EXPLORING THE NEW MEDIA

Migrating Online from Print and CD-ROM:
Business and Legal Issues

University of Virginia
Division of Continuing Education
Publishing & Communications Program

San Francisco, California
September 27-29, 1995

MEETING NOTES
by Barbara Meyers
Unabridged Version

© 1995 Meyers Consulting Services
IP News (Internet Edition) Fall 1996

Keynote Address: Economics of the Internet and Electronic Publishing

Hal R. Varian, former Kampf Professor of Economics, University of Virginia and recently appointed Dean, School of Information Management and Systems, University of California at Berkeley.

Hal was scheduled originally as one of the speakers during the course of the seminar, but was asked to remake his presentation into the keynote. When he queried Beverly Jane Loo (Director, Publishing & Communications Program) as to the difference between a keynote address and a presentation he was told that when giving a keynote you had to tell a joke.

So, here's Hal! A project manager, a hardware engineer, and a software engineer had just completed a major program that had required them to live atop a mountain for a number of months. As they were driving down the mountain, their vehicle's brakes gave out, the driver lost control, and the vehicle proceeded to careen down the mountain. Luckily, they managed to crash into a tree which stopped their descent with no one injured. All three piled out of the car and began to suggest solutions to their dilemma. The project manager offered to establish a committee which would engage in the latest techniques such as TQM to determine the problem. The hardware engineer pulled out his trusty Swiss army knife and declared all would be well soon if they would just let him repair the damage. Finally, the software engineer spoke and suggested that they push the vehicle back up and see if it does it again.

Following that, Hal then provided some Internet demographics. As of May 1995, 14% of all U.S. adults are online using all forms of the media. He then compared demographics about adults online with the overall U.S. population and found the following:

Online Statistics Average for U.S. Population
57% male 48% male
35 years old 43 years old
57% college educated 42% college educated
39% single 25% single
$58K income $44K income

When asked "What do you do online?" users replied: 29% work; 16% seek entertainment, and 16% seek information sources. A survey of World Wide Web users worldwide with 13,000 respondents provided the following statistics:

Demographics concerning Internet users (with direct access) conducted by John Quaterman for the IRTF Survey Working Group:

July 95: 6.6 million hosts = computers with Internet addresses
Aug 95: 22.6 million Internet users
Aug 95: 35.0 million E-mail users

O'Reilly & Associates had conducted a telephone survey and the results were issued September 26, 1995 so Hal had only preliminary numbers. Their findings were that there are 5.8 million Americans with direct access to the Internet and an additional 3.9 connected via online services. Hal believes these numbers to be conservative and low. He feels that Quaterman's 22.6 million Internet users is the best number to use in gauging the population.

Hal then proceeded with a very brief history of the Internet starting with the Advanced Research Projects Administration (ARPANet) that began it all which was followed by the 12 Supercomputer Centers that formed the backbone for NSFNet which was in existence from roughly 1989-1995 at a total cost of $20 million/year. As NSFNet is phased out, we now have the creation of NAPs = Network Access Points which are the locations where local providers can connect with each other. BNs (Backbone Networks) will provide for high-level scientific data transfer while ISPs (Internet Service Providers) will manage privatized local backbones.

Current problems are mainly growing pains dealing with issues such as:

  1. How to bring about coordination & interconnection among all the backbones based on difficulties with . . .
    • technical model: how to make it all work now versus the original architecture and algorithms;
    • business model: NSFNet turned off April 30, 1995 and everything works "technically," but business relationships need to be ironed out.
  2. How to maintain QoS (Quality of Service) for real-time applications and create a model for performance the user pays for.
  3. How to make money on open standards while bringing about standardization (essential for operations) in a commercial environment.
  4. How to bring about secure, trusted financial transactions and overall file transfer security (Hal related an anecdote about when cars were first invented they didn't have keys only starter buttons; that is, until a few cars were stolen.).

Academic concerns relate to scholarly communication, most especially with regard to e-mail, who will pay? Will there be cheap, efficient technology at low bandwidth to satisfy their needs?

There is much debate and concern over the cost of "eprints." Major example is the High-Energy Physics server at Los Alamos National Laboratory run by Paul Ginsbarg:

Hardware: $5,000 workstation
Software: development time
Wetware: 2 postdocs + .5 systems administrator
Finances: $1 million NSF grant

Hal likened the HEP to the FEN (Financial Economics Network) Model which is based on capturing 100% of a small subfield then moving on to other areas.

Varian's General Observations

A. Cost of Electronic Publishing

Large Fixed Costs: 70-80% = first copy cost

Small Marginal Costs

Price Differentiation = charge different users different prices to cover costs and seek profit

Product Differentiation = support differential pricing by having different product lines with different levels of access at different speeds of immediacy (lag time in release of information, e.g. financial and weather information based on past and up-to-the-minute data easily segment a market), format (e.g., ASCII, PostScript, rich text), organization of information, linking (first product has flat text, second product has hypertext links), etc.

Hal suggests selling abstracts at one level and full text at another when dealing with scholarly material.

B. Cost Recovery

For academic societies with members and libraries as their primary market segment, Hal believes there is only one answer: differentiate the product. Library subscription rates should depend on the number of members, e.g. if all economists/economics professors on campus belonged to the American Economics Society then the library would get a lower rate.

  1. Make the library use costly via either a) on-site use only for licensing and/or b) limitation on the amount of access.
  2. Make membership more valuable by a) current awareness through linking thus personalizing the product and b) data archives and eprint archives, etc. available to members.

C. Archiving and Discovery

Basically this breaks down to the traditional library model versus the brave new world. Will traditional roles break down? There needs to be a new pricing model for archival use with attention toward digitization of existing materials.

D. Intellectual Property

Concerning academic materials, this issue comes down to sharing versus commercial copying. Sharing is not necessarily bad (e.g., video stores). What will we do in the area of site licenses? Will we limit the number of downloads? [Aside: Hal provided no answers; but did reference both the Xerox Park and Exotic Solutions (Internet Service Provider) experiments dealing with secure metering imbedded in the hardware which treats information like objects as is done with all products in the mass market.]

Hal then turned to what he called the "Economics of Attention." How do we provide quality information to our users? This has been accomplished traditionally by refereeing (peer review) which when applied in the Internet environment will entail a change in cost of publication from ex ante to ex poste filtering. One example is the GroupLens designed to look at Usenet News which publishes 90 megabytes/day. GroupLens will find information of real interest and value to you by amassing information from your prior reading. At the end of each article, you give an interest score as well as see what other readers thought. The software provides a weighted interest score relevant to whether you and other readers agreed in the past. Another example is Ringo which recommends music based on your selections from a list of CDs compared to the lists of others. The software finds areas of overlap then sends back to the user a list of the percentage of CDs that were overlapping. MIT is also working on a filtering mechanism to be used after the fact for Internet information retrieval.

From Print to Multimedia Publishing

George A. Peterson, Vice President of the National Geographic Society and Director of its Educational Media Division, where he is responsible for the financial management, product development, marketing and public affairs activities of the division. George's product lines range from traditional print and audio-visual media to advanced technologies with new flagship programs including National Geographic Kids Network, GTV, and CD-ROM.

George began with a quick succession of quotes that he felt described life on the Internet. Relating the transcendental elements of Henry James' happiness found hurtling along the road with Ralph Waldo Emerson's "Everything that's interesting is on the highway," he then concluded with Yogi Berra's "When you come to a fork in the road, take it." An advocate of taking the road toward the future, George describes himself as a short-term skeptic and a long-term optimist regarding the new technologies.

A magazine is a tool made out of cellulose. Now, we are using tools made out of silicon. But, the mission has not changed over the long haul as we harass the different communicating media. We must balance between short-term financial risk and long-term viability.

Paper-trained generation = us

Light-trained generation = post-TV, the kids of now

Technology is a part of their ethos. They don't think about it.

George's Q&A

Q: How do you make a small fortune in new media?
A: Start out with a large one.
George is grateful that his employer has the dollars to outrun his mistakes.

Q: (to J.D. Rockefeller) What are the secrets of success?
A: Get up early. Work Hard. Discover oil.
George cautions that the new media is NOT the oil business. It's a wild ride.

Q: Does the computer industry really love standards?
A: Of course. That's why it has so many of them.
George believes that the primary reason for unpredictability in new technologies is due to this.

Before changes in prepress or printing, details of the technology were not known to the audience. Now, our audiences are bedeviled by it all along with us and this is dangerous in a business model. Some consumers enjoy the wild ride, but there are limits to their tolerance.

George's Iceberg Issues

Multi-media really means multi-expense because you have products combining multi-technologies and multi-problems. Multimedia is like an iceberg. It has an attraction, especially when shining in the sunlight, but there is a large dangerous bulk at the bottom.

In George's eyes, the Internet is like the Netherlands' historic Tulip Mania. There is widespread public interest. The news media has pumped it up (George called Newsweek the house organ for Microsoft). It is fun. But, when you are doing business, where's the money?

Dave Barry defined the Internet as CB radio with a lot of typing. George wants to know how do publishers insert ourselves into the "reach out and touch" phenomena without losing money? Is the 'Net the place and the audience for what we as publishers produce? Not always because the 'Net is instantaneous which may work for newspapers, but not everything else.

Final comments:

Information can NOT be free.

The Internet audience thinks it should be free.

We have a problem.

Audience Q&A

Q: I hear you saying don't do it.
George's Answer: No, I've just given you my short-term perspective. In the long term, it will be so pervasive that we can not afford not to do it. Example: Someone invented a car. But who invented the parking lot? We as publishers need to invent the parking lot.

Q: Does that mean print will disappear?
George's Answer: No, because as Hal said, print will be the most reliable media for archiving and transporting information for the long term. Electronics screw up the fundamental business of publishing, but so does the Postal Service and the paper industry.

Q: Who is doing well?
George's Answer: Any announcements about success are coming out of the Stockholders Relations group, not the business departments. They are just PR.

Q: How do you get back your first copy costs when you only sell a few hundred copies of a CD-ROM?
George's Answer: I don't always get my first coy costs back. But my boss can't harp on me for surplus inventory!

Q: What kind of dollars are you seeing from your current online activities with Prodigy and America Online?
George's Answer: Prodigy paid us to be involved. We make no money from AOL's product which is crude, straight text and not very good. It's like building a baseball field. Build it and they will come. Well, they'll come, but they won't pay!

Making the Move from CD-ROM to the Net

Diane M. Heppting, president of Eye-Magic Media, Inc. Diane's third company which is developing CD-ROMs for online use. Diane has played a key role in developing distinctive, award-winning products and packaging both software and CD-ROMs.

Diane spoke from a management point of view suggesting:

  1. Set goals ahead of time.
  2. Know what you want to get out of online and watch your costs.
  3. Once you are into it, be ready to keep your information current and refreshed or people won't come back.
  4. Really look at the content. Technology will dictate what you can put online and make work. Disney's homepage is one of the most beautiful graphically, but that means it is also the slowest.

With the new technology, we all have our own little printing presses and most of the time they don't work. This focuses us on the content we choose. Build toward the content people are looking for on the 'Net. There are four reasons for using online:

  1. Shareware & Software
  2. Reference Works
  3. How-to & Utilities
  4. Entertainment

Diane's formula for success on the Internet is to focus on a little niche and then grow. The Internet is the conduit to allow people to pick and choose from all the different media. Ask yourself: What is the purpose for going online? What is the information advantage to the consumer?

Diane's new product with Eye-Magic Media is The HomePage Builder, an editor, a CD-ROM word processor product so you don't have to know HTML to have a HomePage. Just last week, as they had reached 60% in their development cycle, Netscape has put up an editor too! This is a good example of how the big guys are moving at a fast pace. Be ready to change plans as you go if you want to stay viable in this business. CD-ROMs have a large distribution problem. For example, if you want to get into COMPUSA, you need to buy the shelf, plus kick in big bucks for corporate advertising which is run by them. Model #2: you give us two free copies for each store (usually hundreds in a chain like COMPUSA) and IF they sell, we'll reorder. It's just another buy-in.

Audience Q&A

Q: Do you favor online for distribution of CD-ROM?
Diane's Answer: Definitely. Online is great promotion.

Q: Have you had any content problems with your CD-ROM?
Diane's Answer: Some. One in particular springs to mind. It was called "Hollywood Stunts." We believed that the publisher had gone to every studio and every actor for a release, but found out later that they did not get a release for all rights or from all the actors and so we needed to deal with the Director's Guild and eventually didn't have all the releases that were necessary and the product didn't happen after a lot of time, work, and money. There have been a few instances like that along the way. However, I am very excited about online in spite of experiencing a "bump in the night."

Going Online with Publications

George Schlukbier, Vice President, New Media for the (Raleigh, N.C.) News & Observer, where he has created a division geared toward developing new and entrepreneurial products from online computer services to faxed-to-subscriber publications to an online version of the newspaper called the NandO Times.

The Raleigh News & Observer is a small circulation paper, 165,000 daily and 200,000 on Sunday. From their experiences, George's boss (Frank) believes that you need to develop a philosophy because you're not going to make a lot of money. George's philosophy is that the newspaper paradigm is all wrong right now. The online version should not come last.

NandO.Net defines that content was always important, but now it's really important.

George's 1st major piece of advice: Go out there on the Web and stake out your territory. It is the Wild Wild West! To keep NandO News up to date with all the wire services, George has 10 people who work 7 days/week and 20 hours/day. The site handles 6 million hits each week.

George's 2nd major piece of advice: When you present text online you should have layers and links to other stories and sources of information plus photographs. You, as publisher, need to be ready to jump through as many hoops (copyright, royalties, etc.) as are required to get the information you need to satisfy your reader.

George's 3rd major piece of advice: The future will be converting everything into digital first then creating another (print?) product later. Frank's philosophy concerning this is that newspapers need to do so because then they become two parts of the media buy for the home, not just one, and another hook (relationship) is built.

George's 4th major piece of advice: Being the first doesn't matter anymore. It's being the best. May the best server win!

George's final major piece of advice: Now as a publisher, I have a responsibility to be in contact with my public and to respond and interact with them. There needs to be a constant state of discovery. Every time you log on, there should be something new. The 'Net as you see it today will not be the 'Net in two years or five years and you can't just be a content provider. The technology is a part of it. You can buy it; but it's much better to grow it.

NandO.Net provides for transactional ordering for advertisers. They receive orders via email. George's group created their own encryption software figuring hackers will go after Netscape's programs more often (they were right as they have only had a few hackers try to break in).

Audience Q&A

Q: How was the decision to start your division made and how did it grow?
George's Answer: From the top down. It was me and one person to start (in the wet basement of an old building) and then we built a team that now numbers 52 people with a roughly $2.5 million budget.

Cyberlaw for Non-Lawyers

Mark F. Radcliffe, a partner with Gray Cary Ware & Freidenrich, a 260-person firm in Palo Alto, CA, specializes in licensing and intellectual property law. His practice focuses on representing high technology and multimedia clients, one of which is Network Solutions, Inc., the organization which assigns Internet domain names.

Mark noted that global Internet connectivity is growing daily. In January 1995, there were about 5 million host computers and it is projected that there will be 124 million by the year 2000. There are 6 million people on the Internet in the United States, twice that worldwide.

In terms of World Wide Web traffic, there are 1,500 new Websites every day and Network Solutions is registering 1,000 domain names every day.

There are five major types of domain names: com, net, org, gov, and edu. They are assigned on a first come, first served basis. The "system" doesn't take trademarks into account so Mark's advice is: Register early and register often. There are limits on domain names as they are not territorial and make no distinction by product line. Payment for a domain name is $100 for an initial two-year term followed by $50 each following year. As of July 1995, a policy concerning domain name disputes has been in effect. Network Solutions will grant the advantage to an existing trademark if the registration owner can produce proof. If there still remains a problem, then Network Solutions puts the domain name in limbo (removes it from all Internet hosts) and the matter is settled in court.

Challenges of Cyberspace

- Global: There are no territorial limits. But, all laws are territorial.
- Digital: Two issues exist.
a) There is no "writing," (So, how do you get documents "signed" on the Internet?) yet many laws are based on putting it in writing and signing it.
b) There can now be perfect copies. Before now the technology wasn't good enough to create exact duplicates, now you need legal protection more than ever before.

Existing Works: Critical Issues

[For articles about this subject, check the firm's HomePage at http://www.gcwf.com]

Do you have electronic rights?

Do you have public display and public performance rights?

In the "Future Technology Clause" of your copyright transfer agreement, be sure to cite specifics along with the phrase "all technology or all media now and in the future." Even so, there may be suits and the court will look out for the unsophisticated parties (usually not the publisher).

Reservation of rights is becoming an issue and is based on all rights not expressly granted.

Reversion of rights suggests that under the Copyright Act, you may not be able to make new derivative works.

Selling on the 'Net

Enforceability is still a problem and is not yet clear. In California, contracts for sale of goods must be in writing if the value exceeds $500 which limits what can be sold in cyberspace. Both Utah and California are working in the area of digital signatures. Problem = What is it that is a digital signature? Public/private key encryption, where the public algorithm is known to everyone, but the private key is known only to you, may be the answer to some security issues.

There has been some amount of spoofing in terms of signer authentication. In terms of document authentication, the solution to spoofing is by certification of both parties by a neutral party that the document and signature have not been changed.

Liability

A very confused area of the law that is being cleared up by case law is copyright absolute liability (What will be the scope of your liability if you have an interactive site?) with regard to:

The bottom line is that if you have a Chat Room, you will be liable for what is said in that Chat Room no matter by whom.

Policy Issues

New Issues

Encryption - The 120-character U.S. code can not be used for global commerce because we are restricted to only 40-character codes in export. The "Clipper Chip" is a problem that remains unsolved as it is not really commercially secure. In the new 250-page NII Report they talk about digital transmissions defining transmitting as a violation of distribution rights. The report also talks to the fact that there is a flip side to the copyright infringement issue, that in fact there should be a prohibition on "cracking" devices. There is a need to look at the falsification/alternation/removal of copyright management information.

In conclusion, Mark urges that everyone keep track of new developments in the area. Understand the risks which will be uncertain for a long time. Reduce risks through contracts.

Navigating the Legal Maze in Multimedia and Online (Panel)

Carol A. Risher, Vice President for Copyright and New Technology, Association of American Publishers (AAP), is responsible for developing and implementing AAP positions on copyright and for assisting AAP members in their efforts to move from print-based products to electronic products.

Carol described the actions of an AAP Committee which resulted in a report this year entitled: "Copyright Management and the NII - Report to the Enabling Technologies Committee of the Association of American Publishers" (produced by Christopher Burns, Inc. May 31, 1995). The report costs $50 and can be obtained from Nisha Vora at AAP, (V: 202-232-3335; F: 202-745-0694). There were two major findings:

  1. No single system will be sufficient to deal with all the copyright management issues of AAP members. There will be many solutions to the problem.
  2. A copyright management system has three parts:
    a) legal framework
    b) technology deterrents
    c) business plan = if you can't stop something legally or technically, then build that into the product design and/or price.

Further in the report, Chris advises publishers to talk with technologists. Carol is most concerned with such issues as: How do we protect our print product from being scanned by a third party? AAP has launched the Print to Digital Task Force to look into this and has already met with Xerox PARC to examine its GLIF technology which imbeds a product code in a single character which can be scanned and tracked. As did Mark Radcliffe, Carol also referenced the U.S. government's report on "Intellectual Property and the National Information Infrastructure." The report is available on the IITF Bulletin Board (accessed through the Internet by pointing the Gopher Client to iitf.doc.gov or by telnet to iitf.doc.gov [log in as gopher]). The Bulletin Board is also accessible at 202-501-1920 using a personal computer and modem. A printed copy of the report can be obtained by writing "Intellectual Property and the NII," c/o Terri Southwick, Attorney-Advisor, Office of Legislative and International Affairs, U.S. Patent and Trademark Office, Box 4, Washington, DC, 20231.

What is fair use in the networked environment? What is the nature of the work? What is the nature of the use? What amount of material is being sought for the new work? What is the potential value of the portion sought? These and other questions are raised during a series of on-going meetings which Carol attends as a representative of AAP with 59 other organizations represented each month in an attempt to develop guidelines for fair use. The major push for this initiative comes from the CCUMC = Consortium of College and University Media Centers. To support whatever the group develops, Bowker is already working on a database of permissions.

Christine Steiner, recently appointed Secretary and General Counsel of the J.Paul Getty Trust, Christine was Assistant General Counsel to the Smithsonian Institution and is an active participant in the field of intellectual property rights in the new technologies.

Christine spoke briefly about the Getty Art History Information Project and the Museum Education Site Licensing (MESL) Project both of which focus on standards for exchange and licensing schemes but completely avoid the Fair Use issue. MESL provides for a license across the board; no revenues, only exchange.

Mark Radcliffe interjected a list of attitudes that he calls RIPs, Red Ink Producers:

1. We paid for it. We own it.
"Big, bad publishers need to get the copyright transfer, not just pay the money."
2. Don't worry. We shook hands on it.
"Remember the Hollywood adage: An oral contract isn't worth the paper it's written on."
3. Of course, we've had those rights forever.
"This is not always the case, especially with illustrations and introductions. Check your contracts."
[Carol's Aside: As of January 1, 1996, foreign works that had been in the public domain will be back into copyright. "Don't fight. Clear rights."]
4. We only used a little bit. It must be fair use.
"NOT always true."
5. If we can't get Bette Midler, let's get her back up singer.
"Rights of personality are an expanding area of litigation. Be careful."
[Christine's Corollaries:
It's an educational use. "Doesn't always work."
We're not making any money. We're only covering costs. "Always get permission."]

Thirty-five percent of a software company's revenues are from upgrades and maintenance agreements. This revenue stream is not there for books yet. Maybe the information highway will be a distribution channel after all. We're not sure where we are going with functionality.

Contract negotiations have to be dialogues and not heavy-handed so that authors understand what is going on with electronic rights and finances from the publisher's perspective. "New" intellectual property protection is a part of the online environment (patents, software). Publishers need indemnities from technology providers to avoid risk. The Uniform Commercial Code is a part of the environment for CD-ROM products. If your software engine doesn't work, you may be liable. You may need a disclaimer as a protection, a warranty of non-infringement on third party rights.

Audience Q&A

Q: Can a Buyer's Guide be protected online?
Christine's Answer: Yes, in terms of creativity of compilation and originality in arrangement. Protection of databases is even greater in Europe.

Q: How do you get global copyright protection?
Mark's Answer: You get it in your contracts in place of old distribution rights clauses. Just remember the export control rules placed by the government (e.g., Cuba, North Korea, Libya) which means you can't send anything at all and some other restrictions exist. Be sure to exert your choice of laws in your agreement (opt for U.S. copyright law).

Publishing on the World Wide Web (Panel)

David Seaman, Director and Coordinator, Center for Electronic Text, Alderman Library, University of Virginia which since mid-1992 combines an online archive of thousands of SGML-encoded electronic texts with a Center housing hardware and software suitable for the creation and analysis of text.

David began by noting that "after two and a half years of operation, the Electronic Text Center continues to develop its collection of on-line texts and related technologies, and continues to work to establish electronic texts as a mainstream resource for pedagogy and research at the University."

Given the fact that the library bears the burden as the trainer for electronic databases, David wanted publishers to know that the library doesn't "want your stinking CD-ROMs." They are not prepared to face electronic information as objects as they can't scale up to teach interfaces for every CD-ROM and store them all. They have one interface on their server and get the text running through the network so training is on the system, not individual products.

One example of the Center's approach to publishers is with the Chadwyck-Healy database in English poetry. They have a statewide site license so that small colleges get access when they could never have afforded it before and C-H gets more money from the State than they could have just selling two to three CD-ROMs in the entire state at $45-50K each.

David uses SGML so that information can come out in any desired format and you can reach the maximum audience with access via multiple formats. The main features of his Digital Library are:

[You can use the On-Line Archive by establishing a telnet connection to: etext.lib.virginia.edu and logging in as etext (this will give you the VT100 interface). You can also connect through the World Wide Web at: http://www.lib.virginia.edu/etext/ETC.html The publicly accessible texts in the collection are available through the same web address.]

John Unsworth, Director of the University of Virginia's Institute for Advanced Technology in the Humanities, which supports computer-based research projects in the humanities, is also an Associate Professor in the Department of English. John and a colleague started Postmodern Culture, the first peer-reviewed scholarly journal in the humanities to be published entirely over the Internet.

The Institute currently funds 25 computer-mediated research projects in the humanities. The focus is on large-scale, long-term research archive building. John noted that they are cautious in their progress as "the mission must be kept in mind as we change the [publishing] business and the business changes around us."

Postmodern Culture is an example of creating a community of interest from people in a variety of disciplines in a way not possible through a print journal. Such communications "leap-frog print" and can now do more online than you can with print.

The real limitation on the Web is the need to store and forward streaming and need to wait for the loading of data before viewing. It is not a practical medium for large amounts of video or audio, but this should change significantly in the not-too-distance future with Netscape and JAVA improvements. The media has the potential and the likelihood to change our behavior concerning information, but what won't change is our motivation about information. We as publishers need to change or we'll be lost. We need to accept the notion that students will come into a classroom knowing more than the professor. It will change the way that researchers work. Often, the humanities are called a "priesthood with special purposes." John thinks they can have "general purposes" into the larger universe.

Cyberspace Protection through Technology

Jennifer Bailey, Director of Customer Marketing, Netscape Communications Corporation, manages customer-focused marketing programs, including advertising and online electronic promotions. She began by breaking down Internet users by market segment [* = fast growing]:

government 15% business* 44%
education 39% home* 2%

With the Internet based on open standards and being hardware-software independent means that security has to be set up on an open platform as well. Publishing is soft goods (=information) on the Internet today and a publisher is a "content provider" in an environment with:

Money for free content is coming from advertising so users need to register in order for publishers to get demographics to sell advertising. Another model is pay-for-view.

Security Objectives
Enable Internet electronic commerce by reducing risk.
Enable stronger security for global marketplace.
Insure solution is open, interoperable, platform independent, and designed to fit into existing and future Internet theaters.
Publishing System
Soft Goods are made by:
  • content providers
  • on-line publishers
  • software distributors
  • international corporate users
Key Publishing System Capabilities
Registration and access control
Publication management (authoring issues)
Searching & cataloging
Billing & metering (e.g., subscription or pay-for-view)
  • registered members = click + tell password
  • guided tour = nonmembers
  • register now = click for free 30-day trial subscription can be charged on a monthly or yearly basis
User preference (based on previous viewing selections)
Profiling

Continued growth of the Internet is a significant market opportunity. Business models for publishing on the Net are evolving. You will be more successful when you put information out free first and then setting up a subscription. Charging from the outset diminishes your success.

Basic security infrastructure is in place, nonetheless additional security methods are in development. Just reported this week, the U.S. government is extending copyright protection to information on the Internet.

Audience Q&A:

Q: But what can we as publishers do to stop copyright infringement BEFORE it happens?
Jennifer's Answer: Technologically we don't have any capability except in terms of controlling unauthorized access.

Publishing with an Online Service

Robert M. Wilen, General Manager, WAIS [Wide Area Information Servers] WebCrawler Service, a subsidiary of America OnLine, is the creator of WebCrawler. [Aside: The WebCrawler was bought by WAIS which, in turn, was bought by AOL.]

Rob began with the question: "What if they threw a website and nobody came?" How do Internet users find your site? This is YOUR responsibility and you make it happen by:

  1. Hypertext links
  2. Editors/Programmers (packaging info by subject area)
  3. Directories (most used = Yahoo)
  4. Search tools (e.g. WebCrawler)
  5. Off-line promotion
1. Hypertext links
Why is it called the World Wide Web? To make it easier to navigate the world of information. It is an example of the power of collaborative effort. You need to pursue links to your site. The more people who link the better.
2. Editors/Programmers
These are produced by web magazines such as GNN, Pathfinder, and CiNET); online services; and Internet access providers.
3. Directories
There are two types: General = Yahoo, Galaxy, McKinley, GNN's WIC [=Whole Internet Catalog]; and Subject Areas. Rob's advice: Submit your site to each individual directory (about 20 major) or via Submit-It! (listing is free) with a good length abstract that describes your site. Suggests doing it individually as each directory asks slightly different questions and has slightly different formats whereas Submit-It! is a generic response to all of them. Be ready for the games people play, like adding an "A" to get to the top of the list. But Rob believes that quality will win out.
4. Search Tools
These are attempts to index the information on the Internet:
  • General = WebCrawler, InfoSeek, Lycos, Harvest (project at the University of Colorado which is based on centralized searching, not on robot schemes)
  • Full-text versus directory search
5. Off-line Promotion
Examples: advertising [Wall Street Journal has classified ad section for web sites.], media companies [house ads in all publications], and print directories [Internet Yellow Pages].

Online Services versus Internet

Factoid: AOL has 3.5 million subscribers.

An online service provides a marketing partner, programming support, technology, tools for authoring are different and are better for creating community and interaction.

Is the Internet secure? There is the perception that online services are more secure. Also, in terms of economics, there is a low cost of entry. The service provides the infrastructure and experienced staff to build your area and bears the marketing costs. For the publisher, it is "pay as you go." Scalability = you can't have a "success crisis." The online services handle the demand when you get popular versus what happens when you are on your own and customer demand multiplies, your start-up machine melts down.

So why go on the 'Net?

The Future of Electronic Commerce on the Internet

Cathy Medich, Executive Director of CommerceNet, a consortium whose charter is to accelerate the use of the Internet for electronic commerce, defined the Internet as a collection of stores versus a marketplace. There are currently 75,000 commercial Internet domains and 70% of the hosts are in North America, followed by Europe, Asia/Pacific Rim, and the rest of the world.

How Corporations Use the Internet Today

Impact of Electronic Commerce on the Internet

Near Term Longer Term
  1. Corporate communications
  2. Shrink development cycles
  3. Streamline procurement
  4. Cut costs in purchasing and support
  1. Empowerment of small businesses
    • small global companies
  2. Niche publishing
    • publications for tiny markets
    • new information packaging
  3. New information services
    • directories, brokers, referrals
    • financial management
    • supply chain management

Cathy believes that the development of micropayment technology will prove beneficial to publishers.

Overcoming the Limitations to Commerce on the Internet

Cathy notes that there are still transaction security requirements relating to the authenticity of knowing that both the buyer and the seller are who they say they are. There is a need for legal recourse in matters of non-repudiation.

Plus, there are issues relating to privacy and integrity which are being solved by the use of encryption and message digests via SSL or Secure HTTP. In terms of authentication, one method currently being explored uses certificates that are based on a hierarchical trust model. The buyer trusts the seller because the buyer trusts the certificate authority.

Here is how it would work to obtain a certificate:

Step 1: Provide proof of company name; identify authorized representative; identify Webmaster to certificate authority

Step 2: Receive certificate

Step 3: Provide facsimile of certificate to buyer upon request

Who will be the certificate authority? The Post Office? Banks? Who do we trust?

Cathy's Report Card on the Current State of Internet Electronic Commerce

Connectivity Very good and getting better
Cost Very good (low)
Multimedia Information Access Very good
Interactivity Excellent
Privacy Emerging [PEM = Privacy Enhanced Mail; SSL; and ShHp = Secure HTTP]
EDI & Payment Infrastructure Emerging
Authentication & Non-repudiation Emerging [Public Key Certificates]
Service Guarantee Poor [Not the most robust architecture]
Network Attack Requires firewalls

Cathy concluded by saying that this market is moving faster than anything people imagined. The major players are putting in money to make things happen.

How to Contact CommerceNet

Concluding Discussion: Comments made by Seminar Participants

On the Internet it won't be an "either/or" situation; either we have high quality information or we have trash. We will have both.

Online is very good for reference works as it allows for quicker and better access while at the same time it protects the information. Let's face it, it would be hard to download the entire Encyclopedia Britannica.

Ziff Davis slept through the cable revolution and they don't intend to let that happen again. The attractive thing about new technologies is they have allowed small non-New York-based publishers to emerge and thrive versus the three large corporations that gobbled up all the imprints.

There is unfocused excitement and anxiety growing exponentially. This is changing to some degree of comfort based on an understanding of creating information in a non-media specific way as publishers have started to put up websites and get their hands dirty. The Scientific American saw its newsstand sales increase after giving it away free online.

Now when an acquisition editor gets a manuscript you think multimedia versus the old days of reprint rights, movie rights, translation rights.

The danger for major publishers in the next year is hitting the rock when their overhead don't allow this to become financially viable and there will be a retreat. Then a cycle will occur perhaps like that of the personal computer where they will emerge in large corporations is anybody's guess and during this "window" the little guys will come in. [Nobody knows you're a dog on the Internet.]

The End

For more information or discussion about the seminar, contact Barbara Meyers via postal mail, phone, fax, or e-mail. Meyers Consulting Services, 1836 Metzerott Road, Ste. 1003, Adelphi, MD 20783-3448, USA, Voice: 301-434-6249, Fax: 301-434-0126, E-mail: 5526378@mcimail.com

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