Share the Wealth
Clearly, putting more control in the hands of artists and authors lays the groundwork for a digital content economy that is going to be radically different from today's marketplace, but why should it stop at artist empowerment? At the Fraunhofer Institute for Digital Media Technology in Germany, developers are committed to enabling an open-source approach to content creation and distribution that actively involves communities.
The PotatoSystem allows artists to create and sell content bundles directly to fans from a URL. It does this by providing artists with an iFrame that includes metadata on music and a link for pre-listening for their Web sites. Buyers receive a link displayed in the browser which they can click to download content. They can then pay for the purchase using a variety of mechanisms including credit cards, direct debit, and bank transfer.
However, users don't only buy content; they purchase the right to redistribute it to other fans and across devices. More important, users who register to buy music from the PotatoSystem can also register to become content resellers and super-distribute the music via blogs, Web sites, and mobile phones. The PotatoSystem is designed to track the chain of super-distribution and automatically transfer 43% of the content price to the artist. It also rewards all resellers with 20% of the revenues when they send it to a friend. An additional 15% of revenues is split between the original resellers as an incentive to distribute it to as many people as possible.
To date, the PotatoSystem counts "140 artists in the system and is in discussions with many more," according to Juergen Nützel, CEO of 4FriendsOnly.com, the company that developed and now distributes the PotatoSystem. But the real power of the PotatoSystem will become clear when it releases a technology (now in beta) that will enable users to buy and share content using mobile phones. "It will be like Amazon.com," Nützel explains. "Only our service won't recommend similar content; it will connect users around that content."
When users purchase music, the PotatoSystem will give them the option to communicate with other users who bought the same music and even play the music they purchased over the mobile phone during group discussions. "Content distribution and viral marketing is only a part of what PotatoSystem enables," Nützel says. "We are more interested in user-matching and providing the tools to bring people who share the same passion together in a vibrant virtual community."
Long Live The Niche!
The physical world puts serious limitations on the amount and variety of content available. From the cost of shelf space to the vested interests of media companies to push the content they spent the most to produce, the supply of content has traditionally been influenced by factors far outside the realm of consumer tastes. But the online world thinks little of appealing to the lowest common denominator. It's a space where users can search for alternatives—and find them.
"The Long Tail," a much-quoted article that appeared in Wired last year, illustrates how even obscure content can find a loyal audience somewhere on the Web. This phenomenon is both exhilarating and frightening. It shows that niche and user-created content has a bright future. It also portends hard times for many major content companies that built their business models on the belief that size and market muscle are prerequisites to successful creation and distribution.
Indeed, the Internet allows all content creators to participate in a new kind of content bazaar—and make money—provided they have the right tools. This is where technology companies come into play. Their toolkits and platforms will empower user groups to become open-source content communities that will develop and distribute content themselves.
Like most things, however, technology alone will not tap into the do-it-yourself content distribution stream. Organizations must also try to understand the mindset of many Web content users. Companies can prosper if they provide tools and platforms that support the proliferation of new open-source content communities and share their commitment to a universal information exchange. Organizations may also have to do some much harder thinking about copyright and patent law, but as MIT's von Hippel points out, the result will be a "bigger and better pool of knowledge because user communities with good ideas the world over will be able to contribute."
Sidebar: Expand Your iSphere of Influence
Essentially, content super-distribution is about free availability of content. But whether it's online or via wireless networks, there's a catch: bandwidth is not free. Users pay for the transmission and can rarely purchase the rights to access content across multiple devices. One way to circumvent this problem is by using Bluetooth, a short-range technology found in roughly 70% of mobile phones on the market today with a reach of between 10 and 100 meters, depending on the environment. Using Bluetooth reduces communications costs to zero, making it an optimal solution for on-location content distribution.
Using Bluetooth, consumers can receive content on-the-go, whether it's movie trailers delivered to their mobile at a film premiere, book reviews beamed from Borders, or music snippets and merchandise offers distributed by a local band. This is the vision of a group of developers and scientists at Jubik in Germany. The start-up company—one of the country's most promising, according to the Federal Ministry of Economics and Labor in 2004—has developed iSphere, a platform that uses a commercial Bluetooth transmitter supplied by Denmark's Blip Systems to enable interest and location-based content delivery.
iSphere can deliver content at roughly broadband speed, making it possible for users to download an MP3 music file in around two minutes, according to the company. Moreover, the platform also provides Web tools to administer mobile marketing efforts or content distribution schemes over a range of pre-defined touch points.
However, the newly released version 2 does more than push content to phones. Users can choose to download the software to their phones and store personal preferences within the application. "This insight into users' preferences assures that what content providers offer and what users want is a perfect fit," explains Laurenz Lenkewitz, Jubik's head of marketing & business development. Moreover, he says, it encourages community, since users can opt-in for alerts when people who match their profile are nearby.
Jubik, which formally launched the iSphere platform in March, will first focus on distributing the solution for mobile-marketing campaigns at popular venues and independent cinemas. The company already has received interest from companies in Sweden, the U.S., and posh shopping mall owners in Dubai. Jubik has also introduced a rental package beginning at €2,000 to allow small content owners to beam content and marketing messages during live events.
Looking ahead, Lenkewitz says Jubik has plans to introduce a P2P content identification system to transform informal information exchange into a compelling business model for content providers concerned about Digital Rights Management (DRM) issues and control the distribution of more valuable content. To this end, Jubik will tag each piece of content with a unique ID. "Enterprises are also taking notice," Lenkewitz adds. "They understand that P2P communication and information exchange could improve knowledge distribution and management and mean a new kind of personal communication."
Companies Featured in This Article
Blip Systems www.blipsystems.com
Eric von Hippel Democratizing Innovation http://web.mit.edu/evhippel/www/books.htm
The Music Engine www.themusicengine.com