Risks of crowd sourced creative work

So you get home with Uber, booked your last holiday on Airbnb and are delighted with the barely used bike you picked up for a song on eBay. Having got comfortable using peer to peer marketplaces in your personal life, why not source professional services for your business using sites like using airtasker.com or freelancer.com?

"Disruptive" businesses

Some of these new marketplaces are successfully offering what people want, whether that is a better deal, more choice or greater flexibility. A recent Choice comparison of Uber and taxi services found Uber was 40% cheaper and had higher scores for overall experience.

Calls for greater regulation of these services have been made to avoid unpleasant surprises, such as the family who reportedly discovered the holiday house they had rented through Airbnb was targeted in a drug raid. Despite the headlines, it seems the peer to peer marketplaces are booming. The NSW Government has announced it is embracing the collaborative economy citing research that it contributed more than half a billion dollars to the NSW economy last year.

Are cheap services worth it?

Before you engage professional services for your business it is worth being aware of the potential risks. A client recently discovered the downside of crowd-sourced graphic design work when they commissioned a logo for a new business from one of the websites which host design contests. Designers worldwide can submit designs to fulfill a design brief in the hope of winning the work.

Having set up the business our client was informed the new logo allegedly infringed the intellectual property rights of a local business.

None of the options were palatable. They could:

• engage in expensive litigation to dispute the alleged infringement;
• make a claim against the crowd-sourcing website whose contract limits its liability to refunding the price if a winning design infringes a third party's rights;
• track down and sue the designer who is located overseas; or
• avoid a dispute and start against with a new logo.

Getting back the money paid for the design is only a fraction of the true cost, disruption (and delay) involved.

Things to think about

Before you commission creative services through a system that relies upon speculative submissions have a think about the risks. 

• What are the consequences for your business if you have to replace the final product?
• If there is a problem, what rights do you have against the crowd-sourcing site. Is it limited to your money back? Will that compensate you for the time and consequential losses ?
• Do you know the identity and location of the service provider. Will you be able to take action against them if there is a problem?

If you expect people to pay upfront for your best work, why do you expect others to act differently?

Have a question about this? Please get in touch with Fiona McLay at [email protected] or 02 9231 2466.