SANTA MONICA, CA — How can you host a conference 200 yards from the beach and expect people to attend your indoor, windowless sessions? Well, DCIA did okay today with their P2P and Video Summit, and I suspect Digital Hollywood will hang in there as well the rest of this week. I’ve spent a lot of time on the Santa Monica beaches over the years and its famous pier was calling to me, but fortunately that predictable SoCal haze came in so thick today that someone new to the area never would have known an ocean was there.

Much of what was said inside the conference room was predictable too, but that’s unfair on my part because I’ve attended several of DCIA’s events. This one had a strong recurring theme, a positive one in my mind, namely that P2P is an incredible technology, but it doesn’t have to be used for infringement, there are many opportunities given technological advancements and market shifts to find profit for both P2P owners and copyright owners.

Once again DCIA produced a good variety of speakers, and showed just how much innovation is occurring in the P2P space. Many of the technology companies are focused on protecting the rights of copyright owners, such as MediaDefender, Cloudshield and Verimatrix. MediaDefender, known for seeding spoof files in P2P networks, is also seeding marketing files to promote unconventional materials for purchase. Cloudshield offers a variety of services including watermark tracking in real time and follow-up monitoring for interstitial placement and other marketing. Verimatrix is aggressive in watermarking, and VP Neerav Shaw admitted it is not perfect in that any system can be cracked, but he maintained it created a long-enough protection window for creators to bring in most of the revenues they would have in a truly protected market.

My panel was supposed to be the same as the one I was on in Berlin two weeks ago, but we had a different moderator and different panelists, and it went, well, a bit off target. Instead of focusing on how copyright owners and P2P developers could work together to create licensed business models, we (1) talked about piracy in China, and (2) argued about the 2000 version of Napster. Very odd.

That said, I think the audience heard an interesting discussion, and I did my best to convey my primary message, that copyright owners are agnostic about technology and will work with any distributor that respects their rights. Distributing millions of unauthorized files and winning millions of users, THEN turning to copyright owners and saying “We’ve got your content, you can either make what little money we’ll offer you or you can just keep getting pirated” is not a viable model, but fortunately that does not seem to be what most DCIA members wish to do.

Any P2P service that agrees to distribute licensed works and will adopt some protection measures both for unauthorized distribution and for filtering of unlicensed works will have little or no problem finding willing music or video licensees, although I admit providers may be put off by the cost of licensing. That, of course, is for market negotiations, it is just difficult now because there is no market here so value is compared to more mature models. That problem will be sorted out with time, and I said P2P providers could promote their scale over direct distribution models to overcome that obstacle.

Two other points I made: (1) Video licensing should be easier than music because there is generally only one set of rights and they are held by studios. (2) P2P as a technology is fantastic, an amazing way to distribute content, and of course has been around since the beginning of TCP/IP. One challenge here, though, is that the model above that is attractive to copyright owners is a centralized one, while the one most adopted by users is a decentralized one. It’s harder to control quality of product (important from a branding perspective) and later use and distribution of the work in a decentralized network. Still, there was some discussion here of hybrid models which seemed to have promise.

A final observation — as one of the only representatives of copyright owners, I enjoyed hearing others talk about their own perspectives. Many of the conversations here in the hallways and at breakfast and lunch involved people who have been in this space as technologists for years and years. They have watched more companies come and go than I could possibly name. They could tell you why successful companies succeeded and failed companies failed. They have had both successes and failures. They are bright people who understand both technology and business, a powerful combination and, based on some of the Silicon Valley failures, a rare one.

They could document down to the tiniest detail the actions of copyright owners in this space over the years. Yet, it seemed to me anyway, that they couldn’t always see the world from the point of view of the copyright owners themselves. They expressed bafflement at times over why a copyright owner didn’t accept this reality or that, not understanding that to do so would have meant surrendering total rights over their content, not a good precedent to set when so many future disruptive technologies are sure to come. They couldn’t understand why a copyright owner wouldn’t want to earn something off of piracy rather than nothing, not recognizing that sometimes that way of earning “something” would further cannibalize the traditional part that is earning more than “something.” Piracy is hugely damaging to copyright industries, but forfeiting what still earns revenues to instead embrace something that earns little or no revenues is not a logical business move.

I am of course generalizing here. I heard technologists make arguments similar to these. Others noted that it’s not that copyright owners are afraid of technology, they just want to have some hand in how it is deployed to users. Hulu.com was cited as an example where the user experience is fantastic, the creative works available are top-notch, and the owners (NBC Universal and News Corp.) can feel comfortable knowing that the site isn’t going to do things contrary to their interests or the other copyright owners who distribute on the site.

It’s probably okay that many bright technologists cannot completely see the world from a creator’s point of view. I would consider it unreasonable to expect those of us in the copyright camp to completely understand the point of view of technologists (although there are some brilliant technologists in the copyright space and many of the tremendous innovations in recording and distribution over the last 100 years have come from inside the copyright industries). Such understanding on either side is not necessary to do business.

There was one point of agreement. While consumers ultimately drive the marketplace, what consumers want is not technology, but creative works, or as others say, content.

Content is still king.

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This entry was posted on Monday, October 27th, 2008 at 7:22 pm by Patrick Ross and is filed under events, internet, licensing, market forces, p2p, piracy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.