Monday, September 22nd, 2014

Four-party model

The four-party model: Choice, control for consumers; opportunity for publishers?

By Bill Densmore & Buzz Wurzer

The open Internet has shifted access and control of digital information largely from publishers to consumers.  Many publishers are struggling to make money. Consumers have access to ubiquitous information, but have trouble sorting it or acquiring the most trustworthy knowledge.

How might we create a new playing field that affords increased choice and control for consumers, and new business opportunity for publishers as well?

Here’s a scenario, which we’ll call the “four-party model.”

Several media organizations have built proprietary or closed systems to distribute and get compensated for their content, both editorial and advertising. Software programs abound to run and manage the systems. However successful the closed systems are, there lies outside their universe massive numbers of news consumers seeking and using additional news content.

Let me ask you to envision two initiatives – one involving available technology and the other requiring business collaboration  — working together to expand the universe of users beyond the limits of these closed, proprietary systems, create an open marketplace for digital content, and enhance consumer privacy.

First, the open-marketplace technology would work with and expand the closed systems. It would allow news consumers to venture outside a publisher’s proprietary system, subscribe to or pay for digital content from any other source. At the same time, news consumers from other proprietary systems can travel, visit, view and acquiring content from remote services.  In either case, system capabilities allow tracking and payment to occur.

In short, the technology places in effect a hybrid closed/open system. Thus it provides unlimited audience and revenue growth potential for all participating information providers. Equally important, it makes it efficient for consumers to access news and information they choose – without boundaries and without multiple accounts or IDs.

Second, now please envision the business collaboration as an independent Information Trust Association. It would foster and enforce open protocols to allow registered users in closed systems to be recognized, selectively and privately use their credentials to transact with any other participating closed system.  The ITA would be a public-benefit organization with a global perspective and governance. It would not itself produce content or have consumers as customers. It would fostering technology that allows private networks to join, do business and compete. It would make and enforce marketplace rules respecting consumer privacy and choice.

A summit of major news, information and technology providers is necessary to embrace the ITA,  invoke needed technology and open the digital-content marketplace.

A key insight driving this vision is the the idea of the open “four-party” vs. closed “three-party” approach to information commerce.

It was in November, 1994 that we first began thinking about “the four-party model.”  We formed a small team to help find a solution to what we saw as a looming train wreck for newspapers. When “fat pipes” — high-speed Internet services — reached American homes, people would be able to easily go anywhere for vital information. The role of the physical aggregator, the print newspaper, would be diminished.

And so we began thinking: How could we develop a service that would allow news organizations to take on a new role referring their users to digital information from anywhere — and getting paid for doing so. Then-colleagues David Oliver and Michael Callahan worked with the author on a solution — which came to be called Clickshare.  The core idea was that news organization (or internet service providers, we thought), would become agents for consumers — similar to a real-estate broker who represents the buyer instead of the seller.

In days before the World Wide Web, information aggregators like Compuserve, AOL, Lexis-Nexis and others gathered information into their network and then sold it. Each was its own “silo” — you couldn’t move from one to the other without changing networks and logging on with a different ID.  That’s the way Apple’s iTunes store works today. They look like this:


In 1994, in the web information ecosystem, we expected there would be four parties — (1) the consumer end-user, (2) the vendor information provider (3) a neutral third-party who manages trust and transactions among all parties and (4) the consumer end-user’s agent. In this way, a user could have one account with a single must-trusted “Information Valet,”and that account would work at lots of other places — sort of like a credit card being presentable at stores worldwide. A good analogy is to Visa vs. American Express. Visa has no consumer accounts — it’s bank members do. Banks re the fourth party. All American Express cards have accounts at Amex — the third party. Like Apple and iTunes.

The big distinction is that a four-party model is a fully distributed network approach, while the Amex, Apple etc. three-party approach is not.  Content distribution and sales in a networked environment like the web should use an open, networked model in which any publisher can sell any content. In 1994, we thought a “four-party model” sustaining a trust ecosystem for information commerce would look like this:


What publishers and content creators gain is the ability for any content item to easily reach any consumer, with content fees and/or advertising revenue flowing back to content owners/originators.  This is possible by “sharing” users — via a “federated authentication”service.

In 1994, we figured the  “home base” was where the consumer had their account, and where personal demographic and personal interests data were stored — to be shared only with the user’s permission. Actually, newspapers were agents for the consumer in the old physical-delivery world. They licensed syndicated content and wire stories, added local news and commerce to create a useful information stew for communities.  We thought they should be given the technology to continue in that role in cyberspace.  But it didn’t exist. Because the information would have to be personalized and procured and resold by the agent in a nanosecond. And there would have to be an accounting system to track and settle all of those atomic content transactions.  Have you ever used a transponder on your car to pass through toll booths without stopping? You know how those “easy pass” systems now interoperate from state to state. Imagine the information ecosystem starting to look like this:


Now the Internet is a deep, wide place, and so its fairly likely that just one authentication and logging service (the transaction logger and trust/identity manager) isn’t going to be enough. That would put one entity — or one nation — in a role akin to Big Brother. So we envisioned a network with authentication and logging services that would “talk to each other” and exchange data — although not personally identifiable information. And if you became distrustful of one network’s authentication and logging service, you could quit it and sign up with a different network. So that ecosystem would look like this:


Perhaps Google would be one of the authentication and logging services. Facebook might run one. Microsoft another.  Amazon another. The banking industry, with its good friend IBM, might run another. Perhaps governments would each run one.  But the crucial challenge is to avoid going back to the “silo” days of AOL and Compuserve.   To use another physical analogy — we want your web identity to be a “passport” that gets you in and out of silos/networks with little hassle.  Virtual travel should be easy!

Virtual travel should be easy! No stopping at tollbooths and fumbling for money.  No need to present your credentials at a checkpoint.  All of that handled by your information valet,  transparently governed by rules made by an international public-benefit organization.

That’s why we need an Information Trust Association — a public-benefit organization with global perspective and governance — that can make and enforce protocols and business roles for being a part of the network.  Like Visa, it would register any consumer users itself. Think of it as designing the rules and playing field for football so that teams can then engage and the public can be entertained.

Or making a market for digital information.

For more about this idea, see: From Paper to Persona: Managing Information Overload and Sustaining Journalism in an Attention Age.

CONFLICT OF INTEREST DISCLOSURE