Digital Amway

A few years ago, I was accused of using the word “interesting” in subtle ways.  Sometimes it means a truly novel idea that I would like to learn more about, other times, it’s a novel idea of which I’m more than a little skeptical.  In both cases, I stand by the description, to me, both are interesting – but it can make it a little hard to know what I’m really thinking.  So take it with a grain of salt that I just read an interesting article in the February 2008 issue of IEEE Computer on how to turn music lovers (particularly teenagers) into music distributors.

The idea assumed a secure hardware architecture using digital certificates (for an idea of how this might work, read the novel “Rainbows End” by Vernor Vinge). Customers would buy music directly from the industry and would have the option of buying redistribution rights (at say a 10% discount).  The authors imagined that in addition to buying the song for personal use, customers could buy a 10 pack of redistribution licenses for maybe $8.99.  This 10 pack could be resold either as an end user license or a redistribution license so that the customer’s customer could resell it too.  Unsold licenses could be returned to the industry distributor for credit.

Having dealt with Microsoft Windows Server licensing at the office, I’m a little skeptical that any end user would want to get involved in such a scheme.  But then again, the office is paying MS, so what do I know.  The biggest problem that I see with the redistribution scheme is that customers have to pre-purchase redistribution licenses without knowing whether or not they could be resold.  Here’s my suggestion (perhaps I should get it published in IEEE Computer 🙂 ), the redistribution should be in an Amway style.  For example, person A purchases the song for full price (say $0.99).  Person A can give a copy of the song to a friend, Person B, who can play the song for only a limited number of times.  If they want to keep it, B does not go and buy it from the original retailer, they activate it instead.  They pay the retailer the full amount ($0.99), but person A receives 10% maybe in credit, maybe in an account that pays out on occasion.  If Person B distributes to Person C, then both A and B get paid (A gets less than B being one removed).

The industry would go along with this due to the significantly reduced bandwidth costs for distribution.  Users (might) go along with it because it’s a more natural distribution method and there’s a direct payment with low effort ovehead.

Don’t get me wrong, I’m not advocating this, I’m not a huge Digital Rights Management (DRM) fan – too much potential to restrict fair use; however, it does seem like a more natural approach to turning consumers into distributors.

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One Response to “Digital Amway”

  1. Kenneth LAwson Says:

    I read your article with interest. You have a interesting concept for distributing and paying for music. I too am concerned with DRM,however, my focus is more on the consumers lose of personal rights in terms of what they can do with media once they get it. The concept of”fair Use” means I can make backup copies of my media for my personal use and archiving. This goes all the way back to the early days of the vcr when the courts decided that taping a show of air didn’t infringe on copywrites. To me that extends to cd, dvd, HD DVD, and any media that comes into my house be it sat receiver, cable IPTV, I think you would find my articles in my blog interesting ,Theres A “Open Letter to the RIAA” that should interest you along with the two most recent posts. The letter is in the Archives from last year.