Hyperdistribution

First draft 16 Mar 2002
Second draft 20 Oct 2002
Third draft 22 Oct 2002

With the advent of the Internet, a global network providing the capability to the general public for peer-to-peer transfer of digital media, it no longer makes sense for the media industry to use the existing producer/publisher/distributor/consumer one-way pipeline business model since a larger proportion of the public are capable, willing and interested to act as producers, publishers and distributors.

People like to share media so they can share the experience with others, and also to promote works they enjoy in order to honour the creator(s) by assisting them in gaining wider recognition. Rather than rewarding people for this, big media companies are making it illegal for anyone other than their authorised distributors to do so. This hampers distribution and recognition of works and artists, goes against societal and cultural traditions and desires, and hence creates ill will with the audience.

I propose a system which leverages people's desire to share media rather than opposing it and provides additional incentives to do the right thing while making it possible for creators, publishers and distributors to all make money on the distribution of digital works.

In this system which I name "hyperdistribution", the license under which the copyright holder offers their work(s) must explicitly permit redistribution of each work providing that metadata including the license (or an identifier such as a URL indicating where the license can be obtained online), attribution (title and author of the work) and a valid registration number are distributed together with the work. A registration number is valid if it exists in the database of registration numbers issued by the publishers. Failing to comply with these terms constitutes a breach of the license and continued use and/or distribution is a copyright violation and theft of the work.

The initial registration number(s) issued with a work would of course be those of the initial distributor(s), which might (though not necessarily) be the publisher themselves.

As with shareware, anyone can choose to register their copy of a work. To do so they must provide the registration number on their copy of the work, which of course under the terms of the license must be a valid registration number. If the registration number is not valid for some reason they will need to obtain a valid number from another distributor.

In return for their payment to the publisher, they are issued a new registration number for the work which they substitute for the registration number originally on the work when they received it. They may of course continue to distribute the work under the terms of the license.

When a copy of the work is registered with the publisher, the publisher is able to use the supplied registration number to identify the distributor and pay them a percentage of the registration fee for their efforts. Additional incentives could also be offered to particularly effective distributors, perhaps including the kinds of promotional material normally offered to conventional offline distributors and retailers.

Note that under this system, distribution is encouraged rather than discouraged, and the ratio of paying customers might be expected to exceed that of shareware since customers also stand to receive financial and other benefits from registration.

I do not claim that this system will suit all creators, publishers and distributors of digital media. However I believe it provides significant benefits to creators whose primary interest is in maximising the distribution of their work and hence their brand value and reputation, as well as providing at least as high a financial return as shareware.

Since reproduction and distribution costs are often significant to less well known creators, this may well be a very good deal - better a small percentage of extremely wide distribution than a higher percentage of very limited distribution.

Publishers will need a database to track registrations and one or more systems for accepting online payments. They can then provide an online system for making a payment, issuing a new registration number and paying the percentage to the distributor.

While any and all online payment systems can be used, systems which are designed not to distinguish between payer and payee are more suitable, since many people will be in both roles. Systems which support micropayments would also be advantageous to permit immediate distributor payments rather than having to batch them. "E-gold" is one online payment system I am aware of which provides these features, but I welcome information about others.

Security considerations

This system involves two roles: the publishers and the audience. Audience members may choose to register or not to register works and to distribute or not to distribute works.

Publishers can, on receipt of registration payments, fail to pay distributors the percentage as stated in the license agreement (for example by falsely claiming the registration number is not valid). This would damage the reputation of the publisher and put them at legal risk due to breach of contract. Distributors would still gain the benefit of permission to legally distribute works but lose the additional incentive to actively promote those works. Alternatively a publisher can cease to accept registrations altogether with no ill effects other than the reduced incentive for distributors to actively promote the work.
Since the hyperdistribution license agreement only covers the terms under which works may be distributed, audience members who choose not to distribute works cannot be in breach of the license. Those who do choose to distribute works can fail to honour the terms of the hyperdistribution license agreement, for example by altering the work or altering or removing the metadata. This would damage the reputation of the distributor and put them at legal risk due to breach of the terms of the copyright license. Publishers should provide a checksum or hash of the original work to assist in detecting intentionally or accidentally altered copies of their works. Systems such as Bitzi may also be useful here. Providing an invalid registration number would merely result in recipients of those copies who choose to register them obtaining a valid registration number elsewhere, for example from the publisher themselves.

All the usual security considerations that apply to all financial transactions also apply to the registration and commission payments in a hyperdistribution system.

TODO

Sample hyperdistribution license agreement
Why voluntary payment? Compare with shareware

Note added 2 Jun 2002 - Cringely got it in February!

Comments are welcome via email to Andrew Pam <xanni@xanadu.com.au>.

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