Activated Content is a media and entertainment services company with core watermarking assets, and some industry standard application and service layer components surrounding that core technology. After six years of providing a specific, limited offering, Activated is finally able to turn the corner and bring it’s core assets to bear on a set of services that have been envisioned since the beginning. This is all because the market is rapidly changing, and television is just as affected as music. This talk will be about those market forces, and how some core technologies can be applied to business models that take those changes into account. In keeping with my training as an anthropologist, I have to disclose my worldview so that you can take my comments in proper context. I think you’ll find this background very interesting as my presentation comes to a conclusion.
These two similar technologies are often confused. Both have their place, but the difference between the two is important to understand when contemplating their application.
Commoditized Content has a very different goal than Ad Supported Content. With Commoditized Content, the economic goal is little to no distribution velocity. Ideally, each instance (or copy) of the content undergoes one and only one transfer. Every time an instance undergoes an additional transfer (as when a consumer makes a free copy for a friend), potential revenue is lost. As a result of this, many of the technologies (such as DRM) that have developed around digital distribution have been aimed at stopping or at least slowing the spread of content. Paradoxically, every time content spreads, there is a potential revenue opportunity (as when an unauthorized copy is played at a party and five people decide to go buy it). This has always created strange tensions in the technologies and revenue models surrounding the entertainment industry. A great example is the entertainment industry’s ongoing relationship with radio stations. Ad Supported Content completely removes this tension because it has the opposite goal from Commoditized Content. Ad Supported Content needs to be high velocity. Because every transfer is a monetary event (if only a small one), the more transfers the better. Technologies (such as DRMs) that were developed to stop, slow, or control the spread of content are intrinsically ill suited to the high velocities desired in Ad Supported Content business models.
If the goal is to support content with advertisements, it is important to make note of a very important characteristic of advertising. The more targeted the advertisement, the more the advertiser will pay for the placement. This is because advertisements that are presented to the correct audience will have a much higher conversion rate than those presented to general audiences. If you are in the business of selling advertisements, it is to your benefit to be able to present very specific audiences. With fingerprinting, the specific piece of content is known, and a fairly targeted advertisement can be presented. With watermarking, the specific instance of content is known, and an even more targeted advertisement can be presented. Fingerprinting can tell you “this content is Stairway to Heaven”. Watermarking can do much more. Watermarking can potentially tell you “this content is Stairway to Heaven, distributed through Starbucks, last transferred through the Hear Music kiosk in downtown San Francisco on Dec. 8 th , to a registered Hear Music user who has this profile and uses a Microsoft Zune”. This entire thread of information is certainly subject to the normal ethics surrounding permission based marketing. However, without any user permission whatsoever, most of that information is still available. Extending the scenario, once that consumer gives a copy to a friend and the watermark is recovered, a very targeted advertisement opportunity is present. The elements that are potentially still valid are “Stairway to Heaven”, “Starbucks Hear Music”, “San Francisco”, and even many of the elements of the first friend’s profile. This makes for a very valuable advertisement.
Technologies such as watermarking that rely on information in the medium itself have an additional extremely pivotal characteristic – they survive the transfer between the virtual and physical world and back again. If a piece of content is marked for a specific non-digital distribution channel, such as a terrestrial broadcast station in Omaha, and is then recaptured digitally for end user consumption, the entire chain of information leading up to the terrestrial broadcast is still there. Again, this allows for extremely targeted advertising.
I’m not going to spend a lot of time on this slide, since I don’t want to get bogged down in details of technical implementation. The point is to illustrate a model of the world where the velocity of content is high, but it always has the ability to phone home and enable targeted advertising.
Even in societies and groups that are poor in material culture, there are variations and nuances to material possessions that reinforce personal identity (clan symbols, choice of materials, how many barbs on a hook, etc.). Societies rich in material culture such as ours skew this even further in the direction of reinforcing personal identity with a specific selection of items. This isn’t a bad thing. On the contrary, it is very important to our makeup to understand and assert “who we are”. Building material possessions around this assertion is natural and healthy. If you think of current sales and marketing efforts, where are they aimed? Where could they be aimed, where should they be aimed?
2007 FutureTV Conference
<ul><li>Media and Entertainment Services Company </li></ul><ul><li>Founded in 2001 </li></ul><ul><li>Customers include UMG, Sony / BMG, and Sterling Sound </li></ul><ul><li>Partners include Rimage, MediaMax, and IFPI </li></ul><ul><li>Embedded into Agnostic Media’s transcoding and IPTV offering. </li></ul><ul><li>Trained as a classical 4 fields anthropologist (Physical, Cultural, Archaeology, Linguistics) </li></ul><ul><li>Self - professed Luddite – technology is only of use if it makes our lives better. Receive 5 television stations at home, 3 of them with fuzzy reception. </li></ul><ul><li>Ten years of experience bringing (mostly useful) technology into the hands of new users in the travel, entertainment, and construction industries. </li></ul>
<ul><li>Reduces (or hashes) a known piece of content into a mathematical value (or fingerprint) that is unique to that piece of content. </li></ul><ul><li>Each piece of content that is to be identified “in the wild” must be pre-fingerprinted and the fingerprint placed in a database for lookups later on. </li></ul><ul><li>Hides a piece of information, such as a barcode, into the actual content itself – not in some auxiliary data channel. </li></ul><ul><li>In theory, the hidden information is machine readable, but indiscernible to a human. Reality comes remarkably close to theory in this case. </li></ul><ul><li>The big difference between fingerprinting and watermarking is that multiple instances of a given piece of content can be individually watermarked, but will still fingerprint out to the same piece of content. </li></ul>
<ul><li>New IP based distribution methods that encourage velocity and multiple on-demand transmissions have made it very difficult to sustain business models that rely on monetizing a single discrete transaction. </li></ul><ul><li>Ad supported content is a natural fit for these new distribution methods. However, the trick is to keep advertising connected to content as the content makes it’s way through a multiplicity of distribution systems. </li></ul><ul><li>Both Fingerprinting and Watermarking are good choices for this connection. </li></ul><ul><li>Television and paid content providers are facing this trend together. Television has the advantage of already knowing something about ad supported content. </li></ul>
<ul><li>The more targeted an audience is, the more the advertisement can be sold for, because the conversion rate is higher. </li></ul><ul><li>In the face of IP based distribution methods, well targeted advertisement becomes the only option because consumption of advertising is almost universally at the choice of the consumer. </li></ul><ul><li>Content itself is becoming more targeted. Publishing models are migrating from one-to-many to many-to-many. The good news is that this has the potential of raising the value (intrinsic and monetary) of all advertising. </li></ul><ul><li>The catch is that the whole system has to get smarter. There will be more content, associated with more advertisements, serving more granular audiences. </li></ul><ul><li>Watermarking is uniquely suited as an identifier technology to handle this staggering multiplicity. </li></ul>
<ul><li>The virtual world has a high level of participation, and that level is increasing, both in terms of number of people participating, and perhaps in terms of individual participation. </li></ul><ul><li>One of the advantages of the virtual world is that it is machine readable in a way that the physical world is not. This allows us to harness the power of machines to perform tasks so detailed and complicated they would not be worth performing by people. </li></ul><ul><li>The physical world is more machine readable every day. Along with disturbing developments in the area of personal liberty, there are also advancements that make our lives a little easier and better. </li></ul><ul><li>Both watermarking and fingerprinting allow machine readability of content in the physical (analog) world. This allows for the monetization of a portion of the distribution chain that was previously untapped. </li></ul>
<ul><li>Personal identity and context disintegrate in the face of rapid global homogenization (the growth of monoculture). </li></ul><ul><li>Many to many content creation and distribution, social networking, and online communities fly in the face of this trend, helping to create identity and context. </li></ul><ul><li>Material Culture serves primarily to reinforce personal identity and context, secondarily to fulfill the intended function. </li></ul><ul><li>Figuring out how to offer people items that reinforce their personal identities and social contexts is a public service, and a lucrative one at that. </li></ul><ul><li>Failing to figure it out might be dangerous to the future of your business. </li></ul>