NEW PROTECTION AGAINST ONLINE Pirates

Folio: The Magazine for Magazine Management, Sept, 2000 by Caroline Jenkins

Advancements in digital rights management guard against theft of online content and open new revenue streams. But do the costs outweigh the benefits?

Whether you believe Napster is simply the conduit for music swapping or the distributor of stolen property, one thing is certain: Napster's fight against the Goliaths of the music industry has brought peer-to-peer file sharing and Internet piracy national attention. The music industry, however, is not alone in this battle. Anyone with unprotected material on the Internet--everything from Napster's sound files to electronic versions of magazine articles--has cause for concern. As the Napster case shows, digital content can be easily copied, without quality degradation, and subsequently distributed to large numbers of recipients at the touch of a button.

To defend against casual theft and/or outright piracy, content providers are taking a look at a process called digital rights management. The nascent technology is an anti-theft device of sorts that manages copyrights and usage. Simply put, digital rights management gives publishers the ability to create rules dictating the use of digital content, as well as the ability to modify those rules even after content distribution. These "rules" cover such aspects as ownership, payment, promotion and privacy.

The technology couldn't be more timely. As Web businesses evolve, publishers are putting more and more content online and adding functionality, including in-depth database and archive searches. At the same time, publishers are hunting for additional Web-based profit centers. Digital rights management lets publishers protect their valuable Web content, and creates new revenue channels by charging access and usage fees.

HOW IT WORKS

Programmers initially developed digital rights management as a security measure protecting proprietary programming code and classified military information. Owners of these documents controlled access to them with passwords and complicated viewing devices. Now these systems are being used by a broader span of companies. Those with the appropriate technology "package" the electronic content by encrypting it and generating an electronic key and ID for subscribers. Usage rules, rights and cross-promotions for other published content, as well as events and merchandise advertisements, can be included with the content. The company then distributes the package via the Internet, by e-mail, or using physical media, such as a Zip disk or CD, for a fee. A digital rights management system monitors transactions with readers, tracks usage/copying, and distributes subscriber payments to the appropriate recipients.

Now the publisher of an e-mail newsletter, for instance, can profit from each and every person who accesses the information. Publishers can charge subscribers and pass-along readers. Previously, a publisher had limited control over the content once it was distributed. But digital rights management allows the publisher to impose certain limitations. The recipient of a forwarded newsletter, for example, might not be able to read it without being prompted to subscribe. Or the publisher might chose to disallow the forwarding or printing of the newsletter altogether and allow access only to the subscriber--and for a limited period of time. Through digital rights management, the publisher can specify usage conditions and change them at any time.

This type of management of content opens doors to all kinds of possibilities:

* ADDITIONAL REVENUE VIA PAY PER-PER-VIEW MODELS Publishers can charge per article, rather than a whole subscription, and can also charge for using databases and archived material.

* NEW, INTERNET-SPECIFIC PRODUCT MARKETING A publisher sponsoring a conference, for example, might decide to market and attach digital rights to a real-time broadcast over the Internet of a particular lecture or online conference.

* CONVERSION OF PASS-ALONG READERS TO SUBSCRIBERS Publishers can permit access to subscribers only, forcing secondary readers to subscribe as well.

* ADVANCED TARGETING By electronically tracking and profiling the content that generates the most subscriptions, publishers learn which topics and information readers access the most.

* PREMIUM AD RATES The technology enables publishers to permanently attach an ad to content, increasing the value of a single ad. Publishers can also access reader accounts and study usage information. This allows publishers to more clearly identify readers, and ultimately to increase the value of an ad through segmentation. The publisher of a travel Web site, for example, can deliver a banner ad to users looking for content on travel in a specific region.

WHAT DOES IT COST?

Digital rights management continues to develop as technology advances. And as these systems go mainstream, vendors proliferate. Many publishers are opting to outsource these services rather than make the investment themselves. Digital rights companies offer varying degrees of user-friendliness and involvement. Some companies can train a publisher's existing IT staff; some take care of the whole system. The types of services and cost of implementation vary.