IBC2004 – Page 2 – Digital-Lifestyles

Curt Marvis, CinemaNow – the IBC Digital Lifestyles Interviews

We interviewed Curt Marvis, a key player in IP-based video delivery and CEO of CinemaNow.

CinemaNow have the distribution rights to the largest library of on-demand feature films available on the internet. CinemaNow’s distribution model is one of the most flexible in the industry: films are available with pay-per-view, download or subscription licenses.

The company’s library comprises content from more than 150 licensors, including 20th Century Fox, Disney, MGM, Miramax, Warner Brothers and Lions Gate Entertainment.

CinemaNow have not restricted themselves to films, however – their catalogue includes music concerts, shorts and television programmes.

CinemaNow’s technology platform is essential to their business, and so they have developed their own proprietary content distribution and DRM system: PatchBay. They’ve also turned PatchBay into a product, and has licensed the platform to other content distributors. PatchBay allows distributors to manage, track and syndicate content whilst enforcing DRM solutions and territorial restrictions. CinemaNow’s entire business is built around the Windows Media 9 platform, which has simplified their business model somewhat, whilst at the same time allowing them to take advantage of the sophisticated features built into Microsoft’s platform.

Curt Marvis has been CEO of CinemaNow since the company was created in July 1999, arriving there from 7th Level. He was also a founder of Powerhouse Entertainment, and in the 80s and early 90s was CEO of The Company, the Los Angeles production organisation.

Digital delivery of video has been slower to arrive than many industry players predicted in the mid-90s, but with the adoption of broadband and improvements to codecs and DRM systems, it looks like mainstream is around the corner. There are still many hurdles – broadband isn’t quite broadband enough, consumer rights over moving content to other devices is unclear at best, content can be lacklustre and customers are confused by the many competing codecs, DRM schemes and formats in the market.

We spoke to Curt about CinemaNow and his hope for the future of digital content delivery, and the advantages of Windows Media 9.

Some of the visitors to Digital Lifestyles might not know about Cinema Now. Can you give me some background on that for our readers?

CinemaNow has been around for five years. We started the company in mid-1999, which of course was during the dot.com hayday. We started the company then do to the same thing that we continue to do today, which is to offer movies and other video content on demand over IP Networks.

What do you think has kept Blockbuster out of the part of the market in the US for so long?

Blockbuster is actually a small investor in our company and I think Blockbuster feels that when they get into a new marketplace they look for a market which is very, very big which the IP on demand marketplace still is not.

I think their philosophy is that they will enter the marketplace at a moment in time when they feel there is a sufficient amount of revenue.

You have to keep in mind as well that Blockbuster do not own the rights to distribute content in this window yet, so they have to negotiate that through a studio.

They are sort of dabbling with it in the UK, but not in a very high profile way.

Yes, I know Steve Middleton and they have had that trial in Hull. So I’m familiar with that. They are actually doing more in the UK than they are in the US market.

Tell me a little bit about your IBC session. What sort of things are you going to be covering?

We have a sort of technology platform we call PatchBay. PatchBay is the sort of central nervous system of CinemaNow, and it’s a completely Windows based platform.

We deliver our movies exclusively in Windows Media format, but that’s not to say that couldn’t use other codecs or other players, but we chose that as our primary platform when we started the company.

We used the installed base for that choice as well as the specific functionality of the platform, for purposes of what we can do to add additional delivery and content.

Could you tell us a bit more about your Patch Bay product?

Patchbay is a versatile, user-friendly, API and tool for managing all facets of online content distribution. With Patchbay, you can manage six major tasks for successfully distributing content online including: Content Management and Distribution; Content Syndication; Rights Management; User Profiling and Ad Targeting; Pay-Per-View, Subscription and E-Commerce Management; and Comprehensive Reporting.

It’s a tested, real-world application currently being used to manage millions of streams per month over disparate networks. With Patchbay’s scalable infrastructure, CinemaNow maximizes its revenues while protecting and retaining control over its assets, even those syndicated to third-party websites.

Windows Media 9 it has been a terrific platform for delivering and viewing and protecting your content. What excites you most about it?

That is a big question. Is there something that Windows Media excites me?

The Windows Media Platform is directly compatible with the dominant operating systems and you know, EU concerns and other concerns notwithstanding we felt that having a player that was most used with the operating system it was running on was best. We also frankly think that beyond that specific issue the Windows Media Platform and Windows Media Player are the superior player and platforms for digital delivery. That is why we chose them.

Who is the typical Cinema Now subscriber? Who are you actually reaching?

We definitely have a male dominated audience – over 75% of our users are male. They tend to be slightly older than you might initially think. Our typical user is probably between 25 and 40 years of age. Generally speaking they have a higher than average income, higher than average education – you know that sort of thing. That is the kind of profile that we have in general, although it is changing all the time, as we have more and more of the mainstream business.

You have 455 films in your library at the moment. How many are you aiming for?

That’s what you’re seeing in the UK. We have territorial rights which protect our content from being viewed outside of the US for films that we do not have rights to – for example the collection of movies that you see in the UK is significantly inferior to what we offer in the US. In the US on our website right now we have almost 2000 films available. By the end of this year that will grow to probably close to 4000/5000.

In the UK, I am hopeful that we will be up well over 1000 films by the end of the year including the films from major studios.

How long do you think it is going to be before digital delivery becomes mainstream then?

Well, I think there are a number of factors that are sort of the driving part right now. One is the problem of availability; one is broadband penetration; one is hardware device availability and penetration in terms of everything from portable devices, media centre devices etc. etc.

I think there has got to be an alignment if you want to drive fast market adoption. When we started the company in 1999, we thought that by 2004 that time would have arrived. I can tell you now that is just the beginning and we will probably see this become a mass market over the course of the next two to four years – somewhere in that timeframe.

You mentioned that you don’t have the rights to distribute all of your films in all territories – what kind of problems are you facing in getting rights clearances for content in different markets?

No real problems, but rather an issue of needing to be set up in these countries with strong distribution partners before it is worthwhile to spend money acquiring local content and preparing it (encoding and storage) for distribution. Keep in mind that content is distributed on a territory by territory basis and with each version comes new contracts, payments and prepping.

Are you considering a global pricing model or will you be pricing the same content differently on a market by market basis?

We will try to keep it as consistent as we can, but we will definitely need to follow pricing schemes that are consistent with differences in the traditional distribution businesses.

Many content providers are getting excited about supplying content for mobile phones — when you do see serving media to mobiles becoming a mainstream business? Will there be a point when consumers will want to watch long media streams like films on their mobiles? Is there a maximum length that consumers will watch?

I think mobile distribution is really a business in the next few years for portable devices such as tablet PC’s, Portable Media Centers, etc. Cell phones for full length content seems a long ways away, if ever.

What of the content that is being delivered to people the films and content that they are buying has quite often incompatible DRM schemes behind it. What do you think is going to happen in that space over the next four years?

Windows Media has DRM that has been adopted by a lot of different people. I think there will be a shake-up in the market very shortly and one DRM system will be adopted by 95% of the content delivery industry.

What worries you about the future of digital delivery? What keeps you awake at night?

Well, I think, I sleep very well actually. I think the biggest concern is that people will jump into the marketplace prematurely – before there is a high quality user experience to be had, and that consumers will be turned off on the concept if it doesn’t work properly at first or it is not a compelling product offering.

I hope that companies recognise that this is still very much a virgin market, and that when it really begins to take off I think it’ll dwarf the size of what is happening in the DVD industry, and it’ll open up avenues for huge amounts of libraries, great content opportunities etc. I think you will see people consume more and more content and I think there will be plenty of room for a lot players to get into the business.

Curt is a panellist in the ‘Understanding the Range of Platforms – A Multitude of Destinations’ session between 14:00 and 15:30 at the IBC conference on Sunday, 12th September in Amsterdam. Register for IBC here

CinemaNow

Ken Rutkowski – the IBC Digital Lifestyles Interviews

The second in a series of eight articles with some of the people involved with the Digital Lifestyles conference day at IBC2004.

We interviewed Ken Rutkowski, the force behind Ken Radio, on the media platforms available to today’s consumers, and what’s exciting him.

Fraser Lovatt: It is possible that some of the visitors to Digital Lifestyles might not know about Ken Radio. Do you want to tell me a bit about yourself and what you are up to at the moment?
Ken Rutkowski: Well, Ken Radio is the largest piece of listened to content on the web with over 186,000 listeners every single day. What we do is we look at technology on a global level. Where most shows on TV or on Radio are generally very localised, we try to do away the whole US-centric concept and say “Hey, technology is global” and see how it impacts people. So we are trying to really see what is happening – like we say: other sites might break the news – we’re here to fix it.

By really bringing together a team of global observers that can dissect what is happening and then interpret it properly. So we are probably the only place where people can go to really find out what is going on at a global level. We are pretty proud of that.

What are you up to at the moment? What is your current project?
My broadcast business is radically different to what my personal business is. My personal business is a company called RefreshIQ.com What we do is we help technology companies have better interface with media companies. So we basically bring technology to Hollywood and Hollywood to technology. We allow companies like Microsoft to have better relationships with the Studios. We help companies like Nokia have better relationship with media companies.

Microsoft have recently set up their own internal group for this, haven’t?
Absolutely and that’s kind of a contradiction. Think about this – I don’t know – when you go to war you generally have to be on the ground where war is waged. For example World War II was waged in Europe initially – you went to Europe to fight the war. Well the war right now is in Hollywood and when you set up a shop in Redmond you are mixing with words.

The contradiction is they are playing war but they are not playing in the right place. We are here to help them actually understand the strategy and place their troops in the right place.

Recent social and technological developments are creating the concept of a digital lifestyle and we’ve seen an explosion in the number of media platforms that are out in the wild. How many media platforms do you think that people have space for in their lives? The reason I ask this question is because I was looking in my bag earlier on and I had more media platforms in that bag than my entire household had up until about 1995.
Let’s be realistic – what is the dream? The dream is to have one. That’s really the goal.

You know, I picked a brand new Nokia 7610, I think, and I’m finally seeing a convergence happening. Where I have my standard phone, it holds 18,000 of my contacts, shows me video, it’s a 1 mega pixel camera, it will have software to allow me to play MP3s – and now with some of the technology coming up, like Nokia’s visual radio, it can allow me to actually get some data from radio that’s fine.

Obviously it is not a high-quality camera, it is not a high-end MP3 player, it is a good phone and it’s got some decent video – and it’s moving in the right direction.

One device is sufficient and if the phone can be it – and I think it is going to move in that direction dominate that market.

I would like to see one device. Now you are asking the question – how many devices can people tolerate? Well I think that toleration is something that is based upon the actual time parameter. What do I mean by that? We uses to tolerate in XT or AT computer which weighed about 65 pounds with a monochrome screen that would go out every once in a while that had a fan that sounded like an aircraft carrier and it processed real slow. We tolerated it because that was accepted during that time.

Now we have flat screen monitors, we have three gigahertz processors. Right now people can’t accept having a wallet, a phone and a third device – being an MP3 player or a digital camera. The minute we start going over four, to a PDA or going to a GPS, I think we have gone too far.

We use the tolerance limit anything over – you are overboard. Now again let’s talk about that Utopian world that I want to be living in and have one – and I’m happy.

We have seen that today’s platforms mean that there is some exciting content appearing. For example the quiz came called “Come and Have a Go”. It’s live broadcast and it uses the Java mobile phone application tool for the people at home so they can get involved. What other content are you excited about?
Well I think the location based technology stuff that we see proliferating right now throughout Japan is so damned exciting, you know we are able to locate my children and we see this even coming in the States and I know the UK has is too.

Using RFIDS? WiFi child tracking at Lego Billund?
No – let’s take it in another direction. What I find is heinous is that with cheating spouses, their husbands or wives can go out and buy a cheap phone and they put it in their spouses car. They put it in the car and turn it on and they are able to track to see where their spouse is. You know it is getting to a point where it is so inexpensive to do forms of surveillance.

Swatch, the watch making company has a watch that uses location-based GPS, so the parents can easily identify where their children are on a computer screen. You know technology is coming up right now where there is location based technology for cattle. In Montana they are using this – even in Mongolia they are using it for horses right now, where they can track where horses are. That’s cool stuff. It is so inexpensive.

We have RFIDS – sure the technology has been around for 20 years – giant retailers are starting to see how these ideas make sense. We are not going to have to go around and take everything out of our carts have it scanned, put it into a bag and walk out – we can just drag the cart out and be told exactly what we owe and we are done.

That is cool. Now a Java application at a phone – that is mundane.

But we have a Java application which ties together a broadcast programme and provides a new type of content.
Let’s take it this way. My TV is my TV.

My television might have more additions to it being for interactivity – polling, voting, e-commerce and all that – that’s my TV – don’t give me television on my phone. My radio is my radio. Now if I want to use my phone as a radio – I can tolerate that because it is a device that I need to have portable with me because I am conditioned to have a portable with me. If I can get information like Nokia’s Visual Radio is doing, that’s cool, because I’m conditioned to take radio on the go. I’m not conditioned to take television on the go. I don’t want people to be watching TV on the go. We have a society that is suffering from the inability to collaborate right now. Add another one?

What about creating types of content that could never exist before?
I had the opportunity to see this really cool web cam technology that allows me to use my GPS – GSM phone and my camera on my phone to be a live streaming web cam. I could call my son and I could say “Look what daddy’s looking at right now? I’m looking at the Statue of Liberty”. He is able to go to a web page and see what his Dad is looking at right now. That’s cool.

Also, I think Microsoft’s Media Centre really is going to be exciting. It finally takes your pictures, your CDs, your DVDs, your music, your television and aggregates it into one platform and you finally get to use the TV as a true collaborative tool.

What is exciting is taking existing models like television. I hate to use these 1990 terms but time shifting is becoming to reality. The word “TiVo” is becoming part of the English language – you don’t tape TV shows any more you “TiVo”.

It is coming out to where even in Movies “I TiVo’d that”. We have seen it in Sex in the City. There was whole episode around her TiVo was better than her boyfriend because it was consistent and reliable. It is so amazing to start seeing this technology become part of our lives. We are becoming dependent upon it.

For example – I’m in Washington DC, I live in Los Angeles, and I am able to go to my own special web page to make sure I have taped my favourite shows because when I get back to Los Angeles I get excited to watch my shows on my time without commercials. That is so damned exciting. I get home – technology has transformed my life.

So we have TV – we have location based technology devices that are coming out. I actually think where portable media players are going is really hot.

We can take all of our media with us in any environment – I am sitting in a hotel room right now and I am able to link to my server at home which is actually quite easy. I call it KIDMA. If it’s kidma, meaning my kids or my grandmother can do it, that right there just passed the test. These new devices are kidma – they are easy and simple – so I could sit down and listen to all my music sitting in Los Angeles right now right here in Washington DC. I don’t feel like I am away from home now.

The last thing which I get really excited about is the unified messaging technology that is coming out. Are you familiar with this?

Email, SMS etc together in one place?
Let’s take it a little further than that. I now can have the universal phone number – one phone number – and I can travel throughout the world and I can always be reached by that phone number in multiple ways.

There was a company about ten years ago called Wildfire, and there are better ones that allow me to have my own number and it follows me. So right now if somebody calls my number and I’m in Sydney, Australia it will find me and ring me on whatever mobile device I’m on or hotel phone in Sydney. If I’m not there, I am sleeping or I’m taking a shower when someone leaves that voicemail it will be emailed to me.

Unified messaging is so hot and we are starting to see some of the voice over IP companies bring services out.

So tell a little bit about your IBC session that’s coming up.
We’re going to really explore the idea of the platforms that are going to enable these devices.

This is important because anyone can paint a great picture – but tell me about the paint, the canvas and even the talent to make the picture. We are going to show how everything is put together so the technology on the consumer end will work. Interactive television is extremely dynamic and powerful, it is worth billions of dollars in the ad market. An interesting report came out recently from Jupiter Media Metric showing that the stereo-typical 18 – 34 male who everyone thought was playing video games would rather watch Survivor or rather watch television than play video games.

This is exciting – this is what the networks have been saying is true – well the numbers came out yesterday proving it. So that means television has the opportunity not just to become compelling but even generate more revenue. We are going to talk about how television, mobile devices and whatever the next generation media platform is, portable music player, or how they are going to empower the consumer to spend more money and be utilised even more.

How are established content businesses going to make money out of all these platforms then? Where is the business model? We have got lots of media companies out there like the BBC with huge media libraries and lots of resources to be able to create compelling media, but it can be argued that but there is no proven way to get the cash out of the consumer at the other end.
Well I would disagree with that – let’s look at a couple of ways.

One, we know that companies like Apple’s iTunes, Rhapsody or Harmony by real networks – even Microsoft MSN music – they’re generating money. iTunes is reporting some really decent sales not just on the music side that works.
Now let’s take music to the next level and look at fan based sites. Sites that you subscribe to you’re like David Bowie you now are part of David Bowie’s community which will include music, video, emails, chat – people will pay money for that.

Those advanced services that we were talking about earlier like location based technology and phones that might cost two or three dollars a month extra. People are not just willing, they are paying it. We don’t want to use Japan as a good example because their culture is radically different than in the West, but they prove that advanced technology services are worth paying for.

The next is the simple idea of advanced tools for television. Premium channels like HBO and Showtime. HBO has more Emmys than any one single Network right now. We are seeing people paying for premium content on television, which means that the trickle down concept always applies. If they pay for it on television once true broadband – we are not talking about a megabit, we are talking about 5/10 megabits – people will pay for premium content because it will feel like it’s television, coming through a TV.

So when you say it’s not there, it is there, it is in unique situations, but it is going to build and I see the money opportunities.

I think this is probably one of the most exciting times – and I didn’t even say that through the dot com times – one of the most exciting times to be part of this brand new industry.

What about the little media start-ups who are going to be faster moving, more technologically savvy – how are they going to capitalise on convergence?
Think about this idea – News Corporation’s Lucy Hood, who is running it on the technology side, creating content in one minute. Mini series for mobile phones – you are creating content with a cast, with screen writers to create one minute episodics on the phone. They’re going in a direction saying “Let’s look at the money and seize this opportunity”.

Again, you know my position regarding taking television to a phone, I don’t think it is going to work but we are seeing News Corp trying it out, we are seeing companies playing an HD. HD is going to be explosive.

HD is a brand new environment for consumers once HD televisions drops down in price, which they will soon.

So these studios can use tools like Final Cut Pro, even some of the cheap Avid systems to produce HD at a fraction of the cost of two years ago. That’s compelling.

What do you think of iTunes/Motorola deal?
They’re making a slimmed down version of its iTunes jukebox software that cell phone makers like Motorola will install in its wireless devices, to be rolled out in 2005.

That is the right direction. You know, again, back to your second question – how many devices will people be able to tolerate – if you could make my phone do everything – including being a functional music player, because I am conditioned to take music on the go, cool. It sounds like a good start. It’s a good catalyst. I don’t think it is going to be the win-all but it is the tweak to allow it to happen.

We have got content running on different hardware and software platforms and quite often consumers can’t move content from one platform to another because of incompatible DRM systems. How long do you think that is going to last?
Well you know the irony is most consumers don’t know about the limitations of that content.

They are going to find out pretty soon.
They are absolutely going to find out and once they find out they are going to start questioning the ideas – a 99 cent track that I could only have at 128k, only on four different devices, and not at the same time but individually? They are going to say “Well, wait a second a CD is a better value. I got the content at 320k, I can rip it and I can move it to any device”.

I have a feeling the labels will start questioning the value or the cost for certain DRM content. For example, if you want a 328k piece of content with unlimited DRM it is going to cost you three bucks, or maybe making it 99 cents with DRM. The labels have talked about this. I think the labels are going to have to change once the consumers are more educated.

I relish that day because what is going on is horrible, especially when you know the true value of that piece of media that you downloaded. It is extremely limited in its mobility because of its DRM. It pisses me off.

Ken Radio

Ken is chairing ‘Understanding the Range of Platforms – A Multitude of Destinations’ session between 14:00 and 15:30 at the IBC conference on Sunday, 12th September in Amsterdam. Register for IBC here

The IBC Digital Lifestyles Interviews – Simon Perry – Part I

This is the first in a series of eight articles with some of the people involved with the Digital Lifestyles conference day at IBC2004.

We interviewed Simon Perry, the executive producer of the Digital Lifestyles theme day, in a two-part feature that covers on the makeup of the day and question him convergence and other aspects of the media. He publishes Digital Lifestyles magazine.

Fraser Lovatt: Tell me about the four discussion sessions at IBC this year. What are they about and who’s speaking at them?

Simon Perry: When the Digital Lifestyles day was introduced at IBC last year, my aim was to set the scene – to signal the change in the content industry. This year builds on that, by highlighting four specific areas that merit closer attention by the creative, business and technology people.

The day will inform the delegates on the new types of content possible, how to get paid for it, where you can deliver it and the business models around it.

The first session is titled ‘New platforms, new content’.

It is set in the context that, with new content delivery methods comes new forms of content. It’s chaired by Ashley Highfield, director of New Media & Technology at the BBC, and will create a discussion between some of the most experienced and forward-thinking Games, Film and TV people. In each of their fields they are bringing together different strands of content, creating something that couldn’t have existed previously, such as content that migrates between platforms, creating united content.

The second session is about getting paid for content. Up to now, the industry has been focused on protecting the content that they have, which is understandable and technology companies have been more than happy to assist them.

I feel this is a distraction. The really key part is how the consuming public are going to pay for content that they think is worth paying for, whether they receive it to their mobile phone, their TV, via broadband to their PC’s or through an adaptor on to their TV. The methods of payment are as diverse as the delivery methods.

The panel brings together the knowledge and experience of people who are successfully receiving payments from the public for text and video content; others offering payment systems that take small amounts, less that a pound/dollar, online and others that use mobile phones to make payments.

Tim Jones, the CEO of Simpay will be on the panel. Simpay was brought to life by the four major mobile phone networks in the UK. The first stage of their service offers the phone-carrying public to pay for phone delivered content – catching up with the currently favoured premium-rate SMS charging. The next stage is – and this is where it becomes a more interesting example – allowing you pay for any types of content, as well as physical goods from shops, using your phone. It is something that has been theorised for a long time and Simpay appear to be pulling it together now. Tim’s background is particularly interesting. He co-invented Mondex, which as we all know, was the first form of public e-cash in the UK.

The third session is chaired by Ken Rutkowski of Ken Radio, and is about informing the content creators about the increasing range of platforms that are available to them for distributing their content. Within the industry there are different stages of knowledge, expectation and experience of what digital lifestyles will mean to the creators of the content, as well as the public. In this third session they will explore what roles different media play on different platforms and the effect it is going to have on the type of content people produce. Ken’s enthusiasm will lift the best out of the panellist.

The forth session is future business models chaired by media journalist, Kate Bulkley. It will explore the models that will run aside 30-second spot ads; mobile delivery; gaining benefit from efficient delivery to different platforms; generating new revenue from TV. There’s a lot of innovation in this area.

What does convergence mean to you? What’s your internal definition of it?

It’s an interesting word. It’s been around for a long time – and increasingly, over the last six/nine months it has become to mean anything that any marketeer wants it to mean. The original definition saw all devices being morphed in to one device. It’s clear that there won’t be convergence to that extent. It’s becoming less defined. The more it enters everyones vocabulary, the wider the definition becomes. Perversely it’s definition is diverging.

The convergence that Digital Lifestyles magazine focuses on, is how the influx of technology into the creation, transfer and reception of media content is changing the industry. Where media and technology touch, is what’s of interest to us, and the impact it will have.

There is an argument that media has always been a technological activity. From first workings and marking things on cave walls to the development of perspective, to the first film studios to television. It has always been technology-led.

That is probably true. Well it’s not probably true – it is true. The definition of what is technology is a sliding window, isn’t it? Pens, paper and the printing press were all once thought of as advanced technology, and then they slowly shifted to become the norm. I would argue that the window moves more quickly these days.

But media always seems to be at the forefront of technology – many technological breakthroughs are media related and have been throughout the history of mankind.

Technology has certainly had an influence – I don’t know whether media has always been pushing technology, or whether it has always been using the latest technology. It certainly has previously utilised it, and the people who have utilised the technology are the ones that have had the upper hand. Look back to Murdoch in the use of technology in the production of newspapers, originally pioneered by the Eddie Shah with Today.

I think people get business advantage by using technology and media. I don’t think necessarily the mainstream media are quick in adopting technologies and making the most of them, and that’s frustrating. However, this gives a space for the people who are outside the mainstream media, micro-production companies if you will, to use the technologies to create and deliver their content to an audience on an economic basis.

Do you think the public thave an active participation in convergence? Do they see the convergence as something they are getting involved in or do they see it as something that has happened around them? Five years ago they were going out and buying DVD players and now they are buying PVRs – Do you think they are seeing it as progress or just something new to buy?

Let’s use digital music, because that’s quite a good example. One of the articles on Digital Lifestyles today covered the Virgin Music Player, a little thing you just hang on your waist. People will obviously notice that they don’t have to carry around a bulky CD player or a mini disc player or a cassette player, but as to whether they realise that the changes are wider reaching than that – I doubt it. It will feel like another small step.

These days people are now conscious of change. They have come to expect things to change. They are becoming numbed to the “Oh my god” reaction, when they come into contact with a new use of technology.

The people in the industry see it as significant, because they see the long-term impact.

One of the ironies I perceive with convergence is that the media itself, those pieces of entertainment like music, film and to some extent e-books, are becoming fragmented through platform and DRM issues. Do you think that we will be happy buying three versions of the same thing in the near future because the DRM or file formats are incompatible, or do you think that this will be resolved gracefully?

Incompatibility is a fear of mine and yes, in the short term, it is likely. It’ll happen because of the number of incompatible content protection systems that are around. I think the industry, whether it be the providers of content protection or the media companies, which are using the content protection systems that don’t allow interchange between devices are going to do themselves a disservice and, if it continues, will frankly end up irritating the customer.

I have asked the question to quite a number of people in the media business and technology business – I have never really had a good answer from them either. How do you sell the public something that’s less good, through it’s restrictions, than the thing that is being replaced? Something that ends up flexible, even though the form it is held in allows greater flexibility? So, short term I think it probably will be a problem. I hope that it won’t be a problem beyond the short term.

It can be argued that a lot of the fragmentation that we are seeing in media in file formats and devices is down to proprietary systems that are involved in the creation of media, and in its protection and distribution so we have DRM, we have CDs which can’t be played on PCs. These are all proprietary. Do you think there is a place for open standards in a convergent media culture?

I think the reason this hasn’t happened so far is that the prize is so enormous. The prize for being the provider of content protection is to be one of the largest businesses in the world. Much commercial material will only reside in the rights holders-approved DRM formats; ones that they feel protect their interest. That’s not to say that there won’t be a huge market for other content in another format, and that could be an open format.

Do you think that one company will be allowed to hold the keys for content protection?

Who is going to stop them? Are you talking about Government restrictions?

Some view it as a monopoly.

Certainly from the discussions I have had with content creators of the large studios, there is an unease with a number of companies holding all of the keys. There have been many suggestions as to the way that could be got around. One I found interesting was Fraunhoffer’s Light Weight DRM (LWDRM), but it still relies on a central repository that decides whether you are entitled to this music or that you have paid to have access to it.

The Fraunhoffer response to that question is to say, well we place that with a third party – so you split up the business of running the content protection system away from the business of holding the keys to the access to that content. Their suggestion was that it be done by institutions like the German post office. Different nations have got different relationships with their governments. So that’s something that might work in a country such as Germany, but not others.

There are two arguments – on the open source side there are many people, the Electronic Frontier Foundation (EFF) for example, who argue that there should be no content protection and people will pay for their content, relying on the good nature of man.

Rightly or wrongly, that is not how the mainstream media industry sees it. But if you look at companies like Warp Records, they sell their music in MP3 format. They have taken a more open file format, which can be exchanged quickly between different formats and difference devices. The consumer in me sees this as completely reasonable. I buy something and then I am able to put it on whichever device I want.

I did some research for the European Commission on a unified media platform called N2MC and it became clear from speaking to a wide range of people, along the whole creation-to-distribution change, that the idea of an open source content protection system didn’t currently work for them.

Because it could be easily reversed engineered?

It was seen as a weakness in the chain. One part of a content protection system must remain proprietary.

This interview is continued and concluded here.

Simon is chairing ‘The missing piece – Getting paid for content’ session between 11:30 and 13:00 at the IBC conference on Sunday, 12th September in Amsterdam. Register for IBC here