When Content Moves Faster Than The Money: Paul Sweeting Talks Rights Technology

If you think attribution when the term “Rights” comes up in the context of digital media, then you’re missing an important piece of the puzzle as far as how tech breakthroughs have impacted content distribution. On July 26, Digital Media Wire (DMW) will present a Rightstech Summit in NYC to address this blind spot. For now, let’s chat with panel participant Paul Sweeting, Principal of Concurrent Media Strategies, LLC, to get a download on the subject.

What the Heck is a Merkle Tree?

First a cheat-sheet for some of the terms used below. In 20 seconds, you’ll have a working knowledge of Bitcoin, blockchains, Merkle trees, nodes, hashing, and The DAO. (These terms are spitballed here, to bring you up to speed quickly use links above.) Alternative currency Bitcoin is mined with what can be considered a long chain of digital handshakes that verify and validate the “blocks.” There is a currency exchange to “fiat currencies” worldwide. Fiat Currency is government-backed, think Euro, Dollar, Pound. The twist with digital currencies is to create a stable monetary standard that is not finite, like gold-backed currency was — ironically Bitcoin has a finite number attached to it (think of it the same way you would IPO stock, limited shares hold value in place). Expansion of Bitcoin is in process, which is why there are many unanalyzed long-term facets to this digital currency concept.

Paul Sweeting on Why Rightstech is Key

Meanwhile, forget all that, just think “Smart Contracts” and listen to Paul Sweeting discuss the au courant ideas to be unveiled at DMW’s July 26 summit that have real world applications.

Q: Most people think “right” refers to copyright protection in terms of usage, how is the Rightstech Summit offering something different? Well, our sort of starting premise is that much of the media value chain, meaning the way media value content is created and consumed, has been changed by digital platforms, digital technology. That is not news, but there’s the business-to-business piece in the middle. That is, the concept of who owns the rights has not undergone the same sort of transformation.

Q: You mean monetization? Yes, fundamentally yes — that middle piece of the pipeline is still operating under the old analog models. The result, is the content moves much faster than the money. That causes a lot of stress for the industry — people who are supposed to be getting paid are not getting paid when you map out the stakeholders.

Q: Stakeholders you define as… Content creators, artists, musicians, filmmakers, and you have the publishers of that content — whether they are book publishers, studios, record companies whomever — then you have the distributors and exhibitors of that content at the other end. But there’s that piece in the middle where the value of the content is supposed to be translated into (profit).

Q: Nobody really pays for music anymore, for one thing, right? If you are listening to Pandora for free, Pandora is paying. They are conducting business and selling advertisers.

Q: The MPAA (Motion Picture Association of America) is always upset about piracy, so what can the movie studios do? The focus of what we are doing is not so much on piracy — this is traditional digital rights copy protection. What we are talking about is, if you have a catalog of movies and some event happens in the world, a famous actor dies, and suddenly there is a demand for clips from that actor’s career, somebody owns those clips and uses of those clips. Usage of those movies have contractual obligations, all sorts of permissions are supposed to happen. If this can not happen at the same speed as things explode across Facebook, that’s an issue. We’re trying to move this mushy process at the same speed as viral media.

Q: Where is the technology for this coming from now? A lot of this is coming out of the start-up world. There is quite a lot of interest in technology such as blockchains. People are working on side-chains which operate at bigger scales and more quickly than the Bitcoin blockchain, but then can be reconciled with the Bitcoin blockchain — dedicated blockchains for a specific industry.

Q: Can you give an example? Ethereum sits atop the black chain, a second-generation block chain. The Bitcoin chain is fairly limited in its applications; it was designed for a specific purpose which was Bitcoin. Ethereum is almost an operating system layer than can sit atop a blockchain layer and allows people to write all kinds of block-chain applications.

One of their big areas of focus are smart contracts, which are a way of embedding business rules in with a piece of content; it becomes a self-executing contract. All the terms of who is supposed to get paid is baked in — whatever the business model is. All of the business stuff that is supposed to happen behind it happens without human intercession. Block chain payments can be automatically paid to the appropriate rights owners.

Q: Bitcoin has fluctuated so wildly, lost so much value, how does that figure into this? One of the things it can do is shield people from currency values and fluctuations. There is a view out there that Bitcoin could become the sort of universal medium of exchange for business conducted on a block chain.

It’s still trading at about $600 USD, but not all of this needs to involve crypto-currencies. You can build apps for a block chain that deal in tokens, which sort of take the place of Bitcoin on a block chain.

Q: Like casino chips? Sort of like that.

Q: How did the Rightstech Summit come about? This is the first rights tech we’ve held, I mean people have held other ones, held conferences and focused on specific industries. Like in the music industry, around blockchains, or different segments of the media industry, such as book publishers, film and video. Because all of those industries are struggling with the same fundamental problems that the content can move much faster than the money. They’re all looking to the same technologies to solve that problem. Our goal is to get some dialogue going across different silos.

Q: Meaning what? There is a whole layer of companies that are enterprise-scale rights management platforms. There are a number of companies — for example Fadel in New York, they have built an enterprise scale rights (system). FilmTrack is widely used in Hollywood. The music industry has developed Music Reports, also Pluravida, for the music industry. They do rights management for record labels, basically.

Q: Who attends, and what happens at Rightstech? Our ideal scenario is that people who are working on rights management for photographers, for instance, will learn something that might be useful for them from learning how similarly situated companies are working to solve rights management in the music business, or the online video business. There are certain elements of this that are generic; I mean ‘a contract is a contract is a contract.’ If you are thinking about smart contracts, how do contractual (agreements work).

Q: Is Ethereum open source? Ethereum is an open sourced project. A lot of the block chain (development is being done). The Linux Foundation is actually overseeing a project called HyperLedger which is hoping to create inter-operable standards around block chain. They are not focused exclusively on the media business — a lot of it is focused on the financial industry — where fintech meets copyright.

Q: How did you get into this aspect of the business and what’s your connection to Ned Sherman who runs Digital Media Wire? Concurrent Media Strategies is my own consultancy and newsletter and blog. My background is in journalism. I wrote forBillboard and Variety. I came up with this concept of rights tech, and I needed a partner on it. I’ve known Ned for years. We kind of said ‘we should really do something together one day.’ We would have the same conversation every year. He liked it right away.

Q: To recap, when is it, and how long is it? It’s July 26, a one-day summit. We didn’t want to do a long conference. We’ve been surprised how much interest and support there is. There’s a lot of technology being brought to bear on this problem —  (similar to) what’s happened to intermedia and tech since the BetaMax case. You need some factors aligned when you are talking about technology to better manage rights. More to the point, the creators of the content and the rights owners are on the same side as the guys coding things. That has not often been the case. Since the time of Napster they have been at odds with each other.

Q: That almost never happens, thanks Paul.

by Quendrith Johnson, Los Angeles Correspondent

This article also appears on Screenmancer.