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• Privately held
• Developing a Digital Content Distribution Marketplace
• Globally positioned
• Incorporated in Delaware
About Node Science Corporation
• Any piece of creative expression can be represented digitally
• In many cases the digital representation will be more useful than a physical one.
Early Observations
• A digital object has no mass.
• Digital data can always be copied perfectly. Nyquist Theorem.
• Once injected into a network the potential value of digital content is not limited. Metcalf’s Law.
Science of Digital Data
• Access and sharing of creative expression is much greater.
• P2P platforms augment efficiency even further.
Digital Content Distribution is Inherently Efficient
• Copyright owners identify revenue losses.
• Barriers to entry of new content increase. Higher risks.
• Creators of content are faced with a dilemma.
Efficiency is not Effectiveness
• Proactive approach required
• Embrace and extend
• Any technical solution must work for both sides
• Find ways to harness the distribution for copyright holders benefit
[Source: Gracenote presentation at Copyright Protection Working Group Meeting March 2004]
Lessons from Napster
Napster missed the boat… it thought it was in the music business. The web today is
simply an intermediary. Someone is going to make a killing by figuring
out how to exploit peer-to-peer networking… When they do,
you should pay attention.
[extract from Tod Maffin, Top Technology Trends for 2002 http://todmaffin.com/future_ file_winter_01.pdf]
Lessons from Napster:Potential Commercial Strengths
Copyright owners are losing revenue. The digital content marketplace is facing significant deterioration in
content diversity and quality.
The Problem
It is always possible to create perfect unprotected copies
of protected digital content objects.
Root Cause
Copyright owners are attempting to solve the problem by using data protection
technologies and/or by taking legal action against individuals who
distribute digital content in an unauthorized manner.
Addressing The Problem:Current Attempts
Viral distribution - i.e. - guerilla warfare
Increasing control increases resistance
Rapidly losing war of public opinion
DRM Arms Race
“Don't worry about DRM and lock-down computing, says Jim Griffin. Historically
they're doomed to fail. (Griffin is former director of Geffen’s technology group).”
[By Andrew Orlowski in San Francisco Published Wednesday 11th February 2004 17:25 GMT]
DRM Arms Race
MaximizeAccess
ProtectAccess
THE GOAL:ProfitableContent
SatisfyConsumer
ValueContent
Conflict
Wrong Assumption!Content value does NOT increase
when access is limited
The Copyright Owner Paradox
Question
Is there a way to maximize both the access to AND value of content?
Answer
This IS possible by creating value and incentive for
online consumers.
BenefitFriends
Don’tShare
THE GOAL:Benefit to You
and Friends
ShareObjects
BenefitYourself
Conflict
Wrong Assumption?Is there a way to benefit the online consumer for sharing?
The Online Consumer Paradox
Question
Is sharing the content you enjoy really bad for copyright owners?
Answer
Only if they copyright owner does not
benefit.
• Equally benefit the suppliers and consumers of goods
• Provide incentive for accurate reporting on the goods
• Encourage competition among suppliers of and consumers of the goods
Finding Sustainable Markets
CBOE
iTunesTM
Markets for Intangible Goods
PatentLicenses
Speed of Transaction
Marke
t Mech
an
isms
eBayTM
• Balanced fair use rights and copy rights.
• Copyright owners get paid each time a digital object is consumed.
• Those that use copyrighted digital content must pay to do so.
• Those that distribute copyrighted content must also be paid.
Principles for a Sustainable Digital Content Marketplace