Kudos (contribution points) is a way to track your contributions to the collective and enable the success of one person to help others.
There are five ways to get kudos.
The most obvious way is by submitting a work which people buy. When someone buys a copy of your work, if it is something that costs money to reproduce, typically the price they pay is cost plus a percentage. The amount above cost goes to you - some may be redistributed as set out below.
If the work is something that costs effectively nothing to reproduce (such as an all-digital work), and you have not chosen to give it away, the full purchase price goes to you (again, portions may be redistributed).
Other members can also buy your works using kudos, and in this case it works just the same except that there is no money to be converted - the whole transaction is done in kudos.
You can contract with other sitemembers to do work for them, such as illustration or editing, in exchange for kudos at a rate you agree between you. Or you can agree to work for the opportunity to participate in the success of the work, giving you a "stake" in the work (see Stakeholding).
If you propose a person as a sitemember and they respond to the email we send them by signing up, with their agreement and the agreement of the creators of works they buy, a proportion of the kudos they earn and the kudos they spend will be redirected to you as the recommender. This is deducted from the profit of the creator of the work. Effectively this is our advertising budget.
You can buy kudos, either from each other or from the collective. However, to prevent kudos being used as a tradeable commodity like shares (in other words, to ensure that they are only used in the context of contribution to the community), if you buy kudos you can't sell those same points again. You can only spend or invest them.
You can also get kudos from sponsoring a project - see Investing In Projects.
You can use kudos in four ways, three of which correspond directly to the ways of gaining it.
You can buy other people's works using your kudos (as the whole payment, or in combination with money).
You can buy other people's services on your project as mentioned above. Illustration and editing are two obvious examples.
You can invest your kudos in projects - your own or other people's - which require funding upfront. Ideally, we would produce works "on-demand" with no upfront costs, but often this is not feasible or is more expensive than doing a short production run. Books and CDs, for example, are more economically produced in numbers of several hundred rather than one at a time.
There are also projects which require time, effort or materials upfront in order to come into existence - a film, for instance.
When you invest in a project, it is like any other investment in that you are not guaranteed to get a return. You are expressing your confidence in the project and helping it to come about. However, if the project does end up earning money (or kudos), a proportion will be returned to you as kudos. The return will include a bonus (equivalent to interest from a loan or a dividend from an investment), reflecting your stakeholding in the project.
In the case of a book, for example, suppose your investment funded the entire printing costs. As each book is sold, all of the printing costs of that individual book, plus a bonus, will be returned to you as kudos, until your full investment plus bonus has been returned. This will be when all the books have sold.
If you fund part of the printing costs, say 10%, and other investors fund the other 90%, everyone's contribution is returned at the same rate. That is, you will get 10% of the printing costs of each book back, plus 10% of the total bonus, as each book is sold.
The bonus is announced up front by the creator of the work.
You can sell kudos (turn it into money), either by trading among yourselves or by selling it to the collective. You can trade it among yourselves at any rate you wish, but the collective will always buy (and sell) at a rate of 100 kudos = 1 NZ dollar.
As mentioned above, only earned kudos can be sold - if you buy kudos, from the collective or from another member, you cannot sell the same kudos again. But if you invest the kudos in a project and get the same amount of kudos back from the investment, these count as different points and can be sold.
The underlying idea is that the money is not the main point. The main point is the purpose of the collective - "encouraging, promoting and enabling postindustrial creativity" - and the money is a means to that end. It's about making art out of money, not money out of art. But if someone is able to make money from their creativity and this enables or encourages them to produce more creative works, then that's a fulfilment of the purpose too.
A stakeholding is a participation in the success of a project. You gain a stakeholding by making a contribution to the project and, if it is financially successful, your stakeholding entitles you to a share in that success. Traditionally, only the people who have contributed money or have their names prominently on the work (such as authors or sometimes lead actors) have been seen as having a "stakeholding" that entitles them to share in the profits of a creative work. We believe, however, that everyone who contributes should have their contribution recognised by a stakeholding.
When the primary contributor of the work sets up the project for the work and asks for help with it, he or she can offer stakeholdings as an inducement to participate. Typically several "contribution categories" will be set up, each representing a named percentage of the (unknown) profit from the work. This prevents the contributor from inadvertently committing more than 100% of the profit. Contribution categories might include financial sponsorship, editing, acting, administration and so forth. Within each contribution category, there may be a number of people contributing. The percentage of the profit allocated to the contribution category will be split among these people on a monthly basis once the work is earning kudos. The person setting up the project can elect to have the members of the contribution category divide the kudos equally, or can allocate it to individual members in proportion to their contribution by any of several mechanisms (executive decision; voting systems; tracking systems of various kinds).
The concept of kudos is inspired by Cory Doctorow's "Whuffie", as featured in his science fiction novel Down and Out in the Magic Kingdom. Whuffie is a "reputation currency" (a conversion of the idea that "if you ain't got respect, you ain't got nothing" into an economic system), but it is also a kind of contribution currency. He doesn't ever explain exactly how Whuffie works, why you would give it to people (presumably it is some kind of social contract), or how giving it to people affects your own Whuffie, so the mechanics above are not from the novel.
Cory Doctorow's decision to make his novel's complete text available online also set off the chain of ideas which led to the creation of this site, so he is in a sense the unwitting grandfather of C-Side Media. He co-edits a site called BoingBoing, subtitled, usually accurately, "a Directory of Wonderful Things". Kudos, Cory.