Digital rights at issue in new wired world

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The recent media tonnage devoted to copyright issues and Napster/MP3 reminds me of the old saying about winning the battle while losing the war.

I'm not advocating that the creators and producers of intellectual property not be rewarded for their efforts. I strongly believe, however, the emphasis should be on developing and actually launching new business models that both benefit copyright owners and provide consumers with the content they enjoy in whatever method they most suitably can get it.

Some people see digital rights management systems as the solution for secure digital distribution of music, film, video and book-like content. They are correct to a certain degree. Effective DRM platforms and services will encrypt or watermark content so it can be tracked throughout multiple travels over the expanding digital superhighway.

So we now have a toll road in place. But where's the toll collector?

One of the main reasons Napster, Gnutella and the like have prospered is that the generation most benefiting from these new millennium services is quite accustomed to the ways of the Net. To date, few consumer products companies and advertising agencies have fully grasped the rules of this free-wheeling environment.

FREE VIA CYBERSPACE

What the Internet-centric generation understands is that almost anything you want can be found in cyberspace, and much of it can be obtained for free. Due to the interconnected, viral nature of the Web, the friends and family of these users don't have to go to Tower Records or Blockbuster to enjoy entertainment. They have it e-mailed to them -- free.

This is where the other half of the DRM sphere needs to receive immediate attention from content copyright holders. They should be focusing on business models that embrace flexible consumer usage and payment options.

In today's instant-gratification world, consumers not only want flexibility in content offerings, they demand it. They will want to access content via multiple, innovative pricing options such as subscription, pay-per-view, rental, outright purchase, pay-for-play or combinations of these. Rather than buying the whole CD, they also want the ability to take selected tracks or only the flip side.

Even most Napster users -- some 71% according to a Webnoize survey -- would be willing to pay a monthly charge for access to the fast-growing service's music community. That's because they can get what they want served in the on-demand style in which they like it.

DIGITAL RIGHTS MODELS

DRM providers are working on other business models that would allow both entertainment consumers and providers to meet halfway. In the near future, it is anticipated that DRM will allow advertising, marketing and sales campaigns to be conducted using methods not currently available.

It is conceivable that an Internet company will have the ability to regularly alter promotions once a week or even more frequently. These promotions may even be tailored on a demographic or geographic basis triggered by information provided by the user as the "password" to enter the page or site.

KEEP FLEXIBLE

Also, marketers and their agencies can potentially benefit from personalized subscription or advertiser-supported models that allow for the development of highly targeted one-on-one marketing and promotional campaigns. Keeping flexibility in mind rather than legal tender, the form of currency might take the shape of data collection.

For instance, one model might be based on usage for a swap of information. Consumers get to play the new 'N Sync single five times for no fee. Instead, they need to answer a handful of questions about their music interests or the types of beauty products they purchase most often. And, further, marketers will have the ability to serve up a relevant ad on the spot.

Based on real-time market information, online retailers will have the option of raising or reducing content prices. If it makes sense to discount a product that is no longer a hot commodity, companies will not only have the data at hand to make an intelligent pricing decision, they will also be able to implement it almost immediately.

I believe, with appropriate DRM in place, the opportunity side of the digital equation will become a very bright one for content owners and ad agencies alike. Moving forward, significant new opportunities to mine original and repurposed content are continually presenting themselves. Tomorrow, secure migration of content assets via multiple channels -- cable, fiber-optic, satellite or on portable and wireless devices -- will become commonplace due in large part to digital commerce solutions that are being developed today.

Taking a closer look into the crystal ball, it is not hard to see users becoming the driving force of a super distribution channel. With a digital financial clearinghouse supporting this channel, users can legally pass content to many more users, thus creating a new revenue-producing, promotional message-delivering mechanism fueled by quantifiable micro-transactions.

After all, rather than injunctions and appeals, isn't this particular war really played for profits and eyeballs?

Mr. Kassan is co-founder and president, media/e-commerce, of Massive Media, Los Angeles, a digital commerce company, and former president-vice chairman, Western Initiative Media Worldwide, an Interpublic Group of Cos. unit.

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