Digital distribution

Digital distribution (Also known as digital delivery) is the principle of providing digital information or content over the Internet, either in the form of products or services. It has been growing steadily and increasingly rapidly since the turn of the century thanks to the rise of consumer broadband. At the time of writing digital distribution's main uses include:

Each of these forms of information can be easily digitised, if they are not already, and most can be transferred over a standard broadband connection to all intents and purposes instantly.

Basis

The major attraction for digital distribution is its direct nature. Usually to make a commercially successful work an artist must enter his or her industry’s publishing chain. Publishers help artists advertise, fund and distribute their work to retail outlets. In some industries, particularly videogames, publishers are so vital that artists find themselves bound to them and in many cases unable to make the content they want because the publisher does not believe it will sell well enough. This can quickly lead to the standardisation of the content and stifling of new and thus considered risky ideas.

By opting to digitally distribute an artist can get his or her work into the public sphere of interest easily and potentially with minimum business overheads. This often leads to both cheaper goods for the consumer and increased profits for the artists, as well as increased artistic freedom.

Digital distribution also opens the door to new business models. For instance, an artist could release one track from an album or one chapter from a book at a time instead of waiting for them all to be completed. This either gives them a cash boost to help continue or warns that their work is not financially viable before they have sunk excessive money and time into it. Videogames have increased flexibility in this area, as is demonstrated by micropayment models such as the one in Gunbound. A clear result of these new models is their accessibility to smaller artists or artist teams who do not have the time, funds or expertise to make a new product in one go.

Flaws

Loss of publisher support

There are drawbacks of an independent approach, not least the loss of publisher funding. This can be solved in one of two ways:

Hybrid deals where content is digitally distributed while also receiving publisher support. This usually means compromise: the publisher might get a cut of online sales, or demand that online prices are the same or even higher than retail prices. This is rarely desirable for those interested in digital distribution.
Utilising the new business models that online distribution allows, as described above.

The loss of advertising is another issue that stems from the dropping of publishers, and one that does not yet have a genuine solution. Videogame theorists have come closest by suggesting a model where trial versions are free and ‘unlock’ for a price once the hook has been made – the game effectively advertising itself. However, this still does not solve the issue of attracting consumers in the first place!

The upside for indie artists is however huge. For the first time they can access the same distribution chain as major record labels and there are none of the restrictive practices or inflated manufacturing costs (there are no manufacturing costs at all). Companies such as CDBaby.com and Antenna-usa.com both offer distribution to unsigned or indie artists directly to iTunes. The latter also offers a suite of marketing and promotion services offering a truly viable alternative to the traditional music industry.

DRM

Main article: Digital Rights Management

Digital work is easy to duplicate without any loss of quality and with the direct nature and lower prices of online distribution, piracy has a far greater impact than it does for traditional media. Digital Rights Management is the current solution to this flaw. It allows distributors to ‘protect’ their content from unauthorised redistribution. When someone tries to duplicate their purchase for another they will, depending on the DRM solution used, either be unable to, find that the product reverts to a ‘trial mode’, or risk the other user hijacking their product entirely for themselves. DRM is only one form of copy protection: it is defined by being dependent on a networked service rather than, for instance, a CD-ROM validator.

Although it is effective at preventing casual piracy, few if any DRM solutions have prevented all unauthorised copying either because they are broken into by crackers or because the media allows them to be circumvented, for instance by re-recording audio to another computer. This makes its use in traditional media on store shelves resented even further by the consumer. Perhaps due to this there recently has been a gradual shift away from using DRM to punishing thieves towards rewarding customers, with digital distribution’s new business models playing a part.

Proof of Purchase

Proof of Purchase laws were not created with ephemeral products in mind. This has led to many difficult legal problems for digital distributors, relating to refunds and returns, sales themselves, and the transfer of product ownership.

Examples

Music: iTunes

Main article: ITunes Music Store The most widely-known example of digital music distribution is the wildly successful Apple ITunes Music Store, which has arguably cemented itself in popular culture. Users can download albums for $9.99 (large albums may go up to $15) or individual tracks for 99 cents. iTunes accepts deals from independent artists as well as major record labels.

iTunes uses an activation DRM model where any number of computer can be activated any number of times, but only five computers can be authorised simultaneously. Music can also be moved to an iPod: an iPod can be linked to only one account, but one account can be linked to multiple iPods. Artists without a Record Label can work with distributors such as Mud Hut http://www.myspace.com/digitaldistribution to have their music available through stores such as iTunes.

Video games: Steam

Main article: Steam (content delivery) Valve Software's Steam service became one of the best-known digital distribution outlets for video games following the release of Half-Life 2, which required access to the service in order to run. Users are able to purchase and download game "packages" consisting of up to fourteen titles. Initially, profits from sales through the service were divided between Valve and their usual publisher, Vivendi Universal, although this ceased to be the case as of September 1, 2005, when the contract between the companies expired. Other games developers are able to use Steam to distribute their products.

As Steam is used mainly to distribute multiplayer games, it uses a connection-centric DRM model, whereby games can be downloaded multiple times, and to multiple computers. A separate account is required for each simultaneous connection to a game server. Sharing of accounts is discouraged; full access to the account is required for play. Valve retain the right to disable accounts violating their policies for access, and have done so in the past.

Films: Cinemanow and World Cinema Online

Main article: Video on demand Cinemanow uses Microsoft’s Windows Media Video format to digitally distribute films. It uses permanent purchase ($9.99), rental ($2.99) and subscription ($9.95 or $29.95) models. Cinemanow uses an activation DRM model. When you download a movie its license is added to your computer’s repository, one of only three chances you get to do so without having to e-mail and request more. If you want to view your content on another computer, or format your existing one, you must use up another license download.

World Cinema Online (^*) also uses Microsoft's Windows Media Video format to encode, encrypt and digitally distribute films. Their offering is aimed at the Independent Film Enthusiast & uses rental and ownership models as does CinemaNow. Given less constraints by studios, a lot more flexibility is offered in their DRM - allowing users more "Fair-use", and to watch films on their Laptop, round a friend's house, as well as their original desktop PC. Security is still a priority to protect filmmakers, and each time a film is activated on a new PC - the user must enter a username and password. When all the licenses expire - the customer has to request more.

Books: Adobe eBooks

The official Adobe eBook store was shut down on June the 3rd 2005, having fulfilled its goal of catalysing other eBook stores. This has left eBooks with no centralised location. They are sold at many websites, including:

eBooks use an activation DRM model, where a one-time operation allows the user to view all of their eBooks on up to six computers at a time. Depending on the author’s wishes, an eBook may restrict printing, copying, even in some cases the Adobe Acrobat reader’s narration feature. eBooks can be created and sold by anyone.

Computer and video game development | Digital rights management | Electronic commerce

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