1. 1 Digital Media Distribution Channels ©OverDrive, Inc. 2005 DRM Challenges in Digital Media Distribution Channels Steve Potash steve@overdrive.com May 18, 2005

2. 2 Digital Media Distribution Channels ©OverDrive, Inc. 2005 A Framework for the Epublishing Ecology September 25, 2000

3. 3 Digital Media Distribution Channels ©OverDrive, Inc. 2005

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8. 8 OverDrive Operates a Global Digital Content Clearinghouse Content Reserve – B2B Digital Warehouse 100,000 Digital Media Titles eBooks, eDocs, digital audio books, music, video 400 publishers & suppliers 34 countries, 32 languages, 19 currencies Digital Library Reserve 1,000 libraries Private Reserve Custom Fulfillment for Publishers, Education, Corporate Solutions Custom fulfillment, hosting, Library lending, retail, eCommerce, DRM publishers access management server retailerseducation Content Reserve ® Adobe PDF, Microsoft formats Mobipocket Windows Media Audio/Video Digital Rights Management creator libraries Content Reserve is the largest commercial Digital Book repository.

9. 9 eBook Retail & Distribution Channels ©OverDrive, Inc. 2004 WH Smith (UK) Retail website for purchase of Rights Protected Digital Media

10. 10 eBook Retail & Distribution Channels ©OverDrive, Inc. 2004

11. 11 Digital Media Distribution Channels ©OverDrive, Inc. 2005 Content Rights are Layered by Stakeholders 1. Creator-Author-Agent (Publisher) Grant distribution and resale rights to Distributor General copyright protection policies (no-redistribution) Business Model approval - licenses Territorial rights, discounts, bundles, granularity Accessibility, regulatory initiatives, archive/escrow 2. Aggregator-Distributor-Clearinghouse (OverDrive) Apply DRM to all content for B2B channel partners DRM technologies impose rules, features, limits Hybrid materials (audio-video-digital print) Preview Rights, Archive, Cover Images & Marketing Data

12. 12 Digital Media Distribution Channels ©OverDrive, Inc. 2005 Content Rights are Layered by Stakeholders 3. Channel Partners (Retailer, Library, Corporation, School, Publisher Direct) Return Policies, lending policies (length of loan) Concurrent access, super-user accounts, consortia Promotional units, author access, preview rights DRM challenged exceptions (high security) 4. End User Issues: Format & Software Rights Varies by media type (eBook, audio, video) Software format DRM variances (Also by Version #) Print, Copy-paste, Read-Aloud, Early Return, Burn to CD, Back-up license

13. 13 Digital Media Distribution Channels ©OverDrive, Inc. 2005 DRM Challenges for Clearinghouse Multiple Business Models from Single Digital Object Software Format Inconsistencies Emerging Channels, Devices, Access Models Patent Infringement and IP Threats Maintaining Value of Content while Balancing Protections

14. 14 Digital Media Distribution Channels ©OverDrive, Inc. 2005 Challenges/Opportunities for Rights Expression Standards Large consumer markets will drive applications Key platform vendors need to be engaged IP issues create barriers for partnering on standards Accessibility issues – regulations may drive standards