Digital Media and the, ahem, Business Model of the Future

Nicholas Sheppard

I worked for some years as a researcher in copyright protection technology, though my funding has long ended and I've since moved on. Digital copyright issues probably don't generate quite the fuss they did back in the hey-day of Napster, and this year I discovered that the ACM Workshop on Digital Rights Management — where I think some of the most interesting work in this field was presented back in its own hey-day — is no longer on the calendar. Does this subsidence indicate that issues of copyright and digital media have now been settled to everyone's satisfaction, or just that my former co-travellers in digital media and security have gone off to write about more current headlines, like Facebook's privacy policy?

One recommendation that I heard over and over again is the one that the music industry must combat infringement of its copyrights by "getting new business models." Ironically, perhaps, one of the original hopes for rights management technology was that it would enable new business models based on paradigms other than the exchange of physical copies, not usher in an era of confusing and inconvenient rules of use.

Retailers have, in fact, tried a number of different business models — possibly more than critics give them credit for — including subscription services like Rhapsody, ad-supported services like Spotify, "viral" services like PotatoSystem, and bundled-with-device services like Nokia's Comes with Music (now largely defunct). Well-known bands Nine Inch Nails and Radiohead even tried giving their music away for free or in return for a donation, though neither of them is doing it any longer.

By all accounts, though, the most successful retailer of digital music is Apple's iTunes, which charges a one-off fee for a recording to be kept and played as often as the buyer likes. Sounds rather like the old business model to me.

Might it be that music listeners — or the ones willing to pay for the pleasure, at least — are not as interested in new business models as would-be copyright reformers thought they would be? And did we go through all of that Napster-inspired anguish only to find ourselves doing exactly the same thing as before?

Not quite, obviously, since Rhapsody, Spotify and others do have customers — even if it's not so many as iTunes — and there may be factors other than business models contributing to iTunes' success. One certainly hopes that we've learned a thing or two from the experience.

The video industry, intially protected from file-sharing networks by the time it took to download a video around the turn of the century, is one that has had chance to learn from the experience of the music industry. The trend for copyright protection technology here has been towards so-called "rights locker" services like the Digital Entertainment Content Ecosystem's Ultraviolet and Disney's KeyChest, along with infringement-detection systems like YouTube's Content ID, rather than the copy-prevention technology that the software and music industries experimented with in times past.

A rights locker is, in essence, an Internet database that records a buyer's right to use a song, video or book. When the buyer wants to access the item, his or her device checks with the locker that its user has, indeed, purchased the right to use it. If well-designed and -implemented, rights lockers might eliminate some of the inconveniences that customers experienced with copy-prevention technologies, including incompatability, an inability to format-shift, and an inability to make back-ups. They also seem to fit nicely with the pay-once-for-eternal-usage model that we have become accustomed to.

Rights lockers, however, don't actually work very much like the books, CDs and DVDs that got us used to the pay-once model in the first place. Since the right to use something is governed by a record in a database rather than possession of a physical copy, it looks more like an "access right" than a "copy right".

How much does this matter? It certainly matters to lawyers, for whom an "access right" and a "copy right" could be quite different things (see Marcella Favale's analysis of EU law for a recent example). But will the average user continue to think that he or she owns something, even if it is an entry in a database rather than a physical book, CD or DVD? Or will the user get used to the idea that "this work is licensed, not sold", in the words of many a software agreement? And, if the latter, will he or she be more likely to explore alternative business models?

Once more unto the breach:* Printing the next revolution

Matthew Tracey

3D printing will change your world.

With that bombshell out of the way, let's work out how and why.

3D printing, or additive manufacturing technology, is very similar to traditional 2D printing. 2D printers overlay ink on paper to produce physical representations of a digital file. 3D printers use similar technology but utilise metals, plastics and even food as their 'ink'. Where traditional printers could use a variety of file types (such as .doc, .jpeg or .html) to produce a printed page, 3D printers use computer-aided design (CAD) files that contain the physical specifications of the object to be printed. 3D printers use these files to construct an exact copy of the object, layer by layer. The software in the printer transforms a CAD file containing the dimensions of 3D object into slices. So, if you were printing a scale model of the Empire State Building, the printer would squirt out layer upon layer so as to construct the model from the ground floor to the point. In combination, these layers produce a tangible 3D object.

3D printing in action

Questioning 100 years of manufacturing history

The history of manufacturing is essentially a history of economies of scale. Revolutionised by the production methods of the Model T, Ford utilised scale in such a way as to reduce the marginal costs of production with each and every finished vehicle. At least theoretically, large-scale manufacturing means lower production costs and, in turn, lower purchase prices for consumers.

Let us be daring for a moment and dispense with one hundred years of manufacturing theory and practice. What if marginal costs were constant instead of depreciative? How would that change how we operate as a society?

Say for example you're at home and you've just finished dinner. You're loading all of your dirty dishes into the dishwasher and you find a broken locking mechanism that keeps the squall inside the dishwasher otherwise contained. Instead of sending for a replacement part from the manufacturer and waiting the requisite time for it to arrive, imagine downloading the CAD file from the manufacturer's website and printing off a replacement. Online technology blog Ars Technica has opined that just as online shopping made bricks-and-mortar retail stores appear quaint, 3D printing will do the same in respect of waiting for shipping to arrive from an online retailer. Importantly, 3D printing means that the cost of producing the first object is the same as the cost of producing the thousandth. This equation is perfect for individual consumers who only need one object.

The response from industry and what lies ahead

The rights associated with patents, copyrights, registered designs and trademarks could be infringed through 3D printing. For example, several websites currently offer unauthorised replicas of designer goods in CAD files for download. the3dstudio offers a CAD file of a Mario Bellini Ultrabellini chair for US$20 where a set of four authentic chairs retails for in excess of US$1000.

Unlike Sony in respect of VHS and Napster in respect of MP3s, rights holders have not yet brought 3D printing under any real fire. This is partly due to the lack of consumer-priced devices in the marketplace. However, since websites such as the3dstudio essentially operate as a vehicle similar to Napster (in that they provide a central source for the distribution of authorised and non-authorised material), legal intervention is increasingly likely. Analogous to the recent iiNet litigation, there is a risk that any site which hosts CAD files could be the subject of secondary infringement and authorisation claims. Like YouTube in response to Viacom, online distribution portals may need to have infringement detection and take-down mechanisms in place in order to assuage the appetites of litigious rights holders. However, like many industries' adaptation to new technologies, there will inevitably be winners and losers.

The scope of 3D printing is set to expand to compromise other traditional aspects of mass manufacturing. By way of example, Cornell University has had some success at producing food with 3D printers. The ramifications of printing food will stretch far and wide and will undoubtedly cause us to reconsider how we think about farming and famine.

The internet has ideologically entrenched our demand to have anything anytime anywhere. Traditionally, this demand related only to information. It is now clear, however, that in the future we will be able to print our cake and eat it too.


*'Once more unto the breach' is from the 'Cry God for Harry, England, and Saint George!' speech of Shakespeare's Henry V, Act III, 1598.

Video by 3DCreationLab, published under the standard YouTube licence.