1. With the friendly assistance of: 4FriendsOnly.com AG (4FO AG) and Fraunhofer IIS AEMT Matching Algorithms in File-sharing Systems to find new Users having new Content I 2 CS - Innovative Internet Community Systems Leipzig, 19-21 June 2003 Juergen.Nuetzel@TU-ILMENAU.de

2. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 2 At a Glance...  Music - a Virtual and Public Good?  An Alternative Approach  The Potato System  User-Matching Algorithm  P2P Version of the Algorithm  Modifications  Summary

3. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 3 Music – a Virtual Good Is digital music a public good? 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!

4. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 4 Music – a Public Good? Non-rivalry: several individuals can consume the same good without diminishing its value Non-rivalry: several individuals can consume the same good without diminishing its value free rider problem: It is not possible to “convince” consumers to pay – they can consume the good anyway or Non-excludability: an individual cannot be prevented from consuming the good Non-excludability: an individual cannot be prevented from consuming the good Make artificial excludability Make artificial excludability Find added value with excludability Find added value with excludability Digital Rights Management Alternative approach: Potato System …

5. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 5 The Potato System ... brings users and providers back together. If the user is willing to pay, a unique transaction number (TAN) that references the payment is attached. He will receive a fraction (e.g. 50%) of the payments of subsequent users doing the same. A user may decide to pay for the file. If he does so, he becomes automatically an active part of the distribution network for digital music. He gets additional matching and community services. No copy protection or other restriction will be imposed on the users! Users are able to – they are encouraged to – re-distribute the files. Here is how it works…

6. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 6 Ginny‘s Paid Download PotatoSystem.com Web-Service mysong.mp3 1 Fred and George publish sell-link with TAN=31881 George transfers transaction information: old TAN 31881 and Ginny’s login 3 Potato System answers with a new TAN=37121 4 George delivers the file to Ginny. George adds the new TAN to the file name. mysong4fo37121.mp3 5 6 Ginny clicks the link with TAN=31881 and pays 1.10 Euro for the song 2 6 Ginny wants to hear Fred‘s music Fred music provider George’s Music Site Now, Ginny can earn money with Fred’s song.

7. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 7 Ginny Passes on Ginny offers Fred‘s music 1 mysong4fo37121.mp3 Ginny’s P2P client transfers the song to Harry’s P2P client Harry likes Fred’s music also PotatoSystem.com Web-Service George transfers TAN=37121 and Harry’s login 3 answers with new TAN=39521 and Ginny’s commission 4 6 Harry clicks the link with TAN=37121 in the P2P-Client and pays 1.10 Euro for the song 2 Fred music provider 6 mysong4fo37121.mp3 6 4 new TAN=39521 George’s Music Site 5 mysong4fo39521.mp3

8. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 8 Community and Matching 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.  Ginny wants to contact people who like the same music

9. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 9 Matching Algorithm [1] ProviderSongs FredS01 – S05 JoeS06 – S10  2 Content Providers and 10 Users UserPaid Songs GinnyS01, S09, S10 DracoS02, S03, S04 MarioS01, S02, S03, S09 AlexS01, S07, S08, S10 FrankS01, S03, S04 StephanS01, S05, S06, S10 CarstenS07, S08 RobertS01, S03, S06, S09 AnjaS01, S05, S10 JuliaS01, S02, S03, S04 Ginny selects song S01 for matching

10. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 10 Matching Algorithm [2]  Find the songs which are close to song S01! Songs bought by users who bought S01 also -> S02-S06, S09,S10 All songs of the provider of S01 -> S01-S05

11. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 11 Matching Algorithm [3]  Found songs sorted by frequency of occurrence: SongFrequency S019 S035 S104 S093 S023 S043 S053 S062 S071 S081 Ginny already knows S01, S10 and S09 5 users who paid for S01 paid also for S03 Points for rating

12. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 12 Matching Algorithm [4]  User rating based on song ratings User“Points”Paid Songs GinnyS01, S09, S10 Draco11=3+5+3S02, S03, S04 Julia11=0+3+5+3S01, S02, S03, S04 Mario8 =0+3+5+0S01, S02, S03, S09 Frank8 =0+5+3S01, S03, S04 Robert7 =0+5+2+0S01, S03, S06, S09 Stephan5 =0+3+2+0S01, S05, S06, S10 Anja3 =0+3+0S01, S05, S10 Carsten2 =1+1S07, S08 Alex2 =0+1+1+0S01, S07, S08, S10 Draco and Julia are most attractive for Ginny. They have 3 songs which are close to S01

13. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 13 P2P Version  Calculation is done on Ginny’s PC Ginny: S01, S09, S10 Draco: S02, S03, S04 Mario: S01, S02, S03, S09 Alex: S01, S07, S08, S10 Frank: S01, S03, S04 S032 Points S021 Point S041 Point S071 Point S081 Point 2 Draco4 Points Mario3 Points Frank3 Points Alex2 Points 4 S02, S03, S04 1 S01, S02, S03, S09 1 S01, S03, S04 1 3 S01, S07, S08, S10 1

14. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 14 Useful Modifications  Ginny searches for music which is new for other users Drop the song (S03) with highest frequency of occurrence (5) ! S03 is less attractive because almost every user has it already

15. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 15 … with Modifications  Drop the most popular songs Ginny: S01, S09, S10 Draco: S02, S03, S04 Mario: S01, S02, S03, S09 Alex: S01, S07, S08, S10 Frank: S01, S03, S04 S032 Points S021 Point S041 Point S071 Point S081 Point 2 Draco2 Points Mario1 Point Frank1 Point Alex2 Points 4 S02, S03, S04 1 S01, S02, S03, S09 1 S01, S03, S04 1 3 S01, S07, S08, S10 1

16. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 16 SummarySummary The main (but very low) value of a virtual good is the possibility to copy and re-distribute it. Users are more interested in getting contact to other users. They even pay for it. 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 users. If they pay, they get access to users matching this song. They get also access to special fan material and cheaper concert tickets. The system is not limited to digital music only. Any virtual good, such as images, videos or software could be managed by the Potato System.  Advantages for users and producers/artists

17. 2003/06/21I2CS 2003, Leipzig, Juergen.Nuetzel@tu-ilmenau.de 17 Thank 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