My Simple Minded World

A new model for digital media

Posted in business by Omar Ismail on March 17, 2008

I’ve come up with a model that movies studios, consumers, and technology providers can live together in harmony.

Each party is responsible for their core competency, you don’t have inefficient redundancies, profit will increase, and consumers won’t be screwed.

Let’s examine what each party offers.

Movie studios – they are the content producers and IP holders.

Content Delivery – iTunes, Xbox Live Marketplace, Blu-Ray discs, DVD discs, Amazon Unbox, etc… all of these are just delivery mechanisms to get the content from the studios to where you can consume it.

Playback device  – Xbox,  Computer, Set top box, AppleTV, etc

The problem with the traditional model is that everything is bundled into one service. Xbox Live Marketplace and iTunes are perfect examples of this. When you rent/purchase media from these services you have to buy the IP rights from them, you have to use their delivery mechanism, and you have to use their playback device.

My proposed model decouples everything.

1. Let me buy the IP rights to watch the media in any way that I choose.

2. Let me use any delivery provider I want.

3. Let me consume the content on any device I want.

There’s already a lot of literature on points 2-3, so I’m going to focus on point 1-2. If I’ve already bought a DVD, I’ve paid for the IP rights to that movie, so why should I pay for those exact same IP rights when I buy a movie from iTunes? Make buying the IP rights a one-time deal. Let me take those rights with me to different providers. If I own a view-license then let me download the movie on Live Marketplace for my 360, let me download it on iTunes for my computer, and I’ll pay for the delivery SERVICE, but I won’t pay for the rights multiple times.

Have content producers compete on the CONTENT.

Have delivery services compete on the SERVICE and not the content.

Have playback devices compete on the PLAYBACK and not the service.

If we focus the competition then the space will innovate at a rapid pace. If we don’t price gouge the consumer they’ll be willing to pay for the content in a lot of different ways that is convenient for them.

We’re already seeing some movement in this decoupling.

There has already been some decoupling in the delivery mechanism and playback space. Amazon Unbox is playable on TiVO devices, Xbox 360/PS3 will play downloaded content (usually pirated).

Some new DVDs contain an iTunes digital file unlock code so you get the iTunes movie along with the DVD.

This is the way of the future.

Implementation

In this digital world, implementation is actually quite easy from a technical perspective. Follow the credit card model. Use a centralized licensing database. Give me some security credentials that are tied to an account that stores and tracks which licenses I have access to.

I can purchase these licenses directly from the movie studios, from the delivery providers, from resellers, whoever. Then I use those credentials with a delivery service who checks the database to verify I have the rights before sending me the content.

Criticisms

1. Too complicated – for the average person giving them direct access to these concepts would prove too much I agree. But let’s give people some credit. I’m confident that an abstraction layer on the interface could hide the underlying mechanisms so everything works seemlessly. This would be difficult, but would definitely be worth it. A model like this lives or dies on ease of use for the consumer. Though the decreased costs should give some leway of not being perfect.

2. Using a centralized mechanism – in general yes these are usually best to be avoided. But come on, centralized databases aren’t inherently evil in themselves, and are sometimes the preferred design approach. Having a 3rd party handle the licenses lets it be regulated, reduces the red tape that everybody has to go through, and should be a non-profit industry entity like exist with web standards. The benefit is that movie studios only deal with one entity, and content deliverers only deal with one entity. And make it an international body to make things REALLY easy.

3. It won’t happen – if this model results in more money for everyone, then it will. It will take a major force to create though. A company with vision, and the resources to make a big bet. Apple is too much in bed with the media. It’s too innovative for Microsoft, and the natural trust issues. Media companies won’t have the long-term vision. The best bet is on Google, since they’re all about platforms now.

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