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Making Money with Streaming Media

At a very low level DRM systems provide a lock and key for your content. Using extrapolations of this concept, DRM platforms are able to provide more and more complex marketing and sales vehicles which webmasters can utilize to increase the reach of their businesses.


By Christopher Levy
February 3, 2003

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It’s unknown what the annual revenue of the Streaming Media industry as a whole is each year but I would venture to estimate it to be about half a Billion dollars of services and goods in today’s downturn economy. When I sat down to write this piece on Digital Rights Management and how to deploy it effectively a good friend of mine said make sure and talk to your audience as a whole and realize they are all working to make money in this industry so keep it to the point.

So to that note, what is the point of Streaming Media? I used to get this question posed back to me many times in the late 90’s as I stood cornered in the IT Director’s office at Fortune 500 Company X awaiting a signature on a six figure purchase order for streaming media services to be rendered in the not-so-distant future. Before the day and age of the IPO blowup and the inevitable “dot-bombing” of the dot com industry, money was king and my partner had taught me to simply look the customer in the eye no matter what their level of understanding was of the technology and say, “To make money.”

And now, more than ever, this one simple message rings true as we look to a new year with an unknown horizon ahead for the Streaming Media Industry in 2003. In the past year we have seen a lot of innovative technology and services make it to the marketplace and with continued dedication and innovation we should see continued growth in the industry with a steady two year growth putting the industry at a Billion dollar value proposition.

From time to time every industry takes a look at where it is and what it needs to do in order to secure long term stability and revenue growth. One industry which has begun this process recently is the Recording Industry which lost a rumored 2 Billion in valuation because of theft and re-transmission of their principle product which is composed of zeros and ones considering most modern music is sold in CD format.

It seems like every day there is a new article about DRM and how it is going to be the cure-all solution for a theft-plagued internet. Last month’s Wired magazine featured a whole article about Sony and Microsoft’s battle to be the DRM standard. The term DRM continues to have various different labels and features to different writers and to make it worse now there is DRM for CD’s and DRM for HD and DRM for what next who knows?

What we do know is that today, now, there are a variety of mechanisms which are available to protect your or your customer’s streaming media content from being stolen. Some of these applications require plug-ins be installed on your streaming media server and some of them require that you only deliver your streaming media using a dedicated server with one-to-one connections. This article will take a more in-depth look at the most common form of DRM which is file-level DRM.

Using file-level DRM streaming media creators and hosts have the ability to “lock once and deploy many” with a very simple and transparent architecture which allows for more seamless integrations within the enterprise. Surprisingly enough, file-level DRM applications are nearly invisible to their CDN or web hosts and require minimal integration with any front end website authentication scripts which may be in place prior to the DRM deployment.

Since this article is about making money using streaming media, let’s take a look at three simple ways to use file-level DRM technology to make money for your customer or your business. To appeal to the biggest audience possible we are going to use the DRM product from Microsoft for our examples given that the Windows Media player is the world’s most deployed streaming media technology in the enterprise.

Next Page: Sell Your Customer’s Content Online >>

Sell Your Customer’s Content Online
This one is going to be a shocker for a lot of you and for years it has been almost too taboo to even say this. It was always so much more fun to just give streaming media away. Then DEN and iCast came along and suddenly losing millions a year producing and delivering streaming media files for free wasn’t cool. And for some reason no one could figure out who all those people were that came and watched these movies and music videos and concerts.

Right about this time Microsoft’s Digital Media division went to work manufacturing a template by which any Windows Media provider could protect and monetize their streaming media assets. For many years the technology has evolved overcoming some bad press, a security breach and a sluggish market in general to become what it is now, a robust, secure and scaleable conditional access platform that you can make money with. Using the lock and key methodology which is built into WMTRM SDK framework [A big military sounding acronym for Windows Media Technologies Rights Manager Software Development Kit] DRM service providers are able to provide an independent content creator, movie studio, record label or Fortune 500 marketing company the ability to actually monetize a streaming media file.

Step One: Make a Buy Page For Your Customer’s Content. This always gets the creative juices flowing with any customer and it helps to distill what pieces of the offering need to be completed. On this page your customer can decide how they want to sell their content whether it is PPV, Token or Subscription models. They can choose the sell their full-length movies each month for $19.99 for example or assign a value of $2.00 to each token and make each movie 2 tokens. If their content lends itself to being watched offline at the customer’s pace then your customer can make a $5 pay-per-view offering available to their users.

Step Two: Pick the appropriate License Rules for their Business Model. Modern DRM is sophisticated stuff and the license holds a lot more than yes or no these days. Your customer can decided on how many times they want their content viewed by the purchaser and for how long and on how many PC’s etc. Combining a variety of these License Usage rules makes a Business Rule which should most replicate the customer’s vision of how they want to do business on the web or matches their current business in motion.

Step Three: Lock Your Customer’s Content. There’s nothing more unattractive than an un-locked file on the road to profitability and let’s face it, you don’t get a second chance to make a first impression. Typically, DRM providers can accept your customer’s content via ftp or sftp and can encrypt or package your content in bulk in an automated fashion. After packaging, your content can be ftp’d directly to your CDN account or hosting platform.

Step Four: Find A Processing Agent and Integrate. These come in a variety of forms including Credit Card, Check, Dialer or even PayPal. Your customer has to make the decision however there is a wealth of processing resources on the web. If your customer has a merchant account with a processor in place, setup a call with them to talk about how you would like to integrate your buy page success stories to your DRM licensing processes. Your DRM provider should be able to work this out for you at a low cost and look for a simple solution which is easily modified in the future and one that uses the same username and password list already in place on the customer site.

Step Five: Post It and Push It. DRM is more than a lock and key. It’s a switch and you’re holding it. Once your files are locked and your buy page is done and your processing is integrated it’s time to go to market. To be successful you will need to drive traffic to your buy page and be ready for feedback. Take notice of the traffic and how the users respond to your presentation. If you don’t get good click thru’s change it up. Add a free trailer and be willing to adapt your pricing based on customer feedback. If a partner site isn’t holding their weight and delivering you the eyeballs, don’t be afraid to strike deals with new traffic affiliates. Make sure your payouts for partners and affiliates are manageable and don’t ever payout more than you charge per month to each affiliate for a join.

Using the common statistics available your customer will be able to see all the usual data that they are used to for streaming media along with such things as the name and email address of their viewers, how often they watch media they consume and of course what they like. Using all of this data, your customer can make an educated guess as to how successful their offering is and how to make it better focusing on the pieces that are most popular while working towards gaining market share in their respective niche.

Next Page: Give Your Customer’s Content Away For Free

Give Your Customer’s Content Away For Free
Huh? I know I just told you above to sell your customer’s content and make money right? Like I said this isn’t a conventional space so maybe your customer doesn’t want to sell their content. That’s fine. But wait, they may not want to REALLY give it away for free… not considering what is available in return.

Maybe they want to increase their branding using a piece of leased content or maybe they want to put a message out about a new product using more viral means or maybe they want to just collect email addresses for a future campaign.

Regardless of the situation, let’s face it, people are willing to give out their email address to get something they want which is why most Netizens have 2 or more email addresses. So keep your customer’s users in touch and start building your customer a list to market to. If anything they will get invaluable marketing research at low cost with instant uptime.

Step One: You Need Some Eye Candy. Get some short and legal content that your customer owns and can be used for the job at hand. It could be a trailer or maybe it’s the commercial they spent all that money on during the Super Bowl or maybe it’s a music video that one of your customer’s artists just spent their last 20K on. Maybe it’s that funny voicemail left on your technical support line at 0200 AM on Sunday. Either way make sure it’s encoded in broadband 300K or higher and the audio is crisp and clean. Every bit helps.

Step Two: Create and Compel. It’s just an email address but your users want to be courted a bit so make it original. Take a marketing slogan or product theme or inside joke and make a simple pitch in HTML. Using WMT DRM you can then give this pitch to your DRM provider and they are able to embed this marketing message or branding in the initial window that pops up when a user wants to access this file. In your pitch the user can be instructed to enter their email address or choose their sex or pick their age. All of this information is collected by the DRM Service Provider and should be available to you online within near real-time. Failed attempts due to invalid emails or responses can be re-directed to a catch all site.

Step Three: Cast The Net. Since your customer’s content is locked at the file-level it can be delivered to end-users many different ways. These include using conventional streaming media delivery techniques, ad-hoc CDN services that combined CDN and P2P, straight P2P channels, email, web download and more. There are no boundaries now and for your customer, they get instant feedback as the content is accessed. In fact, your customer can even encourage end-users to recommend and forward on their content in effect becoming the transmission medium and increasing the reach of the brand.

Step Four: Add It All Up. Once your customer has run their campaign and reviewed all of the data collected they can better understand what type of audience is interested in their brand and the composition of this audience. Using this data, they can then compile better pitch opportunities for their sponsors or partners or internal customers. There’s nothing better than hard data and file-level DRM provides the most accurate look possible at your user in real-time.

Next Page: 3. Cut Down on Excessive Use and Theft >>

Cut Down on Excessive Use and Theft
This one may sound intuitive but you won’t believe how many people year after year after year continue to lose money overpaying for bandwidth or losing the edge on the competition because some geek at the other guys shop got a copy of the new sales and marketing materials for next month’ show. I remember one point in 2000 when you were able to freely watch the company meeting of a well known CDN in all its glory and ugliness. What this company would have given to have kept that file out of the hands of the competition if to only save face.

Step One: Use Silent Licensing. If your customer just wants to prevent theft of their content, the silent license function in WMT DRM allows for a user to watch a piece of content for free with a silent license being passed to their player before they play the content. This typically happens in less than three seconds and for the most part is completely transparent to the user.

Step Two: Use Instant Revocation. When it comes time to expire an internal communication or presentation, your customers are able to instantly shut down access to a piece of content or whole directories of content with one click. Whether the message got leaked or it’s just plain old, your customer will have the option of controlling the message and the medium at their desktop.

File-level DRM is not the final word in defending your assets on the web however combined with a holistic overall security policy, DRM can be your most effective tool in preventing excessive bandwidth usage related to your content. If your customers streaming media bill is starting to get out of hand, file-level DRM gives your customer one more way to balance out their expenditures and cut down usage by unauthorized or unwanted parties without a high cost of implementation.

About The Author
Christopher Levy is President of NFA Group, a leading provider of World Class DRM technologies in the Entertainment and Media Markets, Levy has been a driving force in the rapid evolution of the Streaming Media industry. After founding ClickHear Productions in 1995 and later leading the sale of the company to CMGi for nearly $6 Million, Christopher invented and led to market "streamOS", the industry's first Overlay Content Management/Delivery Platform for publishing streaming media across multiple Content Delivery Networks.