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Web Extra: Super-Distribution Turns Pirates Into Friends

CIO Insight - October 11, 2002

In the post-Napster world, companies outside the entertainment world are investigating the use of digital content controls to protect data and create buzz for new products. CIO Insight Copy Chief Debra D'Agostino spoke recently to Scott Burnett, director of marketing for IBM Digital Media, about the use of digital content controls as marketing tools.

IBM is taking a lead in developing digital content controls designed to both fend off pirates and attract new customers. Why is this significant?

The philosophy behind our digital rights management technology is what we call "super-distribution"—allowing for content to be wrapped and rights to be ascribed to the use of that content as it travels over the Web—not just for music, but for any media type.

How do you think this technology will shape the market in the future?

Digital content protection in the digital age can provide for whole new opportunities for business. For instance, in the consumer world, there's a thing called super-distribution that is associated with CRM.

Let's say you and I download a piece of content. I download something I paid for and I send it to you. But it has super-distribution rights associated with it. You can access that file, but you may play it and review it once or keep it in order to get a taste for it, and then it allows you to separately license it for your own use.

That's what we call "super-distribution." It's almost like viral marketing in the consumer world. If I am able to provide a solution that allows these peer-to-peer networks to distribute these files and share them and pass them around, but do it all within a secure environment so that the content is really protected and I do have an opportunity for revenue, wouldn't that be something? That's where it's heading.

Right now, the way we discover music is we hear it on the radio or someone tells us about it. There's a lot of, "Hey, did you hear that new song from Oasis?" "No, I didn't." "Oh, it's on XYZ album." And then people start hunting and searching for that content. With this new technology, you can hear the music, and at the point of you being able to hear it, you can share it—but share it in a secure fashion. If you're able to do that, you're able to tap e-commerce into that sharing.

Most recently, in Europe, we tested our super-distribution strategy with a promotion for a new release from Oasis. The band was looking at how to use DRM to compliment existing business. IBM assisted them in producing two million CDs that were distributed in the London Times.

The CD had three song clips that people could play on their normal CD player. It also had additional protected content backed with the technology's security measures, which allowed only a limited number of plays if users put the CD into their computers.

The promotion tied together content from the artist, never-before-released content—both video as well as music—and that was protected with DRM. Via a link to the band's Web site, it also provided the user a chance to preorder the CD; the album was not out, so this was kind of a promotion from HMV, the retailer.

How Distribution Works

So fans got this CD, and they could only play it a certain number of times on their computer and they couldn't distribute it online, but they could go to a Web site and order it online?

That's right. And this turned out to be one of the most successful promotions that the Sunday Times has ever done. If you think about it, there are a number of benefits from this promotion.

The Times was looking for additional subscribers and readership to their Sunday newspaper. They had one-point-something million. They were able to increase readership of this newspaper with that promotion because people wanted the CD. The band, Oasis, got what it wanted because it was able to create a buzz for their upcoming release to stimulate demand for preordering the album. The retailers benefited because they could connect to the consumers online to preorder the CD.

Look at it this way: Industries today have been embroiled in policy issues having to do with rights and issues of digital media and this whole MP3 phenomenon and peer-to-peer file sharing. Congress is looking at the various legislative activities that are being proposed.

In the meantime, we have been very busy working with the industry on this technology, especially with how would you protect and ensure rights management and legitimate licensing of the content in this digital domain, knowing that over time there will be standard policies that will exist for which the technology will, in essence, be a slave.

So what you have here is a bit of the chicken and the egg. You have to have business models, you have to have prescribed conditions, and the aim of technology is to carry that out. How many copies can I make? Can I move from one device from another? All that kind of stuff. There's a multi-hour conversation we can have about that.

Creating Cyber-Salespeople

So you can actually turn file-swappers into cyber-salespeople, boost profits and gain information on those new customers as a result?

That's exactly what I am talking about. All the files that can be shared actually have a way to be tethered to e-commerce, tethered to a commercial relationship. Because the files that are shared today are free, there's no tether to commerce.

How might other companies across other industries use this technology for e-commerce?

Think about it from a corporate communications perspective. If I am able to super-distribute a video presentation that can be tethered to a tracking or audit system internally within my company, I am now able to manage where that content goes. I may be better able to better manage to those who receive the content.

If I send out a broadcast and I don't know where it goes, I may want to be able to tap that recipient with additional follow-up information from that broadcast, but I don't know who they are. So by being able to securely distribute content and track it, it provides for new opportunities. For both businesses as well as those who are distributing to consumers.

That sounds like it gets a little into privacy issues.

Yes, it's part of this whole thing, the ever-evolving policies, especially with privacy and all that kind of stuff. You know, that's what we're all in the middle of. These things may not have been completely reconciled in the digital domain, like how content should be shared, where privacy begins and ends. Privacy is where there needs to be a hand-in-glove relationship with technology and policy.

The way IBM looks at this is very clear. Technology is there as a tool for business and in many cases, technical capabilities get ahead of policy, and that needs to be reconciled, but the purpose is to be subservient to business. And in a case where technology gets ahead of that, you'll notice the pain. With dialogue or discourse associated with violating that policy. And then it has to catch up. We're going through that now, we're all kind of watching it. Ultimately the business needs to drive the technology. Not the other way around.

Beyond Entertainment

What companies outside the entertainment industry are already using this technology to experiment with super-distribution?

The very reason IBM set up the Digital Media Group, which I am in, is to go across industry—to take a lot of the things we have been working on in the media industry and look at how that is going to transcend all industries. Because media is media—whether it's for business or entertainment, there is a common element that has to be addressed. So what we've done is taken the next step to create this platform framework called the Digital Media Factory.

The DMF, in essence, enables the IBM e-business infrastructure. You see the "e" in our commercials, allowing for media to flow freely through the e-business infrastructure and IBM middleware, for which DRM is just one part on an open framework that we have evolved. There are no standards for DRM that are being reported right now, but we are anticipating that those standards will plug into the framework.

Consider the healthcare industry. If you look at the secure distribution of health records for MRI, for X-rays, there are imaging opportunities there for DRM and solutions it can provide. For wireless, there is an announcement we made with Nokia. Nokia is plugging in its server to our DMF for content to be secured and distributed to wireless devices. Content could take the form of music or video clips, or it could be business content and the sharing of a graphic-rich file or video.

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