The threshold pledge or fund and release system is a way of making a fundraising pledge as a group of individuals, often involving charitable goals or financing the provision of a 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, keeping the donation in an escrow fund. When the threshold is reached, the contributions are retired from the escrow fund and a contract is formed so that the collective good is supplied.
This system is often applied to creative works, both for financing new productions and for buying out existing works; in the latter cases, it’s sometimes known as ransom publishing model or Street Performer Protocol (SPP). Sometimes contributions are refunded to the donors if the threshold amount is not reached as of some expiration date, and no contract is signed: this variation is known as an assurance contract. Contributions to an assurance contract may also be collected as pledges which are only called-in when the threshold is reached.
Street Performer Protocol is the origin of the threshold pledge system. SPP is the threshold pledge system encouraging the creation of creative works in the public domain or copylefted, described by the cryptographers John Kelsey and Bruce Schneier (although the underlying idea is much older). 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 SPP, 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 only serve as an escrow agent and not care about the quality of the works (like a vanity press).
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. 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.
The Daily Omnivore 
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