Some of you youngsters may not remember what really kicked off the big "net neutrality" fight over the past few years. It was back in 2005, when then AT&T CEO Ed Whitacre suggested that internet companies should pay a second time to reach users. This was particularly nefarious. What Whitacre was suggesting was actually that AT&T get to double charge everyone. That's because the way it was (and still) is that everyone pays for their own bandwidth -- including the big internet services like Google. However, the way Whitacre was describing it, the bandwidth you got only paid for half the transit. That is, you only paid for your bandwidth from your premise to "the cloud" but not back out to any end machine. That that bandwidth was paid for by whoever owns those end machines was entirely ignored. So the plan was not just that Google would pay for its own bandwidth, but that Google would also pay for your bandwidth to get Google to your computer (ignoring that you already paid for it).

That didn't go over so well with people, and got particularly ridiculous when Mike McCurry, running an AT&T lobbying effort, insisted that Google didn't pay a dime for its bandwidth. For rather obvious reasons, he refused my proposition that he agree to pay Google's bandwidth bills.

Either way, it appears that the brilliant minds at AT&T have been trying to devise a new way to present such a plan that doesn't leave them so open to charges of being greedy double chargers -- and they may have found it by focusing on the mobile world, with their new love of "tiered" and "capped" plans that limit how much bandwidth you actually get. What they're going to do is charge app makers a fee to offer their services to you in a way that the data doesn't count against your cap. They describe it as an "800 number for the mobile internet."

"A feature that we're hoping to have out sometime next year is the equivalent of 800 numbers that would say, if you take this app, this app will come without any network usage," Donovan said on the sidelines of a mobile-industry conference here. It's far from clear how willing technology companies would be to pay wireless carriers for data use. Mr. Donovan said there was interest from companies who could use the feature to drum up new business from customers wary of using data-heavy services like mobile video.

This is nefariously brilliant. People associate 800 numbers with toll-free phone calls, so it's kind of like that... except it isn't anything like that at all. It's just a way to get companies to pay for the data connection you're already paying for. But the end result is exactly like what Whitacre wanted five years ago: get the app providers to pay double for bandwidth. Karl Bode summarizes the whole ridiculous plan as only he can (via that link above):

The end result is the same, with AT&T imposing bizarre tolls on content companies to obtain preferred customer status, picking winners and losers while retaining power in the wireless ecosystem.

It's an idea we're sure AT&T will pitch as a cost-saving endeavor for consumers, but given this is AT&T, you'd be naive to think cost savings will be in the equation. You'll still pay the same data rates, content companies will now just pay a fee to obtain preferred "reduced cap impact" status, then pass the higher development costs on to you. It's a ridiculous and dangerous idea, and the fallout will likely be similar to AT&T's "free ride" comments. AT&T executives either don't care how bad these ideas make them look, or don't realize it thanks to too many isolated meetings at headquarters packed with telco-think yes men.

Eventually you start to think that AT&T executives should just stop thinking before they hurt someone or themselves. If AT&T put half as much energy into running a top-flight network with quality support as they did cooking up hare-brained troll toll schemes -- they might just stop coming in last place in all major customer satisfaction studies.

This is really just another reason why the telcos are pushing so hard to move users into unnecessary tiered plans -- because they can't pull off scams like this on unlimited data plans nearly as easily.

These days, doing "crowdfunding" of music has become so commonplace that it's hardly worth mentioning any more, but it's still a bit new in other content realms. Reader Pat points us to the news that a new video game, Grim Dawn, is trying to fund itself with this kind of model. The game is a "spiritual successor" to Titan Quest, and has three tiers of support from $20 to $48. Basically, the more you pay, the earlier access you get to the game (alpha or beta stage). I'd be curious to see how well it works, but I'm not sure it really offers that much excitement. I could see big fans of the game really wanting to get in on the alpha, but I wonder if it's enough to really fund the game.

Chris O'Donnell alerts us to a post from someone who originally thought things like Trent Reznor's massively successful Ghosts I-IV business model experiment was a good thing, but who is now worried about the eventual consequences of somehow segregating fans. The argument is that only a small group of true fans will buy these really high end offerings, that include certain things that other true fans will recognize, making them part of an elite tribe. The fear is that these tribes will exclude those who don't pay up for the super duper deluxe versions.

It's an interesting theory, but I don't think there's much to support it in reality. First of all, as a recent excellent Hypebot piece explained, true fan tribes are nothing new, nor is the fact that many will shun outsiders or newbies until they've really shown themselves worthy of acceptance. So I don't see how this is particularly different. Also, a lot of these super deluxe packages aren't necessarily about stuff you can "wear" that would be noticeable in gatherings. On the whole, it just doesn't seem like that much of a problem. There will always be elitist fans and some will always snub less enthusiastic fans. I don't see how that changes now that those more enthusiastic fans have more ways to support the artists they love.

There have been a bunch of companies popping up lately that have allowed bands to help "pre-finance" an album, by getting fans to commit to pay up in exchange for some sort of added benefit. We've covered in great detail how Jill Sobule successfully used just such a method (on her own, not with a startup) to finance her last album. Earlier this year, though, the concept got a lot of attention when the group Public Enemy signed up with the company SellABand to try to raise $250,000 by the end of the year to finance its latest album. While we were impressed by such a well-known act trying such a system, we did note when it was announced that the "benefit" given by the group didn't really seem that compelling. The pricing seemed quite high for what people were getting, and there was little effort to actually "connect with fans." It was really just a very high-priced way of getting people to fund the next album.

So it doesn't come as much of a surprise that Public Enemy is struggling to reach its goal. It has raised over $70,000, which is nothing to complain about, but that's well short of the $250,000 goal.

There are definitely some important lessons to be learned from this. These sorts of models require a lot more than just putting it out there and expecting fans to automatically support you, no matter how big an act you might be. Jill Sobule worked really hard to cultivate and connect with her committed fanbase, and that's what helped her hit her goal. Public Enemy didn't seem to put much effort into that at all. Second, pricing really does matter. In giving people a "reason to buy" something, that doesn't mean you just slap a price on stuff. The price needs to be reasonable and make sense to people. Public Enemy's offerings just seemed pricey all around, even to fans of the group. At $100 you got a CD and a chance to buy a second CD at 50%, along with your name in a booklet? Eh. What's so exciting about that. At $250 they add in a t-shirt? That's $150 just for a t-shirt? You had to go all the way up to $500 before they would even autograph the CD. Sure, $1,000 for a 3 year unlimited backstage pass could be cool if you were going to see the band a lot, but that was the first offering that really seemed potentially worth the money for a serious fan.

So, I think there are some important lessons here. We've mainly focused on pulling lessons from the success stories, but the lessons from failures can be just as valuable. And, in this case, it goes back to our standard formula of Connect with Fans (CwF) and give them a Reason to Buy (RtB). Unfortunately, it doesn't look like Public Enemy really did much of either. They just expected the fans to come to them, and they priced everything too high, without giving really compelling lower end options. Because of that, they certainly got some people to pay up -- and, again, raising $70,000 is nothing to put down -- but it fell well short of the goal. In some ways, what they did is like a cargo cult: copying all the superficial aspects of what worked before, but not the really important stuff.

Writer Cory Doctorow has long been a leading thinker/experimenter when it comes to issues of copyright and content creation -- having long put his works under very permissive Creative Commons license, and making sure that his books were available in all sorts of different formats. However, for the most part, he kept using the same basic business model. However, it looks like he's jumping on board our favored "tiered" CwF+RtB model. Reader Russell sends in the news that Doctorow will not just be self-publishing his next book, but is also offering various "tiers" for support. The ebook and the audiobook will be free, but the physical book will cost money. On top of that, there will be a limit of 250 specially bound limited edition hardcover versions for $250. He also sold a $10,000 commissioned story, which was already sold before he announced this (he thinks he priced it too low). Finally, he may experiment with ads in the book as well. It will be interesting to see how well this works, though I think the tiers could include some more options/creativity, as most people don't have many options outside of the basic book. Still, it's great to see these tiered direct-to-fan CwF+RtB offerings getting closer and closer to being mainstream.

Another day, another example of content creators embracing the business models we've been talking about -- and once again, this one is outside of the music industry. Recently we wrote about movie makers picking up on tiered funding offerings, similar to what Jill Sobule has done, and now we've got a budding author as well. To be clear: I'm absolutely sure there are others doing this as well, but I just heard about this particular example. Elinor Mills has the story of an author, Robin Sloan, who has apparently put some popular short stories that he's written online for free. But now he's trying to write a whole book. But rather than go the standard route, he's self-funding and then self-publishing the project, and like Sobule, Josh Freese, and many others (um, including us!), he's offering various tiers of benefits that you get for support:

Pledge $3 or more
DIGITAL PACK. Get a PDF copy of the book and follow along with behind-the-scenes updates.

Pledge $11 or more
PHYSICAL PACK. All of the above, plus get a physical copy of the book. (The more people who choose this level or higher, the better the book is for everybody!)

Pledge $19 or more
SINCERITY PACK. All of the above, plus your book is signed, and it comes with a little surprise.

Pledge $29 or more
PATRON PACK. All of the above, plus your name (or secret code-name) is listed in the acknowledgments.

Pledge $39 or more
SUPER OCCULT VALUE PACK. All of the above, plus get three more copies of the book (for a total of four), so you can give one to a friend, donate one to the library, leave one in a coffee shop with a line of hexadecimal code scribbled across the title page...

The cool thing? At the time I'm writing this, the last one had the highest number of buyers, and the cheapest one had the lowest number of buyers. And yet the Hollywood lawyers of the world insist that people just want to get stuff for free. Not true. Provide them real scarce value and people will buy.

I have to admit, these days, we're getting overwhelmed with people submitting really cool, unique and fun business models being done by various creative folks. I simply can't post all of them, but will try to dip in and post a few examples here and there. Scott Walker points us to some info on a "crowd-sourced" film called Artemis Eternal, where they're offering various tiers of support -- similar to what we've seen with Josh Freese, Jill Sobule and others. But, since this is a movie, rather than music, the things you can get are even more integrated into the movie -- such as the ability to appear in the movie itself, including the marketing of the movie (being on a billboard for a month in LA) among other things. Of course, with something like this, you'd have to imagine there's a risk that the movie never actually gets completed, so it's a bit more difficult to pull it off. But, still, should be a model worth watching to see what happens.

Also in the movie space, Joshua Jones sent in (a while back now, sorry) the fact that the folks behind the movie Visioneers took a different sort of approach as well. Rather than freaking out about "piracy" or people watching the movie in their homes, they realized that obscurity was a much bigger problem than "piracy." So they asked people to host their own screenings -- and even said it was fine for you to charge people to attend. Oh, and if you sent in photos of the screening, you had a chance to win a contest. Again, this isn't a huge step, but it is a neat little promotion, showing that there are unique ways to get some additional attention for your creative efforts, and have the fans help you in the process.

Every time we discuss musicians or smaller labels that seem to be figuring out how to embrace modern business models by connecting with fans and giving them a reason to buy, we're told that the model doesn't really work beyond a few small "exceptions." Yet, pretty much every day we keep getting sent more and more examples of these "exceptions." At some point we have to wonder what it will take for the disbelievers to recognize that it's not the exception at all. It is the rule.

The latest comes to us care of GrindEFX, who notes that Jack White (of The White Strpies and the Raconteurs) and his own label, Third Man Records, is offering a nice two tiered subscription service, where fans get extra benefits for being members. To be honest, this sounds an awful lot like the business model that we discussed way back in 2003 (and were told it would never work). It's interesting to see this done at the "label" level, where you get benefits from multiple bands on the label. That could definitely work for a label with a lot of bands that have similar sounds that fans are likely to enjoy across the board.

Anyway, we await the explanations in the comments for why this, too, is an exception and why this business model will never work for others.

We've certainly talked a lot about the various ways that Trent Reznor has been exploring creative new business models that center around connecting with fans and giving them a reason to buy, but he's now using the same concepts to try to help save a life. On Wednesday, he announced a program to get people to donate money to help Eric De La Cruz get a heart transplant, whereby people who donate certain amounts to the cause will get to hang out/meet with Reznor and other band members during his ongoing tour involving both Nine Inch Nails and Jane's Addiction (which, by the way, hits Silicon Valley tonight, for those in the area -- though, they're not accepting any more donations for people going to tonight's show). As with the Ghosts I-IV model, there are different "tiers" of support available. In just two days, he's been able to raise nearly half a million dollars, once again showing the power of having a strong community and trying to do something good with it. It will be fascinating to see if there's more that can be done along these lines in the future as well -- turning some of these business models into helping out those in need.

Just as the various broadband providers are ramping up their bogus astroturf attempts to convince the world that broadband caps are necessary and good for customers, Saul Hansell has been digging deep into the numbers and can't find any justification at all for the caps. All those stories about overwhelmed networks and exponential traffic growth? Not happening. If anything, the evidence is that the opposite is happening: advances in technology means that it's become cheaper for broadband providers to meet the needs of their customers. And those needs are growing, but that growth rate has been slowing, and is quite manageable. So, basically, the broadband companies are hyping up a problem that just isn't there. There is no crunch. There aren't bandwidth shortages that require cutting off heavy users. The only reason to set up such tiers is to squeeze more money out of customers without providing any improvements in service (actually, while providing less service). And it's all possible thanks to the lack of competition in the marketplace.