Unless you’ve been living in a cave since June of 1999, you know that most people like the convenience of digital music and movies. You also know that the record labels (RIAA) and movie studios (MPAA) have been falsely claiming for that entire time that piracy is cutting into their “legitimate” sales. I’m going to tell you (and them, but I already know they won’t pay any attention) how to make piracy unattractive, improve their public reputation and customer relationships, and (probably) increase sales.
A system to do all this must be easy to use, convenient, and safe.
In order to do this, you need to create a digital distribution system that is easy for the consumer to use, allows the consumer to access his purchases on every device that has the hardware capability to play the media you have sold him (convenience), make it affordable, and maintain tight security over the consumers’ personal and financial information (to maintain trust).
How to make it easy to use? Web-based rentals and purchases, without any proprietary garbage like iTunes, etc.
How to make it convenient? Eliminate DRM (or as I believe it should be called, adhering the the truth-in-advertising principle, “Technology Users’ Rights Denial Systems,” or TURDS for short). Make it possible to access music and video on every device that is capable of playing the media; PCs, Macs, and Linux systems can all handle Web-based media, smartphones can download files and play them locally (this is preferable to streaming over 3G/4G/LTE because of both reliability of the signal, and bandwidth caps by cell carriers; most smartphones also have Wi-Fi capability), set-top boxes like the Roku and Patriot Box Office can stream like a PC, and other portable devices can sync to a desktop or laptop computer system through USB, bluetooth, or Wi-Fi.
By making it affordable, you play to the consumers’ sense of fairness and allow him to feel smug about buying your product, instead of pirating it. According to a study in 2009 (and many others since then), music pirates actually buy ten times as much as they “steal.” If you make it easier to buy, and price your product fairly, you can increase that ratio quite easily; people want to obtain music and videos honestly, but the RIAA and MPAA have made it difficult. Personally, I think under a dollar per track for MP3 music (the “gold standard”) is fair for music, and the same for a one-time rental of a video stream. Purchase of the a video should be less than ten dollars for newer releases, and five dollars or less for older ones. It’s also important to ensure that the one-time rental actually can be watched all the way through, with fast-forward and rewind capabilities, even if the consumer gets all the way to the end of the video. The easiest way to do this is to not start the rental period until the consumer actually starts the stream, and not terminate it for 24 hours after that. That way, if he’s interrupted during the viewing, he won’t feel cheated, because he knows he can go back later that day or the next day and pick up where he left off. Rental periods should *not* arbitrarily start when the purchase transaction is made. If you allow me to rent a movie today and watch it later in the week, I am more likely to rent several movies when I have a couple of spare bucks, rather than buying a candy bar or other snacks. Netflix, of course, is the way to go for the consumer; “all you can eat” for under ten bucks a month. With that price, there’s no incentive to pirate videos that are available on Netflix. Of course, the movies that aren’t on Netflix remain as piracy targets.
Purchased music and video should be downloadable in a customer’s choice of formats; MP3, FLAC, and OGG should be available for music, and video should be accessible in MP4, WMV, DivX, and possibly other formats, in a variety of resolutions, to accommodate different playback devices. At the very least, 720P and 1080P formats must be available. Ideally, the purchaser should be able to log in to his (Web-based) account and download the video in any format at any time, on any computer or device, once it has been purchased, and continuity of access plans MUST be made; the consumer needs to know that, in the event Blah Studios goes belly-up, whoever purchases the remains will continue to provide access to content the consumer has paid for, or else the consumer will feel a lack of trust, and probably choose to obtain the video another way – one which will not gain any money for Blah Studios.
Finally, the consumer needs to know that his information will not be sold (other than as part of the necessary baggage to ensure continued access) nor easily stolen; Sony’s PSN and SOE are perfect examples of what you should *NOT* do. The bare minimum of security consists of:
- Require a secure connection for rentals and purchases (HTTPS: or whatever comes after it)
- Encrypt usernames
- Use a one-way hash to verify passwords, and never store the actual password at all.
- If you absolutely must store credit card information, store it using strong encryption, and in an electronically-isolated way so that an intruder can’t gain access to both usernames and cred card data with a single intrusion. It’s better to not store it at all; consider using a third-party payment processor, so that you don’t ever need to “see” the actual method of payment.
- Keep all of your servers up-to-date with security patches
And that’s the basic business plan for digital music and video. Let me know if you start one up; I’ll try it out!