Contribution to Digital Media Manifesto discussion
by Leonardo Chiariglione
on behalf of some experts attending the 65th MPEG meeting in Trondheim
During the 65th MPEG meeting in Trondheim a group of 15 experts discussed the Digital Media Project (DMP).
There was agreement that the initiative was worth supporting and that one study case should be carried out and the result contributed to the Digital Media Manifesto (DMM) reflector.
The study considers the issues generated by the "Content Distribution" use case, i.e. "distribution of digital audio and audio-visual content across the value chain".
Although important differentiating elements exist between different content types, at this stage there is merit in an analysis that is agnostic of the specific content type.
The views represented in the slides are those of the experts and do not necessarily reflect their employers’ opinions.
Table of content
1. Matching demand and supply (Marc Gauvin)
Digital Media change the capability of suppliers to provide and end user to access content
Tension between embracing new paradigms with their unknowns/promises and adapting old ones
"Matching demand and supply" is mostly about the former
Supply/Demand Before and After
Consequences of Changes
Producer Strategic Advantage
Hard to Secure and Sustain Market Advantage
Mobility of Value
2. Hurdles in deciding digital content distribution
Beware that there is so much at stake that companies may be reluctant to try aggressive ideas
What is the problem
The vision of the Digital Media Project entails a re-shaping of the business environment that goes beyond mere evolution. This project is stated in terms that explicitly go beyond mere incremental progress, say from tape to disc based media. In these terms, a transition from physical to digital media has consequences that have no parallel within the physical world. The consequences inherently carry global impact, and fundamentally change both legal and business relationships between stakeholders. This lies behind debates such as ‘bits must be free’, the consideration of software and business process patenting, and the nature of copyright.
Stakeholders in this future include powerful industry sectors and consumer groups, each holding very high ambitions to see that their interests are advanced, or at the least are not destroyed, by the structural changes at hand. These interest groups are backed up by various laws, shareholders, and national interests that are often brought into conflict by the rollout of digital media and the global scope of the Internet.
Example: Patent Licensing
Companies and individual entrepreneurs see the potential value of crucial patents, and are unwilling to relinquish these on generous terms. On the contrary many entities are aggressively filing new patents especially in areas of software and business methods
Example: Content Rights
Authors and other rightsholders see great potential for exploiting their works in new ways and seek to ensure they retain their exclusive rights
Example: Legislative Agenda
There is no doubt that legislation is out of step with technology in several areas. Powerful groups seek to influence the amendment of the legislation in their favour, and have so much at stake that progress is painful
Example: Content protection & rules
Much at stake agreeing a fixed solution, better agree a framework but how do you implement this (maybe java VM)
Importance of the issue
The scale and scope of what is at stake engenders a particularly difficult environment for experiment and compromise, when the rise or fall of global business and enterprise hangs on the results. The very scale of the Digital Media Project is itself an impediment to rapid or experimental adoption. It will be essential to find ways to allow industry space to experiment in ways that do not expose them to excessive risk. This may not be easy and no solution is presently clear.
It is unrealistic to expect these underlying dislocations to be amended within a short period, and it is unrealistic to expect that stakeholders will irresponsibly relinquish their own interests. Time is required to ensure the adoption of any new technology.
CD 10 yrs
MP3 10 yrs
IEEE floating point – took 10 years to complete!
Time is certainly required to see the wide adoption and support for something as complex as MPEG technologies. Especially as there are many compromises to be made in terms of technology licensing, patenting, access to rights in content etc.
Benefits from solving the problem
Reduction of perceived unacceptable risk to stakeholder interests
Better progress and compromise within underlying political and legal discussion
More scope for stakeholders to experiment with new business models
Conflict of expectations
What use consumers expect do of the content
What use rights holders expect will be made of their content
What support players on the value chain can provide to the expectations of both
Use Case - 1
Consumer purchases Music CD
She can play it on
- Her own CD
- Any other compatible CD player
She can play it in
- Her home
- The Car
- At the office
- Anywhere with a compatible CD player
Use Case - 2
Consumer purchases CD
- Lend it (during loan she does not have it to enjoy)
- Give it away
- Sell it
- Copy bits of it for her study programme or for other private use
Consumer expects to enjoy the same benefits in the digital domain, even when the content is no longer fixed to the medium.
Ease of Use of Technology
Replicate Use Patterns from Analogue World
Hurdles to Consumer Expectations
Education – How to use new technology
Value Proposition – Does the consumer feel that they have received a fair bundle of benefits for the price charged.
Legal – Will the consumer be able to exercise all of their legal rights having to do with their use and disposition of the digital media.
Hurdles to Technology Providers
ROI – Technology providers must get a return on their investment in R&D and product development. Therefore, new technology is not brought to market immediately.
Legal – Functionality that new and existing technology provides the consumer the ability to ignore certain legal restrictions but simultaneously have certain of their legal rights ignored as well.
Ease of Use – New technology to address the expectations of both Consumers and Rights Holders frequently requires more than merely turning on the product - Registration, authentication, updating SW, etc.
What Rights Holders Expect from Technology and CE Vendors
Current model (i.e. Outright purchase)
Digital Sleeping Policemen
The expectations of Consumers and Rights holders collide when
- Consumers expect to be able to continue to behave in the same way with digital content as they did with analogue (e.g. private copying)
- Rights holders expect Technology and CE vendors to protect their interests in the private space of consumers
- Technology and CE vendors expect Rights Holders to change the way they view their relationship with consumers.
4. Bit delivery
Digital delivery is the main driver in the change of content supply/access relationship
We are far from exploiting the capabilities of digital delivery channels
There are cases where delivery channel upgrades
5. Value chain player remuneration
Distribution of content follows a Value Chain. Each link has a specific ROLE and adds a specific VALUE.
2 problems can be identified:
Action Item: We should look at the ideal value chain and map it against the existing one.
6. Interoperability of content flowing through the system
Content distribution implies that content will flow across different players on the value network.
These players often rely on proprietary elements for the purpose of retaining a level of control of their business, leading to forms of restriction of content flow across the value chain
Translation/adaptation/conversion is always possible but at a cost that may negatively affect the economic viability of the distribution system
Insufficient interoperability is of particular concern in the end user domain because it may affect the cost of consumption device and the end user experience (e.g. ease of use, functionality, possibility to distribute content on multiple devices, etc.)
Voluntary investment drives creation of enough number of interoperable platforms.
Benefit of interoperability only became notable after two or more platforms reaches massive use.
Investors do not have motivation for interoperability between different platforms.
In the communication industry, some connectivity are obligation of service operators.
Appropriate technology, potentially combined with supporting legislation may insure the content accessibility among the different terminal.
No appropriate combination of technology and legislation is identified so far.
7. Issues in different content protection systems
Music Retailer A users DRM C for online music delivery services.
Music Retailer B users DRM D for online music delivery services.
Devices that want to play music from both A and B have to either (i) support both C and D or (ii) get agreement from C or D to transform packaged content from one system to the other.
Option (i) adds cost in hardware or software footprint, licensing fees and risk management.
Option (ii) is difficult to secure because C and D see risks to their own security and possibly a poor customer experience as permissions can not be perfectly mapped between systems.
Further, if A wishes to transfer its allegiance to D, it is forced to re-package all content prepared for C into a new delivery format. These switching costs make competition between C and D less "perfect".
The alternative – a single protection system
Movie Studios decide individually to adopt a new optical disc format carrying movies for end user consumption. They also adopt a single DRM system.
Although this creates a de facto monopoly for both the format licensors and the DRM providers, the bargaining power of the studios (individually) is sufficient to ensure a fair market price for each.
Logo-compliance rules means that all discs play in all players (within legally permissible territorial constraints).
The product becomes the most rapidly adopted consumer product of all time.
User benefits can be optimised by one or more of:
minimising the impact of supporting several systems for instance by ensuring that different content protection systems fit into a common framework
ensuring that different content protection systems have well understood ways of sharing trust so that content delivered using one system can be transformed to be consumed on a device supporting only another system
ensuring that a single supplier is not able to exert monopoly power.
Experience shows that the end-user will not adopt (in volume) products where there are confusions and uncertainties about compatibility and playability (e.g., Betamax vs. VHS).
Solving the problems of incompatibility between different content protection systems will enhance the attractiveness of digital media delivery systems and ensure that "critical mass" is achieved more quickly.
8. Deployment costs
Market driven devices
Every manufacturer can build products
Distribution and maintenance typically through retail
Competition will drive costs down
Generic device must meet horizontal market requirementMay become more complex /expensive
Dedicated devicesDevice manufacturing and distribution controlled by service providerDoes not come for free
Dedicated solution simpler/cheaper than generic one
Small vertical markets may not achieve critical massNo mass deployment
Little device costs erosion
Lowest possible costs provide best opportunity for market take offGeneric devices in principle best suited, but…Cost difference between generic and dedicated has to be low
Functionality must be sufficiently rich
Content distribution involves a complex system where different players, bound by legal/business agreements and assisted by different technologies, operate to achieve the goals of the distribution
Compliance provides players on the value chain with the means to verify that each player operates according to the agreed rules
Compliance can be assesses at
Business terms levels
A typical case is end user device compliance
Traditionally MPEG has worked on technical compliance (i.e. means to verify that an encoder produces syntactically correct bitstreams and that a decoder is capable of decoding test bitstreams
In case of protected content compliance is a more demanding problem (even considering just the technical aspects of compliance)
10. Technology Licensing
Ability to deploy standards based products dependent on licensing of "essential" patents
- cost of doing business
- freedom to innovate technology and business
- intended to provide return on technology investment
- MPEG-4 Visual
- AVC / H.264 - urgency expressed
- MPEG-7 – unknown
- Availability shortly after final approval
- Industry/Stakeholders embraced terms
- Multiple forms of business and technology enabled
- Patent holders can only be identified when standard is completed.
- Patent holder meetings can only be convened based on essentiality determination
- Urgency is dependent on market forces
- non-participant risk is reduced
- Market forces influence licensors/licensing terms
- consumer input
- industry input
- Might workflow changes alter the situation?