With the friendly assistance of:With the friendly assistance of:4FriendsOnly.com AG (4FO AG) 4FriendsOnly.com AG (4FO AG)

and Fraunhofer IIS AEMTand Fraunhofer IIS AEMT

Potato System and Signed Media Format - an Alternative Approach to Online Music Business

Potato System and Signed Media Format - an Alternative Approach to Online Music Business

Wedelmusic 2003 Wedelmusic 2003 Leeds, UK, 15th – 17th September 2003 Leeds, UK, 15th – 17th September 2003

Juergen.Nuetzel@TU-ILMENAU.deJuergen.Nuetzel@TU-ILMENAU.deRuediger.Grimm@TU-ILMENAU.deRuediger.Grimm@TU-ILMENAU.de

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 2

At a Glance ...At a Glance ...At a Glance ...At a Glance ...

Music a Virtual Goods – a ChallengeMusic a Virtual Goods – a Challenge

Potato System - an Alternative ApproachPotato System - an Alternative Approach

Paid Downloads Paid Downloads

Different Payment MethodsDifferent Payment Methods

P2P and Potato System P2P and Potato System

LWDRMLWDRM®® - Light Weighted DRM - Light Weighted DRM

Signed Media Format and Potato SystemSigned Media Format and Potato System

Summary Summary

Virtual Goods Workshop 2004Virtual Goods Workshop 2004

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 3

Music a Virtual GoodMusic a Virtual GoodMusic a Virtual GoodMusic a Virtual Good

Fred transfers his song(mysong.mp3) to Ginny

Ginnyconsumer

Freda music provider

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

mysong.mp3

mysong.mp3

Is this the only way?

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 4

The ChallengeThe ChallengeThe ChallengeThe Challenge

Digital music maybe copied and transferred

frequently without loss and with

minimal effort

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

GinnyConsumer

Ginny passes Freds song(mysong.mp3) on to Harry

Harry afriend of Ginny

mysong.mp3mysong.mp3

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 5

The Potato SystemThe Potato SystemThe Potato SystemThe 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 that’s the way it works…

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 6

Paid DownloadsPaid DownloadsPaid DownloadsPaid Downloads

PotatoSystem.com

Web-Service…

mysong.mp3

1 Fred publishes a sell-link with TAN=31881

Jacket transfers transaction information:old TAN 31881 and Ginny’s login3

Web-Service answers with a new TAN=37121 4

Jacket deliversthe file to Ginny.

It adds thenew TAN to the

file name.

mysong4fo37121.mp3

56Ginny clicks the lin

k with TAN=31881

and pays 1.10 Euro for the song

2

6

Ginnywants to hear Fred‘s music

Fredmusic provider

Now, Ginny can earn money with Fred’s song.

Jacket for PotatoSystem.com

Web-Site…

…with payment …with provider and user accounts

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 7

Different Methods to payDifferent Methods to payDifferent Methods to payDifferent Methods to pay

How to pay

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 8

After the PaymentAfter the PaymentAfter the PaymentAfter the Payment

Ginny is now a registered reGinny is now a registered re--distributor:distributor: She can publish here own sell-link:

http://www...com/process?action=sell&tan=37121 If her friend Harry visits this link and buys Fred’s

song, Ginny receives a commission (e.g. 30%) Harry publishes also his own sell-link. If a user buys Fred’s song via Harry’s 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.

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 9

In P2P - Harry is free to payIn P2P - Harry is free to payIn P2P - Harry is free to payIn P2P - Harry is free to payGinny

offers Fred‘s music 1mysong4fo37121.mp3

Ginny’s P2P client transfers the song to Harry’s P2P client

Harry likes Fred’s musicalso

PotatoSystem.com

Web-Service

Jacket transfers TAN=37121and Harry’s login3

answers with new TAN=39521 and Ginny’s commission 46

Harry clicks the link with TAN=37121 in the

P2P-Client and pays 1.10 Euro for the song

2Fred

music provider

6

mysong4fo37121.mp3

6 4

new TAN=39521 5

mysong4fo39521.mp3

…with payment

Jacket for PotatoSystem.com

Web-Site…

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 10

Community and MatchingCommunity and MatchingCommunity and MatchingCommunity and Matching

Ginny wants to contact people who like the Ginny wants to contact people who like the same musicsame music

Who likes the music I bought from Fred? Who offers music to

me I like?

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.

PotatoSystem.com

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.

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 11

P2P for Potato System UserP2P for Potato System UserP2P for Potato System UserP2P for Potato System User

P2P Messenger based on JXTA.orgP2P Messenger based on JXTA.org

Signed Java

Applet

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 12

LWDRMLWDRM®®LWDRMLWDRM®®

Light Weight Digital Rights ManagementLight Weight Digital Rights Management Basic idea: “Basic idea: “Keep honest people honestKeep honest people honest”” Copying is allowed if the user signs the fileCopying is allowed if the user signs the file It prevents large scale copy law violation It prevents large scale copy law violation From the inventors of MP3: Fraunhofer IISFrom the inventors of MP3: Fraunhofer IIS www.LWDRM.comwww.LWDRM.com Uses the signed media format …Uses the signed media format …

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 13

Signed Media Format (SMF)Signed Media Format (SMF)Signed Media Format (SMF)Signed Media Format (SMF)

File format based on MPEG-4:File format based on MPEG-4: Data format compliant to: ISO Media File FormatData format compliant to: ISO Media File Format Coding: MPEG-4Coding: MPEG-4 Can be played everywhereCan be played everywhere Encrypted using the private key of the userEncrypted using the private key of the user Contains certificate of the user including public keyContains certificate of the user including public key Private key and certificate are provided by some Private key and certificate are provided by some

certification authoritycertification authority Server signed license includes additional Server signed license includes additional

information (e.g. price, last buyer, commission …)information (e.g. price, last buyer, commission …)

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 14

SMF and Potato SystemSMF and Potato SystemSMF and Potato SystemSMF and Potato System

“Ginny is the owner and re-distributor of Fred’s song, if you pay 1.10 Euro you

become the owner and re-distributor.

GinnyConsumer

Ginny passes signed song of Fred on to Harry

Harry afriend of Ginny

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 …

mysong.smfmysong.smf

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 15

SummarySummary SummarySummary

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

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 16

AnnouncementAnnouncementAnnouncementAnnouncement

2nd International WorkshopMay 27 - 29 2004 in Ilmenau, Germany

Call for Papers: VirtualGoods.TU-ILMENAU.de

2003/09/15 Wedelmusic 2003, Leeds, UK, Juergen.Nuetzel@tu-ilmenau.de 17

Thank youThank youThank youThank you

Potato System (www.potatosystem.com) is a joint work between 4FriendsOnly.com AG and Fraunhofer IIS AEMT (both Ilmenau)

4FriendsOnly.com Internet Technologies AG AEMT ILMENAU