Commerce - Copyright in the Internet Age

Online Commerce Begs For Web-Relevant Commerce Instrumentation

Part 1: Market Has a Message: Make it Easy

For online music distributors the path is clear. Make music acquisition as much - or more - fun and easy as it is offline, or lose customers to offline sales channels and, of course, the black-market operators. The experience with music distribution, to date, is telling. Napster has to be one of the most quickly adopted pieces of software ever to grace the Web. Tens of thousands of copies of the music-trading software were downloaded within days of it being issued. Millions are now in use, and hundreds of millions of music files have now been copied. In the legimate market sector, however, things are moving far more slowly. Too slowly. Forrester Research estimated that downloaded music sales reached more than $1 million in 1999, a drop in a $40 billion market.

For consumers, the winning combination for online music distribution will provide a full catalogue of content at the right price point, with minimal download times, interoperable file formats, easy payment mechanisms as well as interactivity and additional services that are not available offline. In other words, real innovation in online commerce will deliver a level of convenience and engagement that is not possible offline, which in the long term will make the Web a preferred retail channel.

For distributors and artists, the online music vending vehicle that is viable must provide powerful and persistent copyright protection, systems that will facilitate online auditing to track movement of content assets, marketing schemes that are integral to the distribution system, and payment mechanisms that are as facile to manage at the back end as they are transparent and easy to use for the consumer.

So far, from the consumer's point of view, the face of the market is unlovely and unfriendly, one of the reasons that the Napsters and Gnutellas and Freenets of the online world have managed to steal a march on the white market. He has to use a variety of players to access content - from RealNetworks to Windows Media Player to Liquid Audio. That's from the white market players already trying to make it online. At the other end, occupied by Napster and Gnutella, consumers must deal with limited and continually fluctuating catalogues, egregious sound quality and download time-outs.

Payment mechanisms are at best clunky (Who will invent for us the streaming cash!?). Credit card systems were not designed to pay for very small items and are cranky to use online. And the promise of micro-payments has yet to appear in a consumer friendly format that is appropriate for paying for music or live performances online, limiting Web distributors' choices in building business models, pushing them toward advertising-funded or subscriptions schemes.

To satisfy the requirements of these disparate constituencies, the technologies that are used to build and maintain retail music markets online will have to be powerful enough to protect artist and media companies' intellectual property while helping to improve the online experiences that will define the successful business models of the future. For all this and more, digital watermarking holds out the ideal technology to provide the instrumentation that will make all this possible.

Part 1:	Market Has a Message: Make it Easy
Part 2:	Digital Watermarking Preserves Copyright Security and Transparency

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