NEWS ANALYSIS: ITEM

			Objects of Desire: Finding the Right Content Platform Strategy Amidst Changing Technologies
			John Blossom
			7 December 2005
SUMMARY:			With patent spats in U.S. and Canadian courts threatening to unplug Blackberry users from content on their objects of desire it's a good time to consider how wise it is to be chasing one hot content platform after another with content licensing deals in hopes that publishers can keep in touch with their users. The ideal digital content platform for publishers is not the latest faddish gizmo but the digital objects that they create to run on these hardware platforms. Keeping content highly profitable in the midst of disposable technology wars means thinking long and hard about how you're really going to make money in the long run on from content users  using these devices.

Research in Motion's Blackberry is worshiped far and wide by executives on the go who can't get enough of communicating electronically.  The Blackberry's wireless access to emails, databases, instant messaging, phone and Web content services have made it a fetish so alluring that it's amazing that pre-nuptial agreements aren't required when they're purchased. So imagine the frenzy triggered by news of a recent court ruling on a festering patent suit against RIM that could bring Blackberry services to a crashing halt at any time. Imagine not only the glazed eyes of mobile keyboard thumbers cut off from their instant fixes of content and communications but imagine as well the sweaty palms of business development managers queuing up content licensing agreements for a popular platform that could disappear overnight.

As frightening a scenario as this may be it's but one example of why the search to define new "choke points" for content licensing in a highly volatile technology market is likely to become far more frustrating. Mobile and satellite platforms have been popular targets for content licensors to gain some elbow room for long-established channel licensing models that leverage exclusionary media to create artificial scarceness. But as seen in the subscription database and cable television industries, there is only so much semi-desirable content that subscribers are willing to pay for. And when users change on a whim to the latest technology toys, what then? An endless stream of licensing deals and remarketing to migrating clients is going to keep content producers quite busy just trying to stand still as content flows to where its users value it the most. Add in the growing preference of content users to download digital content to their local devices and the picture becomes quite complex for seekers of choke holds.

Finding the right strategy for dealing with a plethora of platforms for consuming today's content is no easy task. But content producers can make it a lot easier on themselves if they look a little past the familiar terrain of past licensing deals and think about how the users of content are really going to value their services in a world where content needs to be on ever-changing platforms to provide that value. Here are a few tips as to how to think about platform strategies for content licensing in an age of short-lived content appliances:

• Be careful what you ask for in a platform partner: you just might get it. Apple's iPod has an attractive form factor and proprietary rights management packaging for content that make it hard to walk away from this platform. But premium content suppliers who didn't bet on the dominance of iPods now find themselves in the unenviable position of Apple having huge control over pricing and distribution as they introduce their proprietary file formats to new platforms. In time iPods, Blackberries, TiVos and others will be on the dust heap of trendy technologies, along with their content licensing deals. What will remain is the Web, the amorphous catch-all of content that is always ready to provide acceptable substitutes to proprietary channels. The Web enables both iPods, Sony and MP3 devices to download content with equal ease. With a ubiquitous distribution medium, why try to chase fake exclusivity through platform choke points that will never catch up with your need to grow revenues across the broadest array of audiences? Most traditional licensing deals will begin to feel more like a noose to content suppliers trying to keep up with the "gizmo du jour." 
• Bring the lessons of building Web revenues on to personal content devices.  The Web untethered many publishers from subscription database services that sprung up in the days when collecting and distributing content was expensive work. Free to build their own relationships with content consumers via Web content services we see magazines, journals and news sources using affordable Web technologies and services to build higher-margin revenues away from "choke point" content licensing. Why should publishers accept anything less than ideal conditions in which to sustain those relationships via personal content devices? Content suppliers need to look beyond the short-term comforts of artificial scarcity offered on trendy personal content devices and recognize that the same advantages of openness that are now working for them on the Web are going to follow an inexorable path onto other devices. Traditional content licensing deals can help to lock in market position on new platforms, but when the platforms themselves are going to have very short shelf lives it becomes far more important to develop a direct licensing relationship with your content users.
• Think of digital objects as the ideal personal content devices. Instead of chasing disposable content devices that dispose of the user relationships at the heart of revenue growth in today's electronic publishing it's important to recognize that the real platform that publishers want to support at all costs is their own digital content. XML and other standards allow for both content and functionality to be packaged together into downloadable digital objects that can act as virtual machines in their own right. The more portable those virtual machines the easier those relationships will remain intact as digital objects move from machine to machine over time. The International Digital Publishing Forum is working on new standards for digital containers that promise to move beyond eBook packaging into a more generalized container for licensable digital content. As the ability for publishers to add value to such containers increases the focus of content licensing for downloadable content is more likely to move in the direction of downloadable digital objects that have long lives in the hands of their purchasers.

Getting content on the hottest personal devices will remain a high priority for publishers for years to come. But being able to avoid lengthy licensing battles to get in touch with content users on those devices will be the real struggle for publishers to fight. The more that publishers embrace and help to form platform-independent standards for content packaging and license management for digital objects the sooner that they will be able to build the strongest revenue base possible on personal content devices. Now that's a passion that we can all live with.

- John Blossom

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