/tc2009084_007016.htm

control on which software that can be applied to their products – i.e.
Apple blocked some of Google’s applications on iphone.
However, Google og Apple do not just compete with each other, they
are also a big threat to i.e. other mobile companies in the smartphone
area and now also in the publishing industry. The anarchist develop-
ment that has already changed the music and film business has reac-
hed the e-book publishing business.
The digitalization of the publishing business
The behaviour of the giants on the digital market has immense conse-
quences for smaller companies. Google, Apple and the big publishing
firms are thus currently competing in order to ensure market shares on
the digital book market. The book industry is heading towards incre-
ased digitalization and here Google can exploit its big client foundation
to secure dominance and Apple has been prompt to make a competitor
to Kindle; the new ipad.
This puts pressure on the publishing firms, and in the end on the small
local bookshop, which faces a struggle for pricing and risks losing
control to the big players such as Amazon, Google and Apple. Apple is
launching iBookstore at the same time as ipad being introduced to the
market, and Google is also working on an e-bookstore.
The publishing business’ optimum growth opportunity is probably

also within the sale of digital books, and its future depends on the abi-
lity of the business to quickly develop new business models.
So what measures can the publishing firms take to keep up with the
development and competition in electronic literature? They can at-
tempt to use their experience from the music industry – whose finan-
cial position was put under pressure and has changed the conditions
of the record company business, when music piracy took off. Those,
who have had success, are especially enterprises that have adopted
new business models and offer alternative solutions to the consumers.
Apple sells one song at a time on iTunes, which put pressure on the
record companies’ traditional business model, whose smallest product
unit is an entire album.
The question is, however, if this could be applied to books. John Ma-
kinson, managing director of the publishing firm Penguin, believes
for instance that the consumers will not make do with one chapter at

a time, whereas people today are content to download just one song
from a CD. Consumers will not be able to upload their physical books
to their digital libraries either in the same way as you can nowadays
easily transfer your physical CDs to iTunes.
Price control
Another suggestion is to compete via the pricing. This was for example
the case recently, when the publishing firm, Macmillian required from
Amazon that they would be allowed to set their own e-book prices. So
far Amazon has been dominant on the market and has dictated the
pricing, because they sold the e-books with a loss ($9.99 for most Ame-
rican titles) to tempt the consumers to use Amazon. You could even
only read these books on Amazon’s own e-book reader, Kindle, which
has pinned down the consumers and taken the control away from the
publishing firms. The publishing firms, among these Macmillian, have
wanted to increase the prices on e-books, so they would make more
money, when the sale of e-books augments and at the same time puts a
curb on the decline of the sale of printed books.
Apple was here in the forefront compared to Amazon, when it in

connection with the launch of their new iPad and iBookstore adopted
the so-called “agency model” that allows the publishing firms to have
an influence on the pricing . This added pressure on Amazon and the
17
conflict between Macmillian and Amazon has now resulted in the

publishing firms having more say in the decisions of the pricing of
Amazon’s e-books.
The publishing firms are with the higher prices on e-books attempting
to both build a sustainable, future ensured business model, where
the publishing firm determines the price continuously, and at the
same time postpones the growth of the digital book market as long as
possible. This strategy is also an attempt to curb the sale of the phy-
sical books, and is based on the publishing firms’ traditional business
model, which they are used to navigating within. The book industry
should do two things at the same time according to Tom Allen from
Association of American Publishers: “They have to continue to price
books in the traditional format, and they have to adapt to a rapidly
changing digital world. ” 18
17 Http://www.technologyreview.com/computing/24443
18 Tom Allen quoted David Gelles and Andrew Egdecliff-Johnson, Financial Times http://www.ft.com/
cms/s/0/1aca5734-14fe-11df-ad58-00144feab49a.html

Illustration from http://neoformix.com/Projects/TwitterSpectrum/TwitterSpectrum.html
max
porn
eat
hand sorry images
love computer make #google
shareholders adwords
mac free education innovative send
blog
huh touchcamera cash company
radio
world best tools
math store beats money
facebook
real net
billion retweet press
buzz type
follow check
google
low
time
clock news daily
forget
apple
know
bold
app jobs
ipod
book
via
tech new pc
labs rss
android
home
mao
ipad
hot key become
great
internet fact
chat
bad
pro iphone missing
allowsbrand
cheap
com turn
clean
pay imedia
post bbc
fan
win today
airport
gmail facts
wall video reader vipps
ceo watch search
hawk
product off wave
generation source #buzz
mini others
The question, however, is whether the traditional method of pricing

is the path that the publishers should follow, seeing that this strategy
may also have disadvantages. On one hand, the publishers will make
less money on the sale of e-books, seeing that fewer will buy them,
when the price goes up: ”We will make less money on the sale of e-
books, but we will have a stable and rational market,” John Sargent,
the managing director of the publishing firm Macmillian, wrote in an
open letter to the employees of the company.
The book industry is heading towards a painful transition that the

music and film industry have already experienced, because like Steve
Haber, president of Sony’s e-book unit says: “once you go digital you
don’t go back (…) Once digital cameras were available, film did not re-
emerge”.
A new strategy for the enterprises and the publishing firms

The different business models of the giants and their struggle for
market shares are pressuring smaller businesses. Google and Apple are
both very innovative enterprises, but have very different innovation
methods. Google prefers to employ cloud computing and open soft-
ware so the users can access their files and data everywhere, whereas

Apple wants to sell elegant high quality machines that individuals
themselves have in their hand – and that have their own specific soft-
ware.
The two companies are in each their way competing for the market
share in the growing market for digital books. The question is whether
this competition will accelerate the innovation – by for instance
making Apple and Google develop new things and services even
faster – and thereby benefit the consumers – or if the two companies’
strength and increasing market shares will be detrimental to the sup-
ply and price competition on the market.
Because what are the smaller and traditional companies going to do,
when the giants take off? Should they try to maintain their old busi-
ness models and increase the price or should they lower the price and
make new business models that follow the consumer demands for
open, inexpensive and accessible services and products? And what can
the publishing firms learn from the development of the music busi-
ness?
So far, the big publishing firms have the advantage of having a good
contact to the small local bookshop as distributor and conveyer to the
clients – but it is uncertain what will happen with this connection if
the books are digitalized.
So what happens when everything that can be digitalized will be digi-

talized and thereby for free, when companies with traditional business
models are being put under pressure from the development and the
demands of the consumers? Are they going to increase the prices and
try to maintain their way of doing things – or will they be developing
new models and business strategies allowing them to sell via other
channels and in other formats, however often at a lower price – which
necessitates development of new solutions and products for them to
make money on?
The reaction, response and adaptability of the enterprises are crucial

when it comes to their continuous survival and earnings.

Why prices go towards 0
P(dev) > 0 and P(dis) > 0 and P(prod) > 0 => P 0 *
When the price of digital goods goes towards zero, it is time to
address the question of why we use a monetary system. People
don’t ask this question very often because it’s the system that they
and their parents were born into. However, the fact is that money
in its current form has been around for less than 300 years, while
homo sapiens been around for about 250,000 years. Money – more
accurately, commerce – is still very much evolving. The perpetual
booms and busts we know and regrettably accept as a fact of life
stem directly from our use of what we call centrally created money
– a system that increasingly seems outdated or even broken. If this
system is broken, then how do we fix it?
All banks today function on what’s called the fractional reserve sy-
stem . This means that when a bank gets a deposit, it can lend many
19
times the amount that was deposited. In the United States, banks are
allowed to lend nine times as much capital as they have deposited.
This is how money is created: one dollar becomes nine dollars. In
order to pay the interest on a loan, the borrower needs to get some of
the money that was created for someone else as a loan. Hence, a com-
petition arises between those who are issued debts to repay interests.
Limiting the monetary supply without regard to the actual goods and
services people have available to trade prevents people from trading
with each other even when the resources for meeting their needs are in
*
reality available. This creates what is referred to as artificial scarcity.
The price of product development is heading towards zero

(when it’s being done by voluntary networks)
The price of product distribution is heading towards zero
(when it can be done digitally)
The price of producing products is heading towards zero
(when it happens by the means of automated and flexible equipment)
This results in a total price heading towards zero.
This scarcity system is important for scenarios where there are not
enough resources to go around. However, this is not the case in to-
19 http://en.wikipedia.org/wiki/Fractional-reserve_banking

day’s world. The world produces enough to feed and house everyone . 20
Herein lies the issue with the current monetary system. It artificially
creates scarcity where there in reality is none. British philosopher Alan
Watts, when critiquing the depression , used a most succinct analogy
21
when describing this baffling, yet widely accepted phenomenon: ”If we

want to build a house, we need the materials, the land and the labor to
build it, but we don’t have enough inches. The inches all went across
the state to other developers, so … we can’t build the house. All over
the world we have ample labor and materials, but the jobs and produ-
cts are not being utilized because there is an artificial shortage created
by our current commerce system.”
Most people think about money as being entirely value neutral. Howe-
ver, it is not . The implications of this are enormous. This means that
22
depending on the type of medium we are using to transact, there is

inherently a value system associated with our commerce. Since this
commerce “makes the wheels of our society turn”, the values inherent
in this form of commerce are engrained into our society. It is likely
that you will believe in a Christian god if you are born into a Christian
family and are surrounded by Christian values. The same logic ap-
plies to our monetary system. Let’s examine the values inherent in two
forms of currency:
The inherent differences are quite obvious. When you consider how
these differences manifest themselves in our culture, you can begin to
understand how our priorities got so mixed up. Additionally, you can
begin to visualize how different our world would look if we were to
implement complementary currency systems.
Monetary currency Common currency
Competition Co-operation
Individual income Society’s finest
Greed Altruism
To date, such complementary currencies have been issued only on a
local level, as there is an element of trust and relationship building
implicit in this type of commerce. However, if Wikipedia can flourish
with millions of contributors that are linked only by the internet, could
decentralized/community-style commerce trade flourish as well, given
similar parameters? The creators of metacurrency.org believe so. This
site is dedicated to the development of opensource open currencies,
which will enable community currencies and potentially cross-commu-
nity commerce as well. If this experiment succeeds, they are essentially
20 http://www.worldhunger.org/articles/Learn/world%20hunger%20facts%202002.htm
21 Does It Matter?: Essays on Man’s Relation to Materiality, Vintage ed. 1971 Alan Watts
22 http://uazu.net/money/lietaer.html

rewriting the rules of commerce. An example of a transaction with meta-
currency might look like this:
Bob wants to download a book from Marge’s site and sends his ID
to Marge for approval of the transaction. Bob’s ID might contain his
purchase history as well as his contribution history (or it might simply
contain the ratio between these, depending on his ID settings). It might
also contain the ID of the community he belongs to. Both his ratio and his
community’s ratio for input/output would be considered by Marge’s list
of transaction acceptance criteria. If his and his community’s ratio falls
within the parameters that Marge has indicated on her settings, or if Bob
belongs to a trusted community, then the transaction would be approved
immediately. If not, Marge would have the opportunity to make a value
judgment on Bob, his work and his community’s work before processing
the transaction.
Nationally emitted currency has an inherent scarcity and

is an efficient form of currency to price tangible, scarce
resources. But, when this scarce currency is being used
to price information, which is not tangible and thereby in
principle in unrestricted supply, the pricing breaks down.
This is why we see information priced with scarce currency move con-
tinually towards zero. In order to properly price an infinite commodity,
you need to utilize a user-created, infinite currency. By pricing non-scarce
commodities correctly, you create the possibility for compensating the
contributors appropriately.
It is not difficult to envision a scenario where open source, blogging, etc.

will be paid with open money, and ‘pirating’ will then become much less
of a factor because it simply would be easier to buy from a content pro-
ducers’ site, using open money, than to search for an ‘illegal’ download.
The fact that this money can also be tied to real communities enables the
possibility for tangible commerce to be facilitated as well. If you think
about it, open source has so far only really given us variations of previous
products: Wikipedia (encyclopedia), OpenOffice.org (MS Office), etc. But
if true value were to be applied to open source, this would create a market
for individual producers on the internet to gain more meaningfully from
their contributions and therefore put themselves in a position where they
could produce works of originality.
In order to accurately represent the value inherent in something that is

not scarce (information), we need to use a currency that is also not scarce
(open money). One of the main factors stifling the development and

creativity on the internet is that scarce money cannot truly value that
which is not scarce. Lawmakers are applying measures like penalty-
based regulation to force consumers into spending scarce money to
pay for non-scarce goods. However, if scarce money was no longer
the medium of exchange and open money replaced it, this regulation
would no longer be necessary. This would have profound effects on
both internet society and local communities.
In this new landscape, companies who want to attract the best talent,
retain their competitive edge and cut costs would create contribution
framework systems that enable many more individual contributors
to enhance their product. These systems would harness the power of
open source by channeling individual contributors’ efforts and com-
pensating them with non-scarce currency. They will also promote not
only a work-life balance, but also redirect some of the overhead saved
on traditional compensation towards community development initiati-
ves which decrease reliance on national currency.
Old-fashioned enterprises New enterprises

Large number of permanent staff Many part-time employees and single contributors

Rewarding long hours Rewarding output and reducing working hours
Paying employees in the national currency Paying employees in multiple currencies
Company picnics Initiatives to improve the communal spirit
As we have seen, new money could feasibly be used to create stability

where traditional money alone cannot. It could also be used to power
the new information economy on the internet. If we do not apply the
principles of ‘open’ that we have used on information to currency as
well, we will likely realize the scenario outlined in the first Anarcono-
my report, wherein state control is used to restrict use of the internet.

THE Pirate
Bay SAGA
The Pirate Bay is a Swedish, so-called website tracker with more than 25 million
users and more than two million torrent files – i.e. files from which net users borrow
– lend to – each other. This website has for a long time been one of the world’s
largest web based centres for illegal copying and distribution of material protected
by intellectual property rights.
The lawsuit against The Pirate Bay and its representatives commenced in February
2009 in the Stockholm City Court and was terminated in the spring. The decision
was that four of the defendants were sentenced one year imprisonment each
and pay damages in the amount of 5.5 million USD to the music, film and record
companies represented at the lawsuit.
During the famous lawsuit in Stockholm City Court, Roger Wallis, professor of Multi-
media testified for the assumed pirates. Roger Wallis said in court that there was no
documented connection between the reduced record sale and file sharing. He was
harshly attacked by the delegates for this pronouncement.
Afterwards, he was asked if he wanted compensation for his travel expenses. The
professor didn’t, he would instead be happy, if they would send flowers to his wife.
This was intercepted by the ones, who were blogging live from the courtroom. Less
than 24 hours later, a website had been created, where people could contribute
with flowers, chocolate or other presents. Roger and his wife Görel received gifts to
an amount of 7000 USD within a few days.
On one of the donor sites that still can be visited, a pile of CDs are displayed next
to the donations. The intention is to underline, how many CDs could have been
bought with this amount and to show that there is nothing wrong with people’s
generosity – as long as the purpose is the right one.
In continuation of this, is of course a discussion of, who makes most on a music

release. The users don’t necessarily demand that the products are for free – but
they want to know, what they are paying for – and to whom.
See the website here: http://yodo.se/wallis/english.php, where you can also find
links for relevant articles. Read about The Pirate Bay lawsuit on Wikipedia: http://
sv.wikipedia.org/wiki/Pirate_Bay-m% C3% A5let .

3
We are witnessing a rapid growth of free content, services and products,
which are created by the users themselves in voluntary, self-regulated
networks. The price of these products, services and contributions are
heading towards zero, as these services are digital. We call this phen-
omenon anarconomy. It is a challenge for existing enterprises to find
their footing within this new frame of logic. In the future, enterprises will
have to take anarconomy seriously and in this report, we will tell you,
how it is actually possible to make money in an anarconomic market.
The future
anarconomy
markets
We have gone through a part of our assumptions in cooperation

with a number of players from industries that are already subjected
to anarconomic logics – or who are in the process of becoming so.
It’s easy to reject the assumption that anarconomy will mean a world
of difference to a specific industry. But a quick glance through old ar-
ticles about the influence on the world of the internet from ten - fifteen
years ago shows, how difficult it is to determine how big the effect the
internet has had. To most, it’s a gradual transition, which increases the
intransparency. See for example this quote from an article in News
Week, 1995:
“The truth is no online database will replace your

daily newspaper, no CD-ROM can take the place of
a competent teacher and no computer network will
change the way government works. Yet Nicholas
Negroponte, director of the MIT Media Lab, predicts
that we’ll soon buy books and newspapers straight
over the Internet. Uh, sure.”
23
23 From: http://threewordchant.com/2010/02/24/why-the-internet-will-fail-from-1995/

We set up a Wave on Google to bounce off our assumptions about the
24
future up against the reality, which is already unfolding here and there
and invited a panel of relevant experts to take part in a debate about
anarconomy.
We finished off with a round table conversation at the Copenhagen

Institute for Futures Studies, where we summarized the debate. We
have turned this into small portions of scenarios, which focus on very
specific aspects of the future that we will shortly find ourselves in.
These can be read partly as a series of statements about the future

estimated to be more or less probable, partly as an update of some of
the potential development opportunities, which was imbedded in the
scenarios in our first anarconomy report. You can benefit from using
the statements to test them against your own reality of your enterprise
or industry. Are you yourself strongly prepared for the challenges that
anarconomy will present – or should something be done now?
Anarconomy business
– scenes from a meeting of experts
In the beginning of 2010, we convened a number of experts for a

workshop at CIFS. The purpose was to take the idea of anarcono-
my, as a potential for profit, into the future in the company of peo-
ple, who have something at stake with regards to the anarconomic
markets.
The participants in the expert panel were:
Managing director, Kim Møller-Elshøj, expert on online consumer culture

- Scuttlebutt / Head of Music, Tejs Bautrup, expert on media and online
music services - TDC Play / Lawyer, Morten Rosenmejer, expert on intel-
lectual property rights - KromannReumert / Managing director, Søren Krogh
Thompson, expert on markets for music - Playground Music / Media advisor,
Joackim Penti, expert on media and branding - Syntese Mediabuying
We asked the expert panel to take a position on a number of statements, which we

work from ourselves in relation to anarconomy. Our intention was to catch our own
blind angles in relation to anarconomy. Thus seeing how corporate professionals
address the new business models that invariably will arise in a market, where the
development is heading towards free, accessible and for everyone, where know-
24 An open, common document folder in which many can write. All co-writers read it as things are being
written. This makes the writing process resemble that of a conversation.

ledge and objects are distributed through networks, and where the enterprises are
increasingly under pressure from the demands and involvement of the users.
The experts’ different backgrounds definitely influenced the debate that could get
rather heated, when topics like piracy, user involvement and enterprise control were
being debated. Statements such as “enterprises do not respect the users”, “adapt or
die”, “for free is just another way of making money”, and “as we know, pirates cannot
develop new medicine” went flying across the round table in the conference room.
Several of these quotes are eminent to put forward as section breakers! The debate
challenged the topics, CIFS described in 2009 in the first anarconomy report. There
was especially focus on the conflict between the users’ desire for free products and
services contra the enterprises’ need for profit, control, and intellectual property
rights.
A principal line in the debate was the question about whether the users’ needs
should be taken into account and rule the development or if the enterprises conti-
nually should be able to limit the flow of products and information and protect their
control and intellectual property rights.
It is, according to Joackim Penti, expert of media and branding, futile when enter-
prises attempt to reduce the outflow of information. Partly due to the fact, that the
volume of data, which is already accessible is infinitely massive, partly due to the
fact that it is impossible to control the users. There will always be someone who
cracks the code, and underground networks will continually exist, leaking things
before they are published officially. Generally, the users have an enormous influence
on the corporate process.
Joackim Penti claims that this will in the future also be reflected in regard to recrui-
ting employees for enterprises, seeing that it to a greater extent will be the “users”
i.e. the employees, who evaluate and choose the company than the other way
around.
Companies are already now hiring a lot of freelancers and this development will
continue. Companies are abandoning the model with fixed partnerships, where
the employees stay on for years and only work for one company. In the future,
more employees will become free agents, who alternately work for the companies
they feel like working for. According to Joackim Penti you will not be loyal to just
one company. ”The users and the market will put pressure on the large companies
– people want the option to choose freely and flexibility. People don’t want to be
boxed. They want to use their knowledge in several places”.
His advice for future wage earners is: “Drop the idea of a fixed salary and a fixed
job description. Do what you love and find the companies, who collect that type of
people.”
The objection to this from the others at the table was, however, that companies
continuously will have a wish to have permanent staff and their accumulated
company experience.

What does the market need for us to be able to do?
The crucial point of the debate was, how enterprises can and must adapt their
business models to the anarconomy trend, that is the development on the internet,
the dispersal of products and the users’ multiple and diffuse demands. The new
anarconomic “for free”-trend simply requires new business models.
The enterprises are, according to expert of media and online music services, Tejs
Bautrup from TDC, trying to adapt to the users, but it is difficult, because their
many conflicting demands complicate the picture. “I’m entirely sure that the enter-
prises would like to listen to the consumers and give them what they want, but it is
incredibly difficult. They want both one and the other thing. It’s consequently about the
enterprise developing competencies to figure out, what people want.”
For enterprises, it’s a question of creating order in chaos – and to both find out
what the consumers want and assist them in getting it.
Expert of online consumer culture Kim-Møller Elshøj from the company Scuttlebutt
points to two other competencies: “The enterprises should be able to comply with
the consumers’ needs – both the perceived ones as well as the non-perceived. Two
things in particular are important: One is navigation. To be able to offer navigation in
the more complex information society and finding the correct information in a short
time. The other is to create sense – when you have found the relevant things, then you
should transversely to these create logic in a society, which is becoming increasingly
fragmented.”
In order for the enterprises being able to follow the users, navigate and create
sense in a market, where the consumers’ demands are constantly ascending and
go beyond the purely financial, it requires, however, first and foremost, according
to expert in music markets, Søren Krogh Thompson from Playground, that the
users have faith in the enterprises: “Faith is totally crucial. If the company is untrust-
worthy, it’s absolutely no use whatsoever. For instance, to have paid blogging – that’s
untrustworthy. It takes a long time to launch a record, because we need to reach the
consumers and find out what they want and adapt the product. The consumers need
to have sympathy for and confidence in the band and feel that it’s genuine and not
just a concept band. For that reason, faith is an extremely important competence for
enterprises.”
The record companies should, according to Søren Krogh Thompson, offer different
products at a fair price, because people want to listen to music in various ways:
“Today, the corporate landscape is more nuanced – there are a lot more formats
– some want sound on their mobile phone, others want good quality.”
So the enterprises must be ready to make money in new ways and offer new
services.
In addition, money can be made by offering something extra besides the music, for
example special events or a dinner with the band, something which to the consu-
mer constitutes a true value that cannot be copied.

Ergo, enterprises must make a business model, which can contain several consumer
types . Søren Krogh Thompson expresses it like this: ”Switch over your production
machinery, adapt or die! People love music, so we have to make business models that
make it fun. We need to test some new models and find new sources of income. For all
the places, where people want to listen to music, we must find a corresponding business
model that fits the need. And it will also happen to books, films and other products.”
Digitalized products will become free – but how about the physical ones?
Among the experts, there was agreement that it is not only makers of digitally distri-
buted services and products, who need to adapt. Also manufacturers of physical
products need to find new business methods. According to Joackim Penti, the
newspapers are still surviving today, exactly because they have managed to make
new business models and adapt their product to the demands of the consumers by
for instance making new formats or partially digitalize their products.
Physical products are harder to distribute, but everything can be pirate copied
transnationally, because it can be produced inexpensively in the Far East and
bought via the web. For articles such as shoes and armchairs, where digitalized
solutions are not an immediate possibility, the problem is in particular the increasing
pirate copying and sale of cheap copies. The consumer can access the internet
and order a piece of furniture resembling that of an Arne Jacobsen design.
It has become much easier to access cheap products. According to Kim Møller-
Elshøj, a polarization of the consumption is taking place: “People go to discount
stores and play do-it-yourself people, but when they have to spend money, they want
really good quality – something that they can’t make themselves, or something that
has a special story to it”. He therefore believed that luxury products will become
more sought after, as consumers will become more uncompromising, when they
really have to spend money and can’t get the things for free. For that reason, the
enterprises should be able to do it better than the consumers themselves and not
compromise on quality.
There will still be an exclusivity connected to physical products – not everyone can
get them and this makes them appealing. But many consumers will make do with
a copy, because it is cheap and easy to get. For this reason, enterprises must offer
something special and tell a story behind its brand that a cheap copy doesn’t have.
Surrender the control of your product

and maintain the control of your market
Consumers want everything to be free and accessible. It’s no use to just limit the
access to services and products. Because if something is made so it cannot be
copied or cracked, then more people will want it, and it always ends up with being
hacked. More enterprises have also stopped to threaten the consumers with law-

Free is a new
way of making
money. Surren-
der the control
–you don’t have
it anyway.
Switch over
your produc-
tion machinery,
adapt or die.
Everything be-
comes free, be-
cause the mar-
ket demands it
suits. Instead, they try to win their sympathy and change the moral among con-
sumers. The question is, however, if a bad conscience can make the consumers
refrain from pirate copying.
The enterprises should, according to Joackim Penti, instead consider lowering their
prices, which in many cases are absurdly high with regard to what the consumer
gets for the money, especially when you can buy a cheap copy on the internet as
easily as anything. If the copies are made in the same factory as the originals, it
may in the eyes of the consumers seem unreasonable to pay more for it. If people
don’t feel that they are cheating, but feel that the enterprises are cheating them,
they will continue to pirate copy. As Joackim Penti expressed it: ”Everything be-
comes free, because the market wants it to.”
People want to test things before they buy them. If enterprises surrender the con-
trol, give “free samples” and develop the products more for the consumers, they
will be able to adapt to the development better and thereby make more money in
the long run.
But the question is whether pirate copying stops, if the prices are lowered or things
become completely free. Do the enterprises just have to accept a lower profit mar-
gin and allow the pirates to run free? The round table’s enterprise representatives
and the defenders of the legislation, expert of media and online music services, Tejs
Bautrup, and attorney and expert of intellectual property rights, Morten Rosenmejer,
don’t think they should. Because if the enterprises just lower the prices, they will
not have their development expenses covered, and then they will subsequently not
develop the products. Morten Rosenmejer: “If medicinal companies don’t over-
charge, they are not able to develop new products. As we know, pirates can’t test new
medicine! It’s necessary that authorized people develop specific things”.
There’s still a need for enterprises to manage and lead the development of new pro-
ducts and services, but they have to get used to users and employees having new
opportunities – and therefore new demands. Joackim Penti: “Now, you have to accept
it and live with that your business may be ousted by three people in a garage. For that
reason, you should establish entire divisions dealing only with development. Pay them
good money, maybe even co-ownership and listen, when they speak. They know best”.
How will it all end?
The enterprises in the new anarconomic market have to prepare themselves for
employing new business models both in their recruitment phase, product de-
velopment and marketing. But how will they become ready for it, and who can
they address? A possibility, which was discussed at the meeting, was to use more
freelancers and free agents that aren’t tied to the company, but who can contribute
temporarily with a specific knowledge and share experience from other companies.
The enterprises need to develop competencies that are dealing with discovering

and understanding the users demands, to be able to navigate in the swarm of of-
fers and services available on the internet and first and foremost to secure consu-
mer trust.
But, should the companies completely let go of the control and blindly follow the
diffuse demands of the consumers? And what is it that the consumer will pay mo-
ney for then? The message from the meeting was that it, at all events, is essential
for the company to realize that the users have some demands that can be met in
other places – often for free – if they are not satisfied with the price or the accessi-
bility. Therefore, the enterprises need to develop new business models and sources
of income tailored to the new demands.
The market is to a larger extent constituted by users, who want products in many
different versions and preferably for free. To make some services free can also be
a way of making money. But the enterprises can’t merely always lower the price to
zero. They still need to have their development sections financed. In fact, they must
invest more money in their development sections and surrender control more, so
their products can keep up with the development and the consumer requirements.
Scenario bits
On the following pages, the reader can on his or her own follow what types of
statements, we have been discussing with the experts, and what their joint evalua-
tion of the various statements’ chances of surviving is. You can read it in three ways
/ As a series of statements about the future, which by the experts are estimated to be
more or less probable.
/ As an update of some of the development possibilities, embedded in the scenarios
in our first anarconomy report (but you need not have read it!).
/ As a sort of test of your own company or industry. Are you yourself solidly prepared
for the challenges, anarconomy will bring about – or should something be done now?
Statement 1
”Strict protection of intellectual property rights are unimportant,
because it cannot be enforced after all.”
Almost half of the panel agreed in this statement, while the rest was equally divided
between the attitude that ”Strict protection of intellectual property rights is necessa-
ry in order for the holder of the intellectual property rights can make money on their
ideas” and the attitude that “Strict protection of intellectual property rights restricts
the development of new ideas and makes it easier for the big to sit on the small”.
It reflects that intellectual property rights are at a watershed. There’s an increasing

doubt as to whether the rights do more damage than benefit and a declining confi-
dence in them being enforceable in reality in the future digital network society.
During the time period up until 2020, society spent vast resources in the attempt to
protect the intellectual property rights against pirate copying25. The internet sup-
pliers were enjoined to monitor the information flow to and from their clients and
to report clients who were guilty of pirate copying. The expenses for this “police
activity” was brought on to the clients, which led to higher prices on bandwidth
internet. Paradoxically, the expenses often exceeded the losses that the holders
of the intellectual property rights were supposed to have had due to pirate copy-
ing. In the end, the steps proved futile, because they didn’t make an appreciable
difference to limit pirate copying. It was easy for dedicated pirates to share files
on encrypted websites that you could only enter through a complicated web of
anonymous routers26, and small time copiers just made sure to share files directly
between computers, mobile phones or other hardware without use of the internet.
Only when pirates attempted to make money on copies was it possible to get them
by following the money. That type of pirates weren’t liked by many so they were
in general, quickly reported by other internet users entirely without using the more
organized surveillance systems. If people wanted a free copy of something with a
digital content, they could get without a problem.
This doesn’t mean that musicians, authors and other artists have stopped to publish/
release material in digital form. Firstly, many clients choose to pay, even though they
can get a copy, because they want to support the artist. This especially applies when
most of the money goes directly to the artist without too many expensive intermedia-
ries. The payment is not always directly linked to the individual product, many choose
at intervals to use services such as Flattr27 in order to donate money to the artists,
they like. Secondly, an increasing number of artists consider digital publications to be
adds for concerts28, to authors, digital books are adds for talks and signing physical
books, and to the visual artist, an original painting is worth more, the more people
who have seen a digital copy. In addition, many artists in particular make money on
commissioned work, and that kind is easier to get, if you are already known in ad-
vance, for example via free sharing of their earlier works on the internet.
The losers are not the artists, who on an average actually make more money than before, but
“the intermediaries” such as publishing firms, record companies and stores. The film industry
is doing quite well, because people haven’t stopped going to the movies, even though they
have access to free pirate copies. In spite of continuously more advanced home cinemas,
it’s still an entirely different experience to go to a real movie theatre with hundreds of other
people29. Narrow films are actually doing better than before, because the advertising proceeds
from free distribution on the internet provides bigger proceeds than the sale of movie theatre
tickets and DVDs.
26 www. Torproject.com
27 www.flattr.com
29 http://boxofficemojo.com/yearly

Statement 2
”Google and China are these days conflicting about the access, the
control and the right to information. This type of conflict – between
enterprises and states will become common in ten years.”
The panel is for the most part predominantly in agreement, when it comes to this
statement. Recent years have encountered several conflicts between states and en-
terprises regarding the right to distribute information, for instance, The French courts
has ruled a heavy fine against Google for putting authors’ books on Google Books
and in Italy, a judgement has been passed against YouTube for having released a
video showing pupils making fun of an autistic child. The Swedish lawsuit against the
file sharing service Pirate Bay can also be viewed as an example of this trend.
”Knowledge is power”, Francis Bacon wrote 600 years ago, and it is not less true
today, where the amount of formalized knowledge has exploded and where the old
days’ barter economy has to a wide extent been replaced by knowledge economy.
In 2020, you see examples of conflicts between states, enterprises and organizati-
ons about the access, the control and the right to information on a daily basis. The
point of the conflict is typically one of the following:
/ Who has the right to distribute knowledge and content

(and thereby the opportunity to make money)?
/ Who has the power and the duty to edit and censor knowledge and content:
The distributor, the state or the individual citizen?
Knowledge, art, entertainment, and software have a certain value to the ones using
it, and there are individuals, enterprises and organizations who would like to make
money on communicating that type of valuable content to the users. Conflicts oc-
cur when there’s disagreement about who should make money on this communica-
tion. The ones creating the content, the ones adapting it, or the ones who distribute
it. Conflicts also occur when there’s disagreement about who has the right to
communicate the content and what this right should cost. In a world with conti-
nuously more players and constantly more channels to distribute content, more of
this type of conflicts have surfaced.
Power brokers have traditionally seen it to be part of their task to protect the
population against information or other content of ”an unfortunate” nature, whether
it is about extremist propaganda, illegally copied content or content of an immoral
character, for example porn, violence and gambling. Naturally, this creates conflicts,
partly with companies and organizations wanting to pass on that type of content,
partly with citizens who want to receive it. In a time, where enterprises are interna-
tional and where citizens to an increasing extent demand the freedom to decide
for themselves what type of information they have access to, such conflicts have
become more common.

The situation has become more complex, because the distributor of knowledge
and content doesn’t always have the control over what is being distributed, just as
a mailman isn’t able to control what is written in the letters he’s handing out. The
digital world is full of services to find, publish and distribute content, and it’s not
always possible for the distributor to control the character of the content, especially
if the content is encrypted or in other ways masked.
In 2020, you’re still far from finding a clarification of the conflicts, but step as the
conflicts become more frequent and loud, they also become more and more trivial
– because it has in fact proved to be impossible to control the access to knowledge
and content.
Statement 3
”In 5 years, the Pirate Party will not be the parliamentary foundation
of at least 10 governments in Europe.”
The majority of the panel did not think that the Pirate party in 5 years time will
achieve a substancial amount of political influence – and half were positive. That’s
hardly a surprising result. The Pirate Party represents a radical new political line of
thought that’s difficult to place on the traditional right/left axis. The party will probably
be more marginalised in the parliaments than the extreme right and left are now.
Since the Swedish version of the Pirate Party won two seats in the European Par-
liament by getting more than seven percent of the votes cast, the party’s divisions
have gained ground in several countries with seats in national parliaments. In 2015,
the Pirate Party is among others represented in the parliaments in Sweden, Finland,
Norway, Holland, Germany and the UK. In spite of the support from the large group
of voters, the party has, however, not achieved any political influence worth mentio-
ning, seeing that it is being given the brush-off by most other parties, who consider
them to be frivolous or outright dangerous. The role of the party is especially to play
the part of the “watch dog” and to draw attention to when Bills can lead to restric-
tions in the free access to knowledge and culture or to more surveillance or other
erosion of the peace of privacy.
The positions the Pirate Party stands for have, on the contrary, significant diffusion
on the internet’s informal forums, where it isn’t difficult to find views supporting the
protection of the openness of the internet and that the copyright legislation ought
to be revised in such a way that it matches reality on the internet better. These
positions have especially gained ground after various anti pirate acts, which were
passed in the beginning of the 2010’s, have made life more difficult for internet
users, without otherwise limiting pirate copying in particular. The fact that the posi-
tions haven’t produced corresponding political support is among other things due
to the party being viewed as a single cause party without a more extensive political
programme. The name itself of the party also deters many from voting for them, but

attempts to initiate wider and more “serious” parties, sharing the Pirate Party’s fou-
ndation of values, have until now failed, maybe because the Pirate Party has ended
up being a mouthpiece for these values.
At the election for the European Parliament in 2014 the Pirate Party however, gains
territory to get eight seats and this makes many realize that they are not just here
today and gone tomorrow, but they are a long-term sustainable movement. There are
several traditional parties, who start to adopt more of the Pirate Party’s less radical
causes in their own programmes, maybe in the hope of attracting more voters sym-
pathizing with the Pirate Party’s causes, but who get deterred from the radical image
of the party. Maybe the end result will be that the Pirate Party “triumphs itself to de-
ath” in the sense that the party’s values gain ground without the party itself doing so.

Statement 4
“In 10 years, the majority of professional record companies are
discontinued or have gone bankrupt. Instead, networks of amateur,
semi-professional and fully professional artists distribute and pro-
mote their music for free through networks.”
The main part of the panel found this unlikely, but a large minority thought it likely.
There is no doubt that the traditional, professional record companies are challenged
by the internet and the technological development. If they want to survive, they
have to transform and find new business methods.
In the first decades of the new millennium, the professional record companies faced
pressure from two sides. On the one hand, companies were increasingly boycotted
by music customers, who found the traditional record format expensive and inflexible
and who had easy access to pirated copies and cheap or free downloads. On the
other hand, a growing number of musicians thought that the record companies were
cutting an unreasonably big slice of the pie when records were sold, and because of
this, they starting selling music directly to their fans or even gave digitized music away
in the hope of attracting more customers to concerts, which the musicians themsel-
ves earned more on – and this tactic turned out to be valid30. The record companies’
former dominance of the music industry derived from their solid grip on the produ-
ction and distribution of recorded music, and they hence found it easy to determine
conditions and prices for selling music. The rise of the internet and personal compu-
ters pulled the rug out from under this dominance. Now, it was possible for musicians
to get directly in touch with their fans all over the world, and the music users became
able to make and distribute copies of music at next to no cost.
As early as 2010 it was clear that things couldn’t go on as before. In spite of a sig-
nificant growth in paid music downloads, the record companies had lost half their
turnover during the noughties. Attempts to limit piracy through copy protection and
severe punishment largely failed. The very strict international copyright agreement
ACTA also failed in achieving the desired effect, and the difficulties the regulations
created for ordinary citizens rubbed off as a negative view of the record industry,
which was seen as the ‘head villain’ behind the irritating and costly measures. Several
record companies, in particular among the small and medium-sized, realized that the
battle was lost – it was no longer possible to maintain the once lucrative business of
being middleman between musicians and customers. And so, these companies tried
to radically change their business models and hence improve their images.
Some companies increasingly offered themselves as a service to bands that ne-

eded advice on developing their music and image – they became a sort of ‘styling
consultants’ for the musicians and often also promoters of concert tours. Other
companies instead tried selling music in new ways: not by selling individual tracks,
but through offering subscriptions to a service where the users could hear just as
much music as they liked and get the opportunity to discuss the music and get-
ting recommendations through comparing lists of favorites. Some have tried being
agents that sell the use of music in commercials, TV series and movies. Neither
these nor other measures have provided quite the same sky-high profits as the
industry was used to, but many of them have in the time leading up to 2020 shown
themselves to be valid business models for leaner companies.
Anarconomy business models: An overview

Free products and services, created by voluntary networks, are increasingly chal-
lenging the commercial enterprises’ business. So how should enterprises make
money, when the price of everything, which is – or in the process of becoming
- digital costs zero, when new business models appear each day, and when people
create without demanding dollars in return?
The development is putting pressure on the enterprises to use new business mo-
dels. The consumers are often demanding things, such as assistance for navigati-
on, saved time and exceptional quality that cannot be made at home. The enterpri-
ses must therefore partly offer new products in several different versions and partly
be open to involve the users in the entire business process.
It’s not just a question of lowering the price to zero, but generally to adapt the en-
terprise to the new anarconomy logic.
The business models can be combined in a vast number of ways – and this list
isn’t exhaustive. Enterprises ought to become more conscious of these possibilities
and continue to experiment with them. Come up with new business models. The
elements below can hopefully become inspiring building blocks in that process.
This matrix is to present an overview of some of the possible business models that
exist in the anarconomic market:
Make money on ’for free’ Let go of the intermediary

Employ user networks Involve free agents

Here the four business models
are presented in depth:
1. Make money on “for free”
To give things away for free may on the face of it seem like a difficult way to make money, but the business model
contains many alternative sources of income. Free products can for example result in purchases of additional (both
digital and physical) products, for instance if the clients pay for some of the service or for an extra service.
Examples of free products:

/ Freemium, where a basic product/the core service is delivered freely and for free, whereas money is being
made on sale of a more advanced premium product, the supplementary value and extra services.
/ Freeware – software, which can be used legally without having to pay for it – for example Adobe’s Reader
and Internet Explorer and anti-virus programmes, which are for free, but where you can choose to donate
something. This donation model rests on inclination based payment.
/ Adware – where some software is free to use, but it contain adds.
In addition, enterprises can give something away for free and get something else in return from the user:
/ Service as a counter contribution: for instance, ”Answer this questionnaire and get a free song!” or “Tip
off 10 of your friends and get access to this online application for a month!”
/ The popular online hard disc Dropbox writes “For every friend who joins Dropbox, we’ll give you both
250 MB of bonus space”. Moreover, see examples of enterprises paying consumers for spreading the
word to their friends in the paragraph regarding employment of user networks.
In addition, there are many business models, where the enterprises are beginning to give their core services or
primary products away for free, while they are making money off extra services.
*Look at the list in the box on page X that outlines a long series of specific examples of different extra services
that the consumers and the market have a demand for and that enterprises can make money on offering.
2. Let go of the intermediary

Enterprises should to a greater extent let go of the intermediary between them and the consumer. Today, more
enterprises choose to sell products directly to the client and avoid the traditional channels.
Examples of this are:

/ Musicians releasing records directly to the consumers avoiding the record companies.
/ Creative Commons giving artists, scientists and others the possibility to entirely or partially share their work
and thereby not having to spend time and money on upholding and administering traditional intellectual
property rights.
/ By offering the product at a much lower price, the maker can make money, because the intermediaries
don’t have to have their slice of the cake.

3. Employ user networks in the enterprise
Enterprises can make money by involving the users’ knowledge, ideas and networks in the entire process. Invol-
vement of networks run by the users and direct user involvement gives legitimacy, new inputs and can create a
bigger client basis.
/ Mass co-operation (also called peer to peer production) and open source technology (the Wiki economy,
Linux, Open Office) used in the communication and production process saving money and time.
/ Enterprises can share their earnings with free agents, for example the users, who help to sell the service
or product on. Examples of shared earnings:
/ The enterprise pays the user for each friend that the user gets to buy the service. This is for instance employed
in affiliate marketing. Here, the affiliate programme is “Amazon Associates” a known and successful example
http://bit.ly/cJmOGI.
/ The user is paid for the content that the user produces on the website of the enterprise, depending on the
popularity. Both www.associatedcontent.com and www.sswug.org sell content, where individuals are paid
to write articles about specific topics. On www.sswug.org, the user gets “royalties”, when his or her article
becomes popular.
/ Payment for creating traffic/business on the vendor’s website, typically by listing or selling the products on
another website or by linking to product reviews http://bit.ly/d5i4PA
/ The user him- or herself sells the service online (through his or her own selling system)
/ The user tailors the vendor’s product and now sells it on as his or her own (White Label). Social Media
Monitoring Service “ScoutLabs” (http://bit.ly/8ZOzdL) is a good example of this. They are selling solutions
to offices, which then resell the service to their clients using their own logo.
4. Involve free agents

Enterprises can also use anarconomy in the recruitment and development process and make use of employing
free agents temporarily concurrently with the goals and projects of the enterprises changing faster:
/ Enterprises can engage more freelancers instead of permanent staff.

/ Advantages to this are, among other things, a more free and more flexible flow of ideas and competencies
in the enterprise, new cutting edge expertise and a fresh perspective.
/ Investment in a larger development section with ad hoc involvement of free agents
(who can also be amateurs).

Bibliography
– Out of control
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Future of Business” www.wired.com/techbiz/it/maga- Anchor Books, Randomhouse
zine/16-03/ff_free - Tapscott, Don (2008): Wikinomics – how mass col-
- Doctorow, Cory (2008): Content: Selected Essays on laboration changes everything. Portfolio hardcover
Technology, Creativity, Copyright, and the Future of - Vaidhyanathan, Siva (2003): Copyrights and Copy-
the Future. Tachyon Publications wrongs: The Rise of Intellectual Property and How It
- Ganz, John & Jack B. Rochester (2009): Pirates of threatens creativity. NYU Press
the Digital Millennium: How the Intellectual Property - Watts, Allen, Ed. (1971): Does It Matter?: Essays on
Wars Damage Our Personal Freedoms, Our Jobs, Man’s Relation to Materiality, Vintage
and the World Economy. FT Press
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user-generated media are destroying our economy, tent/10_04/b4164028483414.htm
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and Future of Creativity. Penguin (maybe available for 00144feab49a.html
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gital piracy and the capitalist movement. University of
Toronto Press

Anarconomy’s influence
on your future market is consolidated and reinforced by a number of key trends.
The computer capacity is growing, especially mobile bandwidth.
This results in:

Better abilities to compress images and sound.
The internet continues
to expand.
Especially mobile networks are increasing

the internet’s global impact.
An increase in the number of stories, the amount of content and conversations.

The users getting more and more advanced tools for editing and producing films and music.
More and more services becoming location based.
The diversity increasing on the internet in the shape of groups, networks, languages,
virtual worlds, relational forms,
and to what may seem like an infinite extent.
During the
ten seconds,
it has
taken you
to read
this far
104 new blog posts have been published, 54 new Facebook

members have been created, 1800 $ spent on virtual products
and 100.000 videos have been viewed on YouTube.

The internet will continuously become more complex
and it’ll become harder to locate / what you need /
what you want / what interests you / answers to your questions /
friends, girl- and boyfriends /
The family/communities of interest/clients/suppliers /
press contacts / colleagues
The content output will be affected by the context that the maker (the
user) is in: salsa dancer one moment,
petanque player the next and later the analyst reflecting about the
most recent conference
and finally a father searching for knowledge about his son’s disease.
The successful on the internet in the future are the ones,

who are best at making sense of the complex
navigation / find what they’re looking for fast / make sense of the
wast ocean of online conversations
/ put knowledge into
action
1. 2. 3.
The computer facilitates Man facilitates A fusion between computer
navigation navigation and man facilitated navigation
for example Google and for example network based – artificial intelligence,
other search engines. navigation in knowledge and semantic web etc.
Tools for monitoring social networks fulfilling different This last possibility lies
media. Analysis of statistics, needs at different times. farther into the future.
network analysis etc. Pitfalls: group thinking Pitfalls: too uncertain, too
Pitfalls: has no sense of the and infinite possibilities may technically complicated to be r
”real human voice.” result in weakened innovati- ealistic within a foreseeable
ve force and will just provide number of years.
“more of the same”.

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Copenhagen Institute for Futures Studies

Instituttet for Fremtidsforskning

The world according The anarconomic markets

Visit The Copenhagen Institute for Futures Studies

CIFS’S REPORTS ARE PUBLISHED FOUR TIMES A YEAR.

We are witnessing a rapid growth of free

This report addresses the challenge of

The core elements are still that knowled-

Rapport: UDE AF CONTROL / MAJ 2010 / www.iff.dk 

2011 TV-channels 2011

Report: out of CONTROL / www.CIfS.dk

Rapport: UDE AF CONTROL / MAJ 2010 / www.iff.dk

Anarconomy and business

The word anarconomy may in a business context seem a bit contra-

Our allegation is that the decentralized development, production and

In our first report on anarconomy, we described how the business

This report is a diagnosis of which problems anarconomy gives busi-

 Report: out of CONTROL / www.CIfS.dk

Have a good read!

Jacob S. Thomsen, Project Manager

In the anarconomy spirit of freely sharing knowledge, we render

Rapport: UDE AF CONTROL / MAJ 2010 / www.iff.dk 

In this, we are introducing a number of the most important ways to

In 5 years, search engines such as Google will still be popular invol-

 Report: out of CONTROL / www.CIfS.dk

Here, there and everywhere

The computers’ calculation ability will continuously increase. Band-

Thus, we will gradually be facing an increased complexity in every

Rapport: UDE AF CONTROL / MAJ 2010 / www.iff.dk 

I’m feeling lucky

Search engines such as Google will constantly become increasingly

Google is not yet good enough when it comes to including synchro-

What people will do is to increasingly make use of their (virtual) net-

10 Report: out of CONTROL / www.CIfS.dk

wall post or the Tweet.

The possibility to target your micro blogging towards specific seg-

Life phase affiliation

For that reason, there’s an important business opportunity in analy-

See more elaborate article on quality in networks can be found at www.saxberg.dk

Rapport: UDE AF CONTROL / MAJ 2010 / www.iff.dk 11

This can both conclude in solutions resembling artificial intelligence

The success of the Semantic Web is dependent, however, on whether

As a consequence of this, efficient operation of an enterprise should

12 Report: out of CONTROL / www.CIfS.dk

Seeing that the clients increasingly want influence on coming products

In order to create a wise or smart group of people, the following crite-

Diverse attitudes: Every individual ought to possess personal

Independence: People’s attitudes shouldn’t be affected by

Decentralization: People can specialize themselves and make

Aggregation: A suitable method for aggregating people’s per-

Not surprisingly, it is opposite to the above mentioned conditions that

Rapport: UDE AF CONTROL / MAJ 2010 / www.iff.dk 13

Imitation: When it’s possible to see the choices of the other

Centralization: A hierarchically organized organization that may

Division: Silo thinking, and that some people have an exclusive

Feelings: Emotional factors such as the feeling of solidarity can lead

However, it is argued that even though all of Surowiecki’s precondi-

Infinite alternatives slow down innovation

interesting consequences, when it comes to how enterprises should do

See Member report #2 2009, Futuredriven innovation

14 Report: out of CONTROL / www.CIfS.dk

To clients, who are facing interminable options, it is a challenge to

In several western countries, ”pay-per-view” TV is increasingly gaining

This will entail a series of challenges especially to the entertainment

Rapport: UDE AF CONTROL / MAJ 2010 / www.iff.dk

Report: out of CONTROL / www.CIfS.dk

Rapport: UDE AF CONTROL / MAJ 2010 / www.iff.dk

Report: out of CONTROL / www.CIfS.dk

Rapport: UDE AF CONTROL / MAJ 2010 / www.iff.dk