Editing Threshold pledge system

{{Short description|Fundraising method}}
{{refimprove|date=October 2012}}
The '''threshold pledge''' or '''fund and release''' system is a way of making a [[fundraising]] [[Promise|pledge]] as a group of individuals, often involving [[charity (practice)|charitable]] goals or financing the provision of a [[Public good (economics)|public good]]. An amount of money is set as the goal or ''threshold'' to reach for the specified purpose and interested individuals will pitch in, but the money at first either remains with the pledgers or is held in [[escrow]].

When the threshold is reached, the pledges are called in (or transferred from the escrow fund) and a contract is formed so that the collective good is supplied; a variant is that the money is collected when the good is actually delivered.  If the threshold is not reached by a certain date (or perhaps if no contract is ever signed, etc.), the pledges are either never collected or, if held in escrow, are simply returned to the pledgers. In [[economics]], this type of model is known as an [[assurance contract]].

This system is most often applied to creative works, both for financing new productions and for [[buyout|buying out]] existing works; in the latter cases, it is sometimes known as '''ransom publishing model'''<ref>Clive Thompson. [http://www.collisiondetection.net/mt/archives/2005/06/the_ransom_mode.php "The “ransom” model of publishing"]. ''[http://www.collisiondetection.net/ Collision detection]'', June 2005</ref> or '''Street Performer Protocol''' (SPP).<ref name="SPP">John Kelsey; Bruce Schneier. [http://schneier.com/paper-street-performer.html "The Street Performer Protocol"] [[USENIX]] Press, ''The Third USENIX Workshop on Electronic Commerce Proceedings,''  November 1998.</ref>

==History==
The Street Performer Protocol is a natural extension of the much older idea of funding the production of written or creative works through agreements between groups of potential readers or users.{{Citation needed|date=May 2012}}

The first illustrated edition of [[John Milton]]'s ''[[Paradise Lost]]'' was published under a subscription system;<ref>{{cite journal|last=Shawcross|first=John T.|title=The First Illustrations for Paradise Lost|journal=Milton Quarterly|date=May 1975|volume=9|issue=2|pages=43–46|doi=10.1111/j.1094-348X.1975.tb00136.x}}</ref> and Mozart and Beethoven, among other composers, used subscriptions to premiere concerts and first print editions of their works. Unlike today's meaning of ''[[subscription]]'', this meant that a fixed number of people had to sign up and pay some amount before the concert could take place or the printing press started.

<blockquote>These three (piano) concertos K413-415 ... formed an important milestone in his career, being the first in the series of great concertos that he wrote for Vienna, and the first to be published in a printed edition. Initially, however, he followed the usual practice of making them available in manuscript copies. Mozart advertised for subscribers in January 1783: "These three concertos, which can be performed with full orchestra including wind instruments, or only a quattro, that is with 2 violins, 1 viola and violoncello, will be available at the beginning of April to those who have subscribed for them (beautifully copied, and supervised by the composer himself)." Six months later, Mozart complained that it was taking a long time to secure enough subscribers. This was despite the fact that he had meanwhile scored a great success on two fronts:...<ref>Robert Philip. <!--http://www.hyperion-records.co.uk/notes/67358.html-->[http://www.hyperion-records.co.uk/al.asp?al=CDH55333&f=Mozart:%20Piano%20Concertos%2011 Sleeve Notes - ''Mozart: Piano Concertos 11 12 & 13; Susan Tomes (piano), The Gaudier Ensemble'']. [[Hyperion Records]], ''Helios'' (2004).</ref></blockquote>

However, there are a number of differences between this traditional model and the SPP. The most important difference is that traditionally, the subscribers would be among the first to get access and would do so with the understanding that the work would likely always be a "rare" good; thus, there was some status in owning a copy, as well as the prestige of being among the patrons.{{Citation needed|date=May 2009}} Additionally, subscriptions were generally sold at a set price,{{Citation needed|date=May 2009}} but some wealthy subscribers may have given more in order to be a patron. In the modern Street Performer Protocol, each funder chooses the amount they want to pay, and the work is released to the public and freely reproduced.

In 1970, [[Stephen Breyer]] argued for the importance of this model in "[[The Uneasy Case for Copyright]]".<ref>[[Stephen Breyer]]. [[The Uneasy Case for Copyright|"The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies and Computer Programs"]], [http://www.harvardlawreview.org ''Harvard Law Review''] 84(2) 1970.</ref>

The Street Performer Protocol was successfully used to release the source code and brand name of the [[Blender (program)|Blender]] 3D animation program. After [[Not a Number Technologies|NaN Technologies BV]] went bankrupt in 2002, the copyright and trademark rights to Blender went to the newly created NaN Holding BV. The newly created [[Blender Foundation]] campaigned for donations to obtain the right to release the software as [[free software|free]] and [[open source software|open source]] under the [[GNU General Public License]]. NaN Holding BV set the price tag at 100,000 [[euros]]. More than 1,300 users became members and donated more than 50 euros each, in addition to anonymous users, non-membership individual donations and companies. On October 13, 2002, Blender was released on the Internet as [[free software]].<ref>{{cite web |url=http://www.blender.org/blenderorg/blender-foundation/history/ |title=Blender.org history|location=Amsterdam|date=July 2009}}</ref>

Variations of the SPP include the [http://logarithmic.net/pfh/rspp Rational Street Performer Protocol] and the [http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/865/774 Wall Street Performer Protocol].

==Street Performer Protocol==
Street Performer Protocol is an early description of a type of threshold pledge system. SPP is the threshold pledge system encouraging the creation of creative works in the [[public domain]] or [[copyleft]]ed, described by Steven Schear<ref>Steven Schear. [https://web.archive.org/web/20040624034123/http://freedom.orlingrabbe.com/lfetimes/copyleft.htm "COPYLEFT: Rethinking Intellectual Property in the Digital Age"] ''Laissez Faire City Times,'' Vol 2, No 16, May 25, 1998.</ref> and separately by [[cryptographer]]s [[John Kelsey (cryptanalyst)|John Kelsey]] and [[Bruce Schneier]].<ref name="SPP"/> This assumes that current forms of [[copyright]] and business models of the creative industries will become increasingly inefficient or unworkable in the future, because of the ease of copying and distribution of digital information.

Under the Street Performer Protocol, the artist announces that when a certain amount of money is received in [[escrow]], the artist will release a work (book, music, software, etc.) into the public domain or under a [[free content]] license. Interested donors make their donations to a publisher, who contracts with the artist for the work's creation and keeps the donations in escrow, identified by their donors, until the work is released.

If the artist releases the work on time, the artist receives payment from the escrow fund. If not, the publisher repays the donors, possibly with interest. As detailed above, contributions may also be refunded if the threshold is not reached within a reasonable expiring date. The assessed threshold also includes a fee which compensates the publisher for costs and assumption of risks.

The publisher may act like a traditional publisher, by soliciting sample works and deciding which ones to support, or it may serve only as an escrow agent and not care about the quality of the works (like a [[vanity press]]). {{Citation needed|date=May 2012}}

==Ransom model in software==
In [[software]], [[source code escrow]] is a publishing model that applies the SPP to [[source code]] (often involving existing [[proprietary software]]) which is eventually released under an [[Open-source license|open source]] or [[free software]] license.

==List of threshold-pledge websites==
{{see also|Comparison of crowd funding services}}
* [[Community Funded]] - A [[crowdfunding|crowdfunding platform]]-oriented threshold-pledge website (threshold-pledge currently disabled) <ref> {{cite web |url=http://help-center.communityfunded.com/faq/support-types/|title=CommunityFunded.com FAQ|date=December 2015}}</ref>
* [[GlobalGiving]] - A project-oriented threshold-pledge website
* [[IndieGoGo]] - A project-oriented threshold-pledge website
* [[Kickstarter]] - A project-oriented threshold-pledge website
* [[PledgeBank]] - An [[honor system]] fund and release website
* [[Pledgemusic|PledgeMusic]] - A direct-to-fan music funding website
* [[RocketHub]] - An international project-oriented pledge website
* [[Sellaband]] - A [[crowdfunding]] music funding website
* [[Tides Center]] - A project-oriented threshold-pledge website
* [[Patreon]] - A [[crowdfunding]] platform providing "recurring funding for artists and creators"

==See also==
* [[Assurance contract]]
* [[Contingency market]]
* [[Copyright social conflict]]
* [[Crowdfunding]]

==References==
{{Reflist}}

==Further reading==
* John Kelsey and Bruce Schneier, [https://www.firstmonday.org/ojs/index.php/fm/article/view/673 The Street Performer Protocol and Digital Copyrights], ''[[First Monday (journal)|First Monday]]'' 4(6), 1999.
* Crosbie Fitch, [http://digitalartauction.com/history/essay.htm The Digital Art Auction] - March 2001.
* Chris Rasch, [http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/viewArticle/865/774 The Wall Street Performer Protocol], ''[[First Monday (journal)|First Monday]]'' 6(6), 2001. (tROT)
* [[Karl Fogel (author)|Karl Fogel]]: [http://questioncopyright.org/promise#threshold_pledge The Promise of a Post-Copyright World (Threshold Pledge System section)] - QuestionCopyright.org, October 2005

[[Category:Payment systems]]
[[Category:Copyright law]]
[[Category:Fundraising]]