Parsing the future of DRM and Internet-based media delivery and monetization

Parsing the future of DRM and Internet-based media delivery and monetization

Summary: Digital rights management is doing well. It’s alive and healthy. There was a general concern a few years back that the consumers wouldn’t adapt to paper-media-type experience online, and I think the ubiquitous nature of the iPod has proved that wrong. There are a lot of other great devices that are coming out, or have come out, with really solid content protection schemes in place that the studios are comfortable with.

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TOPICS: Browser
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Read a full transcript of the podcast. Sponsor: Akamai Technologies

Now that media companies are exploring Web distribution models and using new technologies, a great deal is being discussed about who controls what when it comes to content. Digital rights management (DRM) has its advocates and detractors, but some type of gateway for the management and monetization of content appears inevitable.

Business development officers at content-owner studios want a platform that has almost no royalty to it, and is ubiquitous. If you’re a technologist, or if you’re a company that needs royalties for your technology platform, you probably want to create a great technology platform that you can charge a royalty for, and potentially gain lock-in from. DRM is increasingly essential to both, but users need to be cajoled and not turned off by difficulty or mistrust in access and privileges.

At the least, regardless of the DRM stakes, the Web distribution of rich, digital content needs to work -- on time, every time. You can't charge for tickets for trains that don't arrive, or that only limp into an empty station hours overdue.

In the Internet media landscape all business models are up fro grabs, but how to manage their complexity of Web distribution and monetization? Join podcast host and moderator Dana Gardner for a discussion on the future of Internet delivery of media and entertainment with Tim Napoleon, media and entertainment product line director for Akamai Technologies.

Here are some excerpts:
Digital rights management is doing well. It’s alive and healthy. There was a general concern a few years back that the consumers wouldn’t adapt to paper-media-type experience online, and I think the ubiquitous nature of the iPod has proved that wrong. There are a lot of other great devices that are coming out, or have come out, with really solid content protection schemes in place that the studios are comfortable with.

If you’re a consumer, basically you want your favorite artist, music, title, in whatever format that you want it, wherever you want it, whether that’s on your TV, your PC or your iPod. There has been a willingness we’ve seen from consumers to pay for the same media across multiple platforms. It’s not uncommon for someone to buy the DVD as well as the iTunes download, as well as to go to the Website and watch the episode online.

All these different vehicles and delivery mechanisms aren’t necessarily taking money out of the studio’s pocket. They’re actually creating an additive effect. We’re seeing an overall trend. As you make this media more convenient and more usable, consumers are in a consumption pattern, and if consumption is going up, they’re using more of this media.

My sound byte there is: How long does it take to do a live event on the Web? Well, it takes about 10 years and 10 minutes. It takes you about 10 years to learn everything you need to know to do it, and about 10 minutes to actually do it. The learning curve is definitely something that Akamai can assist with when you want to monetize and bring your content online.

Studios have heart palpitations when they have to know how many DVDs to press, or how much physical inventory to create. With online and a scaleable system -- that’s variable capacity from Akamai -- you can scale it all up to billions of users, if you need to. You don’t have the physical cost of pressing a disk or having to forecast inventory. You never run out of it. A consumer never goes to store that doesn’t have the title they want to rent. The opposite benefit is that you don’t have a warehouse full of disks on your balance sheet account.

You’ve got just the right amount of inventory. It’s probably the one business issue that this solves better than anything for the studios -- having the ability to get into the hands of consumers hot content, and also capture a fragment of the market with maybe just a little bit of content. In the past, the distribution pipeline for projects that might not be mainstream didn’t find a voice.

People often call us the long tail of content, but really it’s having unlimited inventory and the ability to really let the consumers self-select from a very large library and filter that down to exactly what they’re interested in, and then order it. That’s just making people order and buy more media.
Listen to the podcast, or read the full transcript for more on DRM and Internet media trends. Sponsor: Akamai Technologies.

Topic: Browser

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4 comments
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  • Just a wordy Akamai ad...

    no new info here.
    Techboy_z
    • Not everyone gets DRM

      I beg to differ. The subject of DRM and media delivery business models is evolving
      fast. Many people are still gaining understanding. I think if you read the full
      transcript or listened to the podcast you may gain additional insights yourself.
      Dana Gardner
  • From what I've seen

    "There has been a willingness we?ve seen from consumers to pay for the same media across multiple platforms."

    I have to say I seen much the opposite. I know people who intend to buy the DVD who won't even go see it in the theatre because they only want to pay once to see it. Personally I'll go to a theatre and buy the DVD if I like the movie. To me the theatre isn't about the movie but more about the experience. Huge screen, getting out of the house, social activity, and that addicitve movie theatre popcorn.

    What I have seen is people buying a song or two off the internet then buying the CD but this is rare as P2P works better for than even though it is illegal. I know quite few I-Pod users who feel paying 99 cents a song is worth it as thier time ripping CD is worth more than 99 cents a song. So they will pay to get a download that portable rather than rip it themselves.

    I know I might watch a show on TV but sure won't pay to download. I might go that route if I dropped my cable TV subscription. I wouldn't pay twice like this as most times I'd rather buy the DVD box set. So paying 3 times is too much but twice, once to experience the show and once to own a copy is not problem.

    So what I'd have to say here is that there is wide range of consumers are willing to pay for. Best to strike good balance to maximize profits. There is risk of alienating a wide spread of consumers in an effort gain profits from a small group of consumers.
    voska
    • I agree...sorta

      I'm willing to pay to watch a movie in a theater and I subscribe to almost everything DISH Network has to offer, but I have never watched one pay-per-view. I already pay a small fortune for what few good shows are on now. I'm willing to pay for a CD OR I'm willing to pay for a download, but not both. If I purchase a CD I expect to be able to copy individual songs into a compilation to listen to in the car of off the stereo. If I download the music I expect to be able to listen to it on a player or copy it to a CD.
      DRM and the unethical practices of companies like Sony and their root kit have kept me from purchasing any music and no I do not download the free/bootleg stuff either.
      DRM is also the reason I will not be upgrading to Vista, but staying with XP Pro as long as it remains viable. That is 4 copies of Vista and 4 copies of Office they will not be selling. When they came out with the one time limitation on Vista I decided to try LINUX. I liked it and I'm converting my office and multi-media work to it. Windows will stay around for a few games if they ever fix FSX. They backed off on the one time limitation, but by then I'd already tried something else.
      So, in general I am only willing to pay for something once! I'd also like to thank MS for getting me to try LINUX.<:-))
      rdhalsteatzd