... a Challenge. Potato System - an Alternative Approach

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Potato System and Signed Media Format - an
Alternative Approach to Online Music Business
Wedelmusic 2003 Leeds, UK, 15th 17th September
2003 Juergen.Nuetzel_at_TU-ILMENAU.de Ruediger.Grimm
_at_TU-ILMENAU.de
With the friendly assistance of 4FriendsOnly.com
AG (4FO AG) and Fraunhofer IIS AEMT
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At a Glance ...

• Music a Virtual Goods a Challenge
• Potato System - an Alternative Approach
• Paid Downloads
• Different Payment Methods
• P2P and Potato System
• LWDRM - Light Weighted DRM
• Signed Media Format and Potato System
• Summary
• Virtual Goods Workshop 2004

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Music a Virtual Good

• Virtual goods
• can be digitized
• are not bound to any physical media
• are normally stored as files on computers
• can be transferred via networks (e.g. Internet)
  
• can be copied with almost no costs
• need alternative business models

Is this the only way?
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The Challenge
Digital music maybe copied and transferred
frequently without loss and with minimal effort
And even by the consumer!
This is not a problem It is a challenge
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The Potato System

• ... brings users and providers back together
• The user is motivated to pay for a new song,
  because he receives the re-distribution right for
  the song (TAN). He can earn money with the song.
• In the Potato System the paying user is an active
  part of the distribution network for new and
  unknown music.
• The Potato System is a fair music distribution
  system. It works without copy protection and
  without DRM.
• The Potato System provides additional services
  for the users e.g. user-matching, fan info,
  access to a special P2P system

And thats the way it works
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Paid Downloads
Fred music provider
Now, Ginny can earn money with Freds song.
Jacket delivers the file to Ginny. It adds
the new TAN to the file name.
with provider and user accounts
Web-Service answers with a new TAN37121
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Different Methods to pay
How to pay
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After the Payment

• Ginny is now a registered re-distributor
• She can publish here own sell-linkhttp//www...c
  om/process?actionselltan37121
• If her friend Harry visits this link and buys
  Freds song, Ginny receives a commission (e.g.
  30)
• Harry publishes also his own sell-link.
• If a user buys Freds song via Harrys link,
  Ginny (10) and Harry (30) receive commission.
• Or, Ginny transfers via P2P the song with her TAN
  in the file name (mysong4fo37121.mp3) to Harry.
• In the P2P system Harry is free to pay.

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In P2P - Harry is free to pay
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Community and Matching

• Ginny wants to contact people who like the same
  music

For every song Ginny has paid for, the Potato
System lists those users who have other matching
songs. Potato System also lists those users who
are interested in getting this song.
Who likes the music I bought from Fred? Who
offers music to me I like?
Ginny, these users have bought music you are
interested in Draco, Julia and Mario. Contact
them! They are on-line.
The community functionality matches users who
like the same music.
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P2P for Potato System User

• P2P Messenger based on JXTA.org

Signed Java Applet
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LWDRM

• Light Weight Digital Rights Management
• Basic idea Keep honest people honest
• Copying is allowed if the user signs the file
• It prevents large scale copy law violation
• From the inventors of MP3 Fraunhofer IIS
• www.LWDRM.com
• Uses the signed media format

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Signed Media Format (SMF)

• File format based on MPEG-4
• Data format compliant to ISO Media File Format
• Coding MPEG-4
• Can be played everywhere
• Encrypted using the private key of the user
• Contains certificate of the user including public
  key
• Private key and certificate are provided by some
  certification authority
• Server signed license includes additional
  information (e.g. price, last buyer, commission
  )

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SMF and Potato System

• Advantages of SMF in Potato System
• Every SMF compatible player displays Potato
  System specific license information price, last
  buyer, sell-link
• This information is offline available
• SMF Player remembers Harry to pay for the song

Ginny is the owner and re-distributor of Freds
song, if you pay 1.10 Euro you become the owner
and re-distributor.
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Summary

• Advantages for users and producers/artists
• Music producers support their customers to
  re-distribute their products. They pay for any
  re-distributed song a percentage on commission.
  This allows rapid distribution even of unknown
  content.
• Users have the possibility to receive a free copy
  from other P2P users. If they pay, they get
  access to users matching this song.
• It starts with underground rock music from Berlin
• Signed Media would bring more comfort to the
  users

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Announcement
Call for Papers VirtualGoods.TU-ILMENAU.de
2nd International Workshop May 27 - 29 2004 in
Ilmenau, Germany
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Thank you
Potato System (www.potatosystem.com) is a joint
work between 4FriendsOnly.com AG and Fraunhofer
IIS AEMT (both Ilmenau)