A World of Change for Content Distribution
New channels for distributing content are opening up great business opportunities.
- By Srikanth Desikan
- March 01, 2006
Hear that approaching rumble? It’s the sound of a major shift in
online digital content distribution. In fact, the landscape is changing
before our eyes.
It’s a transformation that every company with digital products
or content should watch closely. In this new world, all kinds of
applications, content, services and experiences will be delivered
online faster and cheaper than ever before. That evolution -- or
revolution -- is already causing waves, with no less than Microsoft
Chairman Bill Gates predicting "very disruptive" times
ahead. [See the cover story, "Get
Ready for Software as a Service" -- Ed.]
This transformation is also generating new business opportunities.
Among the most promising: new, cost-effective online channels giving
providers a simple, direct way to offer a wide range of digital
These new direct-to-consumer channels, already becoming available,
offer huge advantages over traditional server-based content delivery.
For content providers, they can cut distribution costs by 80 percent
or more, reduce the need to alter digital goods for online delivery,
enable flexible licensing terms and enhance cross-promotional capability.
For consumers, the new channels offer an improved content-delivery
experience. They can find, select and buy exactly the content they
want and have it securely delivered to their desktops or devices -- often
in a fraction of the time required for traditional server-based
downloads and installations.
about new licensing options that high distribution costs
or bandwidth limitations have prevented you from offering
The new channels provide the distribution power of peer-to-peer
(P2P) networks backed with substantial security controls. These
new private P2P networks are far more secure than existing public
P2P networks. Because of their open nature, the public P2P networks
offer inadequate protection for the assets being distributed on
them, leaving their contents vulnerable to theft or tampering. But
with private P2P networks, companies can control their content even
after it’s been released to the network, updating, upgrading and
patching it automatically as needed.
And because the technology creates a secure one-to-one channel
between provider and consumer, those changes will automatically
be delivered to everyone who’s received that content. If necessary,
providers can even roll back to an earlier, more stable version
of a particular piece of content -- or recall it entirely.
Following are a few suggestions on how content providers can prepare
for this transformative tidal wave:
- Evaluate options. Look beyond traditional
distribution channels. Consider ways in which you might use these
new direct-to-consumer channels to make your products more visible
and easier to find.
- Take inventory. Remember that with the
dramatically lower distribution costs, you may be able to profitably
break larger products into smaller chunks, such as selling monthly
installments to new game modules for $2.99 rather than selling
a new game every year for $19.
- Compare costs. Determine your current
content distribution expenses. Estimate the likely savings or
new revenues that these new private P2P channels might offer.
Use those calculations to prioritize what should "go digital"
- Create new licensing models. Think about
options that high distribution costs or bandwidth limitations
have prevented you from offering before. For example, you may
find it profitable to offer software "rentals" for just a few
days because the new channels can deliver even very large applications
quickly and inexpensively.
- Explore brand-building opportunities.
Some direct-to-consumer channels can be customized with your brand’s
specific look and feel. And some offer the ability to deliver
in-context ads -- that is, ads directly related to the content, game
or software that a particular consumer is using.
Bottom line: If you are, or plan to be, in the business of
delivering content and products online, now’s the time to learn
how these new direct-to-consumer channels can help your business.
Look for ways to monetize existing content while seizing opportunities
for new development. Taking these steps will help ensure that your
company rides that fast-approaching wave of change rather than being
swept away by it.
Srikanth Desikan is vice president of product marketing for NeoEdge
Networks Inc. of Palo Alto, Calif. (www.neoedgenetworks.com),
a Microsoft Gold Certified Partner specializing in on-demand digital
goods delivery and management. NeoEdge is beta testing a digital content
channel management service designed for game, video and software producers