Commercial Exploitation of Digital Assets

As a continuation on the theme of my previous article on Finding Inspiration from Metadata Standards, I wanted to discuss the challenges surrounding the development of metadata models for the commercial exploitation of digital assets.

One of the benefits of developing a business in the field of digital media is the versatility and flexibility that file-based digital content affords you. However, with these benefits, comes the potential for increased complexity in how you manage the metadata for your digital assets. That is, if you want to be able to take advantage of the many new opportunities that are now available to you. I frequently say to people, “You may know what business you are in today, but are you certain you know what business you will be in tomorrow?” The pace at which businesses must adapt to threats and new opportunities today is significantly greater than just a decade ago. And from what I can tell, there are no signs of it slowing down anytime soon.

So, what are some digital asset management strategies you can apply today, that will help keep your organization competitive tomorrow? My response to this question is to try to learn from others, perhaps from other industries, who may have had to address some of the challenges that your organization or industry is just now beginning to address or will likely need to address in the future.

When it comes to commercially exploiting digital assets and experimenting with new business models, there is a lot one can learn from the music industry. It is easy to discount this statement from what you may have heard from popular news outlets about the troubles the music industry has experienced over the past decade. However, the music industry was the first of the media industries to have to address these challenges head-on and they have been doing so for well over a decade now. As a result, they have gained a lot of experience and it shows when you look at the data models they have developed and included in their metadata standards.

For the past 10 years, the technical leaders at many of the record labels, collecting societies and digital retailers have been collaborating on a regular basis to try to develop the type of metadata standards that try to increase clarity and reduce frictions in their day-to-day business communications. The results of this effort can be found in the Digital Data Exchange (DDEX) standards. I would like to focus on just one aspect of the DDEX standards, which addresses the commercial exploitation of one’s digital assets.

The DDEX standard is a XML data exchange metadata standard, which is used to exchange information between business partners. Content owners wanted a standardized way to communicate to their business partners, that would clearly describe the contractual terms in which their digital assets could be commercially exploited. Music can be used and consumed in so many different ways; great effort was made in trying to define data structures that were versatile enough to handle all known cases.

The DDEX standard encapsulates all its commercial exploitation information within what they call the “Deal” data composite. While no metadata standard is perfect, I think DDEX has done a very good job in expressing the combination of elements that one would need to describe the many possible dimensions required in the majority of business scenarios that exist in today’s digital marketplace. So, let’s take a tour through the “Deal” data composite to highlight what is there and how we might be able to learn from or repurpose some of the ideas for use in your business and industry.

Let’s start with the basics. The first thing to consider is territory information. Every “Deal” must specify the territory for which it applies. Every country has its own unique laws in terms of taxation, intellectual property and decency of which one must be cognoscente. In addition, each territory has its own cultural standards, business environment and popular methods of content consumption that one must consider when defining the commercial terms of a digital asset. Most obvious though is the wholesale and retail pricing, which must be specified in the local currency. Finally, content owners need to define the start and end dates that these commercial exploitation terms will apply due to restrictions defined by other licensing contracts, release windows and marketing campaign schedules.

Once the time and place for which the digital assets can be commercially exploited is defined, the next area of focus for definition is in the content’s “Usage”. Defining content “Usage” is more complex than it may first seem. Content “Usage” encompasses not only the means by which the consumer will access or experience the content (download, on-demand stream, conditional download, content influenced stream, non-interactive stream, ringtone, ringback tone, etc…) but may also describe in detail many of the other conditions that surround the act of accessing and experiencing the content. These may include the type of device or user interface the consumer is using (mobile, kiosk, personal computer, game system, home entertainment system, broadcast receiver, physical media writer, etc…), how the content is delivered (wired, wireless, satellite broadcast, terrestrial broadcast, p2p, physical media, etc…), as well as the type of carrier on which the media is allowed to be fixated (CD, DVD, Blu-Ray, VHS, etc…). Each unique combination of “Usage” dimensions may dictate its own set of restrictions or price differentiation. Because of this, the standard must support the ability to explicitly define commercial terms for each described “Usage” combination.

As complex as this may sound already, there are other dimensions one might need to express in combination with “Usage”. For example, one may want to tailor the deal terms for their digital assets to be more or less favorable based on what type of business model their business partner is using. If the content is being included in a monthly subscription service, the content owner may want to restrict certain types of Usage or include incentives for subscribers to purchase the media. If one’s business partner operates a media rental business, content owners may want to define the length of the consumer’s rental period. Or if the business partner is a promotional outlet, the content owner may want to define the number of free plays the consumer will be allowed.

Another consideration that could affect the commercial terms is a digital asset’s technical specification or quality such as encoded bitrate (SD, HD, lossless, etc…), number of audio channels (mono, stereo, 5.1 surround, 7.1 surround, etc…), 3D video, etc…

In recent years, there has been some experimentation around offering the consumer the ability to pre-order content before it is released. Defining the terms of when a pre-order deal can be advertised publicly and the price incentives offered to the consumer must be able to be defined and communicated to the retailers.

Don’t forget about digital returns. Yes, you read that right. The concept of a digital return was introduced by iTunes a while back. iTunes allowed the consumer to purchase individual tracks on an album but would credit them the cost of those tracks if in the future, they decided to buy the whole album. iTunes would message back to the content owners that they were issuing a digital return. Allowing or disallowing digital returns was an unexpected communication requirement that most content owners were initially unprepared to handle.

The last significant component of the DDEX “Deal” describes a means by which content owners can tell their business partners that they no longer are allowed to offer the digital asset to the consumer. I mentioned earlier a start and end date within the commercial terms but this is slightly different. There are times when a content owner suddenly loses the rights to distribute a digital asset to their business partners. This can happen through expiration of a license agreement, a lawsuit, or transfer of ownership. No matter what the reason for the sudden change in distribution rights, the content owner must quickly notify its business partners and let them know they no longer have the right to license them a particular digital asset and the business partner must remove the ability for the consumer to access it.

Clearly, commercial exploitation of digital assets is complex today. I feel fairly certain in saying that it is likely to get even more complex in the future. If some of the circumstances described above apply to your business today or you foresee your industry trending towards some of them but are not sure how to best handle these types of situations, I recommend taking a look at the Digital Data Exchange metadata standards. There may be some data modeling techniques that you will find useful in keeping your organization agile so that it can take advantage of new opportunities or stave off new threats and remain competitive in the digital marketplace.


Nick Sincaglia

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