Super-distribution: Sharing in the Age of Mobility
Share and share alike.
Most of us have grown up with the concept that sharing is a good thing. The right thing to do.
As children, when our parents bought us candy we were taught to give some of it to our brothers and sisters. As we matured we let our neighbors use our lawnmowers, our friends borrow our expensive jewelry for parties and even gave away our automobiles to our sons or daughters - for keeps! - because, after all, we owned them.
Today, technology offers us even more ways to share: Online. The Internet enables us to post our thoughts in weblogs, our photos in albums and moblogs, our voices in podcasts, our visuals in video blogs and our items for sale on auction sites.
What is ownership?
Ironically, the same technology that offers us so many ways to share and buy also makes "ownership" more complex.
If you own an audio CD, may you legally give it to someone else to keep? What about if you rip that CD and give it - for free - to someone else? What if you own an electronic book and e-mail it - once again, for free - to a friend or business colleague to read?
What exactly do you own? Share and share alike is getting much more complicated in the digital marketplace. But it's also getting more interesting.
It's especially interesting in the wireless environment where the concept of sharing is evolving into the concept of super-distribution. Very briefly, super-distribution is sharing content combined with digital rights management (DRM) to benefit consumers, the wireless industry and content companies.
The concept is relatively simple. The execution, however, is not.
Super-distribution defined
Super-distribution (also spelled "super distribution" or "superdistribution") is wireless subscribers sharing their favorite content - such as music tracks, podcasts and videos - with others, whether it's a friend, a relative or a group. "I really like this ringtone/song/video. Why don't you listen to/view it?"
The sharing can be, for example, transmitting 30 seconds of a song or the complete track, which the other person (or persons) may listen to. The audio file incorporates rights management. Based on the DRM, the person receiving the file may listen to the 30-second preview several times, an unlimited time for a day or two or perhaps even indefinitely.
If the recipient wants to hear the entire track, he or she would, typically, have to purchase it.
"It's a terrific application," says Mark Lowenstein, managing director of the consulting firm Mobile Ecosystem. "I'm in a club, download a song and think there are five friends that would be interested in hearing it. I send them a link and they have the opportunity to buy it," he notes.
Another feature within super-distribution is "gifting," where the sender pays an extra fee to share the content with a recipient (or recipients) who may listen to the song or view the video for free.
Consumers as retailers
American Greetings Mobile views gifting as "the next generation of the marketplace," says Brian Biniak, senior vice president and general manager of the company, a major provider of wireless content. "Consumers are retailers and need to share content with each other, and in a way it can be monetized, unless it's content they've created," he says.
Based on a survey by INDICARE (Informed Dialogue about Consumer Acceptability of DRM Solutions in Europe), an organization funded by the European Commission, more than half of cellular users would pay 1 euro (about $1.18) for the ability to share a song through previews or gifting, rather than 50 euro cents to own a song without the super-distribution capability.
Sharing can be accomplished in several ways: Via local area networks, such as with Bluetooth, or via wide area cellular networks where the sender and recipients would be on either the same network or on multiple networks. Some wireless observers consider the super-distribution concept to include memory cards that contain free previews of content that may be purchased.
Melodeo, a wireless platform company now specializing in music and podcasts, already has software to enable sharing on the same cellular network via Bluetooth, says Stan Sorensen, senior director of product management and marketing. With Melodeo's platform, the entire song is transmitted via Bluetooth, but the preview offers a 30-second snippet.
In order to hear the entire song the recipient needs to purchase it, which unlocks the associated DRM. "Operators have been enamored by that feature because it's the first thing they've seen to make their customers into their sales people," says Don Davidge, who is no stranger to selling as Melodeo's senior president of sales.
Super-distribution and DRM
The primary content for the immediate future is ringtones and songs. OMA's DRM 1.0 already is being employed for music super-distribution in Japan and Europe, according to Willms Buhse, vice chair of the Open Mobile Alliance (OMA) standards organization, and director of products and marketing for the mobile DRM company CoreMedia. The standard enables content previews and sending links with its forward lock DRM capability. The super-distribution offerings in Asia and Europe have been, so far, a soft launch, he notes, and there hasn't been much publicity. Cellular operators are just beginning to see a critical mass of their subscribers who have handsets with OMA 1.0.
One exciting aspect of super-distribution is the ability to offer loyalty programs where subscribers receive a gift or discount if recipients of the shared content purchase it. If the sender transmits a preview and the recipient (or recipients) decides to purchase the entire song, for example, the sender could receive loyalty points, notes Davidge.
Melodeo hasn't yet built a loyalty program into its platform, but Davidge and his company's potential customers - the cellular operators - think it's a good idea. (The OMA's DRM 2.0 facilitates loyalty programs.)
Podcast sharing
Melodeo sees sharing of podcasts as a great way to generate excitement about super-distribution. Podcasts, by definition, are meant to be shared. But they also are typically meant to be free. So where's the money?
Sorensen says distributing podcasts is a way for cellular operators to sell more flat-rate data plans. With literally thousands of podcasts available to cellular subscribers, purchasing a plan for unlimited data use makes sense for many users.
Although podcast audio files might seem as if they would require long download times, Sorensen says many of today's cellular networks provide sufficiently fast data rates. Indeed, Sorensen says he downloaded a technology podcast that's almost 30 minutes and almost three megabytes in about five minutes using Cingular Wireless' GSM GPRS network in San Francisco.
(The podcast, by noted technology analyst Phil Leigh who runs "Inside Digital Media," just happened to be an interview of Sorensen.)
Video files - whether they are video podcasts or television programs - also could be part of the super-distribution mix. However, the size of video files is, obviously, huge compared to ringtones, music tracks and podcasts. Cellular operators are concerned about bandwidth utilization and the possibility of their networks clogged by "viral" files, says Ray Schaaf, chief operating officer of the wireline and wireless e-commerce rights management company Navio.
Navio's e-commerce platform powers Fox Music's online store that features wireless content such as ringtones. The store promotes "Buy - Share - Earn," enabling online purchasers to earn "Fox points" and also to "gift" their friends.
Global super-distribution timetable
Buhse says there are enough OMA 1.0 devices in some Asian countries to justify super-distribution right now. In 2006 there will be sufficient handsets in Europe to justify wider-scale super-distribution.
As for the United States, Buhse speculates super-distribution could begin towards the end of 2006 when there are enough handsets with DRM to permit sharing.
For super-distribution to succeed in the U.S. "a lot of pieces have to be put in place," says Lowenstein. The issues surrounding DRM have to be satisfactorily settled, revenue sharing (among operators, patent holders, content developers, etc.) have to be decided and all the back office details have to be resolved, he says.
When super-distribution arrives in the U.S., it first will be for subscribers within a cellular operator's network. Inter-carrier super-distribution is just too difficult to accomplish in the short term. Schaaf notes that operators are interested in offering more services to their own subscribers to increase ARPU.
CTIA WIC tie-in
The wireless industry is slowly, but surely, developing mechanisms for super-distribution. Biniak, who is one of the two Team Leaders of the CTIA Wireless Internet Caucus Mobile Content Action Team, says the industry has implemented inter-carrier SMS and is now implementing inter-carrier MMS.
The Mobile Content Action Team, for example, is involved in developing recommendations for DRM and licensing royalties.
Cellular operators also are opening their networks to enable premium SMS content from outside their own storefronts, he says.
Without a doubt, the future of wireless includes super-distribution with consumers providing recommendations to other consumers. "Look at iTunes," Biniak says. "People are buying based upon other people's playlists. Who put the playlists together? It wasn't Apple."