FROM 1999: JENKINS-DENSMORE EXCHANGE

---------- Forwarded message ----------

Date: Wed, 26 May 1999 10:46:53 EDT

From: Henry Jenkins <henry3@MIT.EDU>

To: Bill Densmore <densmore@rmc1.crocker.com>

Subject: Re: IIPC: Preserving Information Democracy; the media role

Bill:

Thanks for sharing this. I enjoyed our conversation yesterday. It is clear we are thinking along somewhat similar lines. I am sketching this in swiftly so I hope it is clear. In any case, we can discuss it more fully.

My own research has centrally concerned the ways that popular audiences consume and create value from the resources provided them by the mass media.

As I suggested yesterday, I don't find the lowest common denominator model helpful for thinking about the success of most popular entertainment. Rather, I see the popular audience composed of a coalition of different audience interests who may share certain programs, films, stories in common but who get fundamentally different things from them and who interact with them in different ways.

The most creative producers understand this now, while the broadcasting paradigm helps to mask the degree of diversity and fragmentation of the contemporary media audience. It is clearer when we go on line and survey the range of web sites constructed around a particular series or parse through the flame wars on fan discussion lists which occur when radically different reading publics are brought together.

A second focus of my research concerns what I call "cultural convergence," which refers to the social and cultural changes in how we relate to media content in our everyday life that help prepare the way and establish the marketviability of technological convergence.

When we try to understand what is happening in our culture, we see two things: A growing desire to participate more fully in our media culture -- not just as passive consumers but active transformers of media content -- and a growing tendency to tighten corporate control over intellectual property law. This is resulting in a crackdown on fan web sites, MP3 files, etc. and thus a closing off of the cultural participation encouraged by the web.

Now, here's what I imagine occurring when we add something like your Clickshare to the mix -- along with dramatic improvements in the delivery technology for digital media:

1) All television content becomes available via some form of webtv, including past episodes. If I want to join a series midprogress, I can go back and watch earlier episodes for a reasonable rate with micropayments as the means of exchange between me and the television producers.

2) Television series will be annotated to link back to relevant back story information. If I am watching X FILES and there is reference made to Muldar's sister and her disappearance, I can be offered the chance to see those earlier scenes, again at a modest price. This will enable even more elaborate form of serialization and backstories in American television, a tendency that has grown in the two decades since the introduction of the VCR.

3) Fan websites will play an important role in the cultural economy, if they are allowed to function not unlike the Amazon Associates program. Fan sites will comment on or annotate the aired episodes, thus establishing reasons why various kinds of viewers might want to see them for the first time or watch them again. They can link back to the producer's sites where the episodes can be downloaded for a viewing fee and the producers will in turn provide an incentive to the fans for creating sites which essentially help market their products. At the same time, fans should be allowed freedom to discuss, comment, and appropriate the material in any way they want since doing so helps to establish niche market value for the content.

4) Certain series may debut on network and then move rather rapidly to the web where their continued support will come from viewers paying to watch them. This will be attractive in cases -- such as MY SO-CALLED LIFE -- where a series attracts an intense following in a definable demographic group but does not register a broad-enough viewership to be powerful according to the Nelson Ratings measurement. The ability to collect payments on a per view basis for a broad audience will enable continued production of such series assuming price scale can be resolved.

5) New networks may emerge which reflect under-served segments of the population that are geographically dispersed and therefore couldn't be addressed by existing broadcast and cable structures. Examples might include various language groups that constitute immigrant populations or the gay and lesbian community. Here, original programming is produced and made available for a modest pay-per-view fee.

6) International circulation of media product is facilitated. We can imagine viewer-supported networks emerging for British/Australian comedy or Japanese Anime for example, which will enable these products fair access to the American market. It will be possible to access television without regard to its original point of origin. Again, this depends on some structure that allows us to pay for what we watch at a modest enough scale to make this attractive to the average viewer on a regular basis.

The micropayment structure would seem to offer the best basis for this model, which leads us step by step towards a more diverse media culture that more fully reflects the range of viewer taste and interest. It will create new basis for profits for the entertainment industry while also enabling more popular access to media content. What is needed is a structure which can lower the per unit cost (and thus broaden the potential base of viewership), can be collected quickly and efficiently, and can be distributed to a range of different media producers as opposed to create narrow gateway companies that will once again determine what we can and cannot see based on broadcast models of the mass audience.

-- Henry

At 04:53 PM 5/25/99 -0400, Bill Densmore wrote:

IIPC.NET logo

IIPC:

Preserving Information Democracy;

The role of media and financial institutions

_________________________________________________________________

PRESERVING INFORMATION DEMOCRACY:
THE ROLE OF MEDIA AND FINANCIAL INSTITUTIONS;
THE NEED FOR COOPERATIVE ACTION
THE INTERNET INFORMATION PAYMENTS COLLABORATIVE (IIPC)

By Bill Densmore

[densmore@clickshare.com]

Q: What's the connection between IIPC and democracy?

As a small-town publisher, I became concerned during the 1980s that the era of "fat pipes" into the home would alter the traditional role of newspapers as the primary communicator of time-sensitive, general-interest information to the public. I could see that consumers would be able to -- and would want to -- seek and acquire information from many other sources. This would erode the financial base of newspapers (and broadcast media as well) and constrain their ability to serve as the voice and watchdog of an informed citizenry. In 1979, I wrote a brief piece to myself describing an aspect of this problem http://www.clickshare.com/vision.html.

While many newspapers have de facto local monopolies and that is "bad" (and will be eroded by the Internet), they also because of their position serve as one of the only common information bonds among an increasingly fractured, special-interest-centric citizenry. I was looking for a way to empower newspapers (or any new entrant wishing to perform this function) to be able to serve as a gateway ("portal" is now the popular term) to information resources anywhere, helping to collate and rationalize the delivery and presentation of those resources to users.

We created a concept called The Clickshare Service, which is embodied in prototype, patent-pending technology.. Now, we've committed Clickshare Service Corp. to help launch the Internet Information Payments Collaborative (IIPC.NET) .

The design objectives of what came to be called Clickshare were that we create a system which would allow publishers of any size and inclination to share their users and information with other publishers and audience owners of any other size or inclination, globally -- and profit from doing so. They should be able to offer users the simplicity of a "most-trusted" source for information validation and purchase, but not restrict the users' choice of information sources and points of view.

Q: Why do you worry that our information-based democracy is threatened?

The inclination of the large publishing enterprises which are emerging around the world (Bertelsmann, Fox/Murdoch, Disney/ABC, Time-Warner-CNN, Microsoft-NBC, AOL-Netscape, large newspaper chains) is to attempt to provide a total information "solution" for their customers so that the customer never leaves the comfy confines of their information space. While this is a laudable business objective, it leads ultimately to the same sort of concentration which is now occurring in the book-publishing industry, where soon a handful of editors and chain buyers in New York City may dominate for all practical purposes what books are written and sold in the mass market.

I take it as axiomatic that an information cartel would be antithetical to robust free expression. In addition, the "corporatization" of the editing process -- focused as it is on profit maximization rather than individual ideas and principles -- leads to the public losing respect for the freedoms granted by the First Amendment, because the public no longer sees the media living up to the responsibilities inherent in the exercise of those freedoms. Instead, it views the media as taking advantage of a special privilege for private financial gain.

Apart from a business mission of enabling information commerce, therefore, a more noble intent of the IIPC, therefore, is to create a common structure which encourages erstwhile information cartels to permit their users free access to information anywhere.

Q: But what induces media combines to participate?

For the same reason that Bell Atlantic as a business matter must allow its customers to make phone calls which connect seamlessly to Pacific Telesis. Quite simply, Bell Atlantic realizes that their network would be of little practical value if it were insular. The lingua franca of digital-information commerce must be open to all, broadly controlled, in order for there to be true free expression for voices of all sizes and shapes. A telephone company which doesn't connect calls outside its grid is quickly out of business. An audience-owner which refuses its users access to information it doesn't own and control will quickly find their users moving to a home base which takes advantage of the full information marketplace. Thus it becomes critical that there be an infrastructure which permits open access to information -- at least as a technical matter.

Q: So how do you put a universal information payment protocol into place?

This is the problem which has stumped us since 1984, when we began conceiving and then engineering Clickshare. There are some lessons from recent history.

Because the Bell System was a regulated monopoly, it was able to dictate technology and billing protocols for the nationwide phone system. When it was broken up, the emerging Baby Bells realized that they could prosper by preserving the elements of the system architecture which facilitated universal connectivity, competing on price and value-added service offerings.

Visa founder Dee W. Hocks and his colleagues in the early 1970s managed to achieve in Visa a similar result without the benefit of starting from a regulated monopoly. And Bill Gates' did it in the mid 1980s with a combination of IBM's unwitting assistance, superb marketing and, some might argue, business practices which might not have passed Sherman Anti-trust Act muster if anyone had been watching closely enough. But of course the result has been great for consumers at one level -- a "dial tone" platform for computers. There are important arguments about whether it is good public policy to allow this to continue -- but that's beyond the scope of this article.

Q: So how does this relate to the Internet and the IIPC?

The Internet wasn't conceived or engineered with any protocol for settling information transactions or handling incremental billing of digital objects or quality-of-service. It is expected to now perform in these areas. Yet for very important First Amendment reasons, most observers are loath to see the government play anything but an advisory role in this process. And yet publishers universally recognize that a payment protocol which affords one-ID, one-password, one-bill access to information needs to emerge which handles individual transactions economically below what is possible across the legacy credit-card settlement systems.

Who is available to forge that protocol and cause its adoption? Technical standards bodies seem ill-equipped to efficiently handle the task. Unilateral action by the very largest technical players (IBM, Microsoft, AOL) would be regarded as suspect by the major publishers and banks. Action by the bank/credit-card orbit would be challenged by content owners and user representatives.

In fact, a good argument can be made that any approach which is "owned" by a small group of equity investors is going to be sandbagged by enough competitors as to fail to gain critical-mass acceptance. Yet establishing the system is a non-trivial assignment, and if the entities doing so are not the government, then private capital must play a role and be rewarded for doing so.

Q: A possible answer -- the member association?

Could the answer be a member association, similar in many respects to Visa? This model is actually familiar to newspaper publishers, who formed The Associated Press in 1848 as a news-gathering cooperative and have continued to govern it under the Membership Corporations Law of the State of New York, without stock and without profits, raising "assessments" each year to match the operating requirements of the service. Neither of these organizations, however, recognizes in any formal way the interests of the consumers of the service they offer. And Visa does not recognize in its governance structure the rights of merchants. The IIPC member association will need, if it is to find broad support, to recognize in its governance structure the interests of at least four different constituencies: rights-holders (authors/artists), publishers (aggregators), audience-owners (banks, publishers, billers etc.), and end-users.

Q: If the association is the right form, how do you solicit members? As we have spoken over three years with publishers, telcos, ISPs, banks, researchers and consumers, we have heard universal acceptance of the notion that one ID, one-bill access to digital information anywhere represents "goodness" -- and equally universal skepticism that we or anyone else can scramble the chicken/egg, content/audience-owner mix.

Somehow the realization has to form in the marketplace that the need for a settlement association is so critical, and the solution so obvious, that a critical-mass of participants will agree simultaneously. The largest publishers are waiting for this to occur, but are afraid to sacrifice market share or risk exposure to legal challenge by taking the first steps (and also to some degree concerned about the impact on the dominant model of advertiser-support of information delivery). The idea behind the Internet Information Payments Collaborative is to legitimize and direct the start of that rapid coalescence, or phase change. Quite deliberately, we have not embodied the IIPC in any corporate form as yet, to allow for the possibility of a unique structure suited to the requirements of the task.

Q: What about the antitrust and privacy implications of member associations?

The government's antitrust pleadings filed recently against Visa and MasterCard serve notice that the public interest requires significant consideration of the competitive aspects of any effort to collude around the formation of an information-payments structure. For our part, we designed Clickshare with this in mind. The trusted third-party which authenticates users and logs their transactions never knows the name or identifying information of the user. Nor does it interfere in anyway with the process of pricing. Information vendors set a wholesale price; service providers pay that wholesale price and then "retail" the information to their end users at whatever price they wish above or below the wholesale price they are charged. These are entirely market functions. Clickshare never "owns" any information; it merely notes and processes settlement data provided by the wholesale seller and the retailing buyer.

Collaboration necessary to establish the system needs to occur around issues such as transmission protocols, field sizes, attributes and contents, levels of authentication and security and optional service features. There need be no common discussion or understanding regarding price or the acquisition or use of personal information. Consistent with the landmark U.S. Supreme Court case (Associated Press et al. v. United States, 65 S.Ct. 1416, June 18, 1945) forbidding The Associated Press to blackball from membership a competing newspaper in a founding member's home city, access to the facilities of Clickshare-like authentication and logging services must be open on an equal basis to all classes of competitors.

Q: If a member cooperative is formed to manage an information-payments infrastructure, where does this leave the investors in private ventures such as Clickshare Service Corp.?

The investors in Clickshare Service Corp. are largely people who share a deep concern for the roots of our democracy. If it were determined that Clickshare's technology was useful or necessary to developing the roots of a free market for the exchange of digital information, and if it became obvious that the most efficient way to empower such a market were through a sale of Clickshare's intellectual property to a member association at a fair-return valuation, they would likely respond.

A MARSHALL PLAN FOR OUR DIGITAL INFORMATION FUTURE

After World War II, the United States was at a crossroads as a nation. We could have retreated into our isolationist past. But instead, we chose to accept responsibility for laying waste to Germany and Europe in the legitimate cause of freedom. Adapting the Internet to the requirements of the next century appears hardly as dramatic an assignment. But the consequences of failing to perceive the threat are equally as great.

Q: And what is that threat?

The Internet may end up controlled by governments, or by a handful of corporations driven only by the need to maximize profits in an appeal to the venal instincts of the human animal. In either case, the public will eventually be driven to erode the principles of democracy in a dangerous and perhaps futile effort to regain those principles from government or corporate hands. Individual freedom of expression may be lost -- either squelched by a tyranny of the governing majority, or homogenized to irrelevance by corporate mass marketing.

With the Internet Information Payments Collaborative, we have the opportunity to help design an institution and a structure so open, fair, flexible, global and self-sustaining, that it can head off an otherwise inevitable tragedy. The June 17-19 roundtable summit, in Boston, is designed to begin that process.

Which of our media and financial giants will put aside short-term financial gain and join in the task?

_________________________________________________________________

The Internet Information Payments Collaborative c/o The Applied Computing Systems Institute of Massachusetts Inc. Massachusetts Venture Center 100 Venture Way Hadley MA 01035