Participants listed in the previous post. Following are my notes, not verbatim, but mostly!
[start]
(Moderator: Ken Rutkowski, KenRadio Broadcasting.)
Ken: So do we go the guilt route to stop people stealing?
Panel: We can learn from the mistakes of the music industry. Price it right and people won’t steal.
Ken: But iTunes is a failure!
Bruce: if you’re just in the content delivery business and not selling hardware, that model doesn’t work. Apple are shifting iPods on the back of that business.
Taro: I don’t want to print CD-Roms or DVD. If the network becomes powerful and stronger, it can be all held at the network level, dumb client...
Ken: ...but smart customer, right?
Taro: Oh yes. But stream it all. Let the consumer have rights to access only. Our network has no hard drives at the client end, but it's intelligent enough to be able to pause, rewind...
Patrick: As I travel around, I access different networks though. Yes, I use Yahoo BB in Japan, but I also use wifi in the airport ... and over a multiplicity of devices and networks, so we don’t need dumb clients, we need smart clients! Portability of content!
Mitch: Speaking as a consumer we demand that the person we buy our content from package and distribute it [nicely]. I mentioned the iTunes experience because it’s moving devices. Nokia are the same. Nokia are the number one manufacturer of cameras. There will be more user-generated content which will open up a whole new arena of digital rights violations.
Erik: If you send an email to your boss or girlfriend, you don’t want it forwarded to the whole world. User-generated content is more than just the pictures, it’s text and other types of data. We’re taking the approach that our technology should protect any type of data, whether it’s user-generated or not.
[Are they then embracing DRM for the user, or - say - Creative Commons?]
Mitch: Deterrents! If we make it difficult to steal the content, the general masses won’t figure out how to do it, they’ll just go buy it instead.
Patrick: …As long as we make it easy to buy.
Ken: If we know the RIAA is watching, does that prevent us from stealing or taking content for free?
Christopher: I think it helps, but it’s not the only answer. Make the product available, attractively packaged and at affordable prices. But yes, enforcement needs to be there. There’s much more awareness now that free is not always really free, and as legitimate product is made available more and more..
Ken: I wanna talk about music. The industry has failed to educate the parents, where the money is, about legal music distribution. The kids are given allowa nces, but the parents don’t tell them what they can and can’t spend it on.
Patrick: Education certainly plays a role, but being a dyed-in-the-wool capitalist, I like to look at the market. What are the solutions in the market here? Can we make services available to parents, like, say, a digital allowance [pocket money], as a solution to help parents and educate at the same time? It’s an idea we’re trying out and it’s those kinds of solutions we think are going to be important. Ease of use.
Ken: I wanna talk about CinemaNow. So the user downloads and views, and you authenticate, right?
Bruce: Yes. A few years ago we thought, oh we have content here that’s popular in the college market. Let’s offer it there. But they had no interest, they’re just stealing it already. So we went to the 25+ market, and suddenly there’s a market. They’re paying. They get good value, virus free, it’s responsible and reliable. It’s got to be good value, not too expensive.
Ken: Lemme play with iTunes for a minute here. I buy a track for 99c, and I own that track, but I can only take it to 3 devices, and it’s encoded at 128K. If I go out and buy a whole CD, I have complete accessiblity, and at the highest quality. I can copy it as many times I like. I can play it where I like. I have complete digital rights, as compared to iTunes, where I’m not getting nearly as much value.
Mitch: You’re playing for the convenience. You have to rip that CD. It’s an effort. In the music industry there’s too much greed, everyone wants a piece of the revenue pie. We need to generate new revenue streams. We’re making billions of dollars via the distribution of our content, and we need to look hard at how we cannibalise our business, because it’s dangerous, as I said earlier we need to look at protection of revenue.
Patrick: I’ve been experimenting with iTunes. I think 99c is great value. I rebought half my music collection for my portable device because I don’t have time to rip. I want the portability, so what I found is that, certainly with movies, games and tv, we’re seeing a lot of incremental revenue in these arenas. Consumers are looking to consume in different ways and places, and they’ll pay more to get that flexibility.
QUESTIONS FROM AUDIENCE:
Q:You seem to be talking about a perfect world. What if my computer crashes after I’ve used a DRM-enforced install-once-and-once-only license? Can I still use that product?
Erik: If you need to reinstall, you can call a number and if you’ve officially purchased a product, you’ll get a new code. Your service provider will know which copyright purchases you’ve made and what you own.
Q: What’s your priority, to protect the content or make money? DRM that isn’t intrusive to my way of life, please. I can’t get iTunes over here. I want you to make money [laughter. Panel: You do??], but I don’t want to be owned by DRM. There are some companies doing it now where you can download without DRM, so does it have to be necessary?
Patrick: I love this question. At Sony I’m in the business of providing content to consumers and making money off distributing that. Whether I’m selling Sony content or partner content, I need to respect that the problem is frankly the same obstacles that got in the music industry’s way. Clearing rights, clearing guilt payments.. for anyone who has a library of content, this is a huge issue: how to avoid the users finding the content without paying for it. As a content holder, this is an issue that I work with every day. It’s not an easy process. You have to invest time and legal resources to clear these rights. But my answer is: get everything out there, get it all out there! But there are problems we all need to overcome as part of this process.
Ken: OK, you have one minute each to give us a vision 24 months from now: aggregation of digital content in a distributed environment.
Taro: I’m a network believer, the network will grow. Authentication and head end.
Bruce: For CinemaNow I see us expanding. Broadband is growing. For us we just need to get it into the living room and off the PC.
Erik: I think we’ll see (in Europe) large telecomms companies stepping up aggregation of content and programming offerings. We’re seeing it with T-Online and Telecom Italia. They have the billing capabilities and the retlationships. They’ll act as a wholesale engine for others to play with.
Christopher. I see the same. Telecoms providing services. Lots of requests for legit content and services like CinemaNow. It’ll take place in an environment where parents are more aware of filesharing and the legal issue.
Mitch: I think it’ll be similar to where we are now. 2 years is short. Storage is becoming more powerful, so we’ll have more phones in color and capable of doing these things, but in terms of DRM, I think it’ll be ten years, not 2, before we see the impact. Consumers don’t care about DRM, they don’t care if it’s protected or not, they don’t see that stuff. They just want to pay, to own, and if they lose it [the content] they want to be able to get it back.
Patrick: 24 months. OK, US view. We’ll see the emergence of at least one extra digital platform [laughter. Ken: ooh, what are you releasing??]. We’ll see 1000s hours of programming that consumers can download to portable devices. People want to be able to purchase content via download. We’ll start to see real connection in the home. The companies who can clear the rights will be the ones who see their business grow.
[end]
Patrick got besieged, but we hung around and managed to invite him to lunch.
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