This was my idea for how to make e-commerce work on the Internet.

1. Describe your invention, stating the problem solved (if appropriate), and indicating the advantages of using the invention.

Current distribution of digital content has a number of problems:

* Humans want something for nothing, and will go to great lengths (piracy, etc.) to avoid paying the provider of something to get it. Napster is a good example of this happening.

* Producers/owners of intellectual property want to be compensated for their offerings.

* "Content made flesh," the distribution of physical objects containing digital data (CDs, books, etc.) is an extremely inefficient process. With few exceptions, this distribution makes the person who listens once to the content on a CD pay the same amount as the person who listens to the content over and over.

* Advertising on the web is still searching for a way to be effective. There are signs that online advertising is not effective (banner ad click-through rates of 0.5%, down from 10%, etc.).

* Privacy concerns and/or regulation may impact advertising, profiling, and other ways a content provider generates revenue.

* Encrypting and distributing a product makes it likely that someone will find a way to break the encryption and distribute a 'cracked' version.

Inspiration:

Humans can only take in so much information in a 24-hour period.

Possible Solution:

Consider the act of reading a web page or viewing a streaming video as occurring between 4 logical entities: the consumer, the network/access provider, the host of the content, and the producer of the content. There may be more or fewer than 4 real entities involved.

One mechanism to address the above problems would be the following:

1) Consumer pays the network/access provider for network access and a number of simultaneous data streams. Ideally this would be a single flat monthly fee.

2) When the consumer connects to a host site and requests content, the network/access provider sends a payment to the host site, which then shares part of the payment with the producer of the content. (In the real world, the payment agreements and mechanisms may vary. There may be payment aggregation, for example.)

3) The first part of the content is downloaded to the consumer. It may be decrypted by the player of the content (which may have been downloaded with the content).

4) While the first part of the content is displayed (or playing), the next part of the content is being requested from the host. Another payment is sent along with the request.

5) This process repeats until the content has completely finished or the consumer stops accessing this content and exits the network or goes on to other content. By default, the content is not stored on the consumer's system. To access the content again, the consumer must make another connection and start the process again.

2. How does the invention solve the problem or achieve an advantage,(a description of "the invention", including figures inline as appropriate)?

1) Each time the content is accessed, it brings in revenue for the (logical) host and producer. A CD that is played a thousand times only brings in revenue once.

2) Besides the flat fee, a consumer does not pay anything more for the content, and the content is always available. There is no need to make a copy of a movie when the consumer can watch it any time he wants, and he only has so many hours in the day in which to watch it.

3) This model provides an alternative to the advertising-based content delivery model, and directly rewards popular content. It also makes viewing most content a commercial activity, likely making people who make available pirated material subject to harsher penalties than they are currently.

These three benefits help encourage the producers to make content available on the network. Use of content "time to live" and encryption (see below) would further protect the producer and the consumer.

Variations

1) Encryption -- encryption can enable protection of content and anonymous viewing of content. Encrypting content on the fly and sending it to the requester can protect content. The encryption and the player that decrypts it can be updated if the existing encryption is cracked. This avoids the situation faced by DVD producers, where existing players make it hard to replace the compromised encryption. Anonymous viewing can be preserved by the consumer making the request through a service such as Zero Knowledge that will establish an encrypted channel back to the consumer, and will then make requests on his behalf.

2) Advertising-based "free" network/access providers -- this model is still possible. Advertisers may prefer to place ads with these companies as they have the complete picture of the consumer's online interests.

3) Content fan-out -- hosts of popular content are currently subject to being overwhelmed when a large number of consumers visit. Hosts could enter into contingency agreements with hosting providers such as Akamai to host content in exchange for part of the revenues.

4) Content TTL -- a consideration with this model is the desire to store content for later access when the network is not available. Content could be rented for access for an extended period of time (hours, days, etc.) priced on a sliding scale or some other way. The content and a number of keys could then be downloaded to the consumer's system. The content player could refuse to recognize the keys after the period for which they are valid. The content player itself could be programmed to periodically stop working (perhaps it lives for only a month) at which point a new player must be downloaded. This would help stem the damage of any breaks in the encryption (the new player could have a completely different encryption mechanism).

5) Payment systems -- much like credit cards are handled today, the payments under this system could go through a third party which provides some value to the network/access provider and the host. There could even be a way to tie payment types to age, to prevent access to content inappropriate for children. Their payment would not be accepted and the material would not be downloaded to them.

6) Not sure if an effective method can be made to implement this, but the content could be set to only play on the "destination" system (either the user's system performing the downloading, or a portable device connected through the user's system). This would help limit the potential for one user buying the content and sharing it with other systems.

3. If the same advantage or problem has been identified by others, how have those others solved it and does your solution differ and why is it better?

This problem has been identified by others and currently a hot topic of debate. On one side you have content owners/producers. On the other, the consumer.

Some solutions which have been put forward/tried:

IBM Cryptolopes: A cryptographic envelope around content controlling its use. I do not know if this has ever appeared in a product, but it may part of a viable way to implement this business model.

DVD encryption: By 'locking in' a single encryption mechanism the producers left a security hole in their copyright protection mechanism. The payment for a DVD is also not tied to the number of times it will be watched.

Micropayments: Any payment mechanism where the consumer must conciously choose to spend the money has the same problems as all existing systems: consumers will try get the content without paying. Concious payment may also produce a sense of ownership of the content by the consumer, which may lead him to feel he can "rightfully" distribute it at his discretion.

The nearest equivalent to my solution is the cable TV method of billing. You pay the same rate if you leave HBO on 24 hours a day as you would if you never turned on the TV.

The additional benefits of my system:

1) The human urge to "beat the system" and get something for nothing is circumvented -- if someone can access any song he wants any time he wants, why spend time and money trying to download music and burn CDs to do the exact same thing?

2) Popular content is directly rewarded -- the payment is automatic. Content providers do not need to rely on advertisers, sponsors, etc. Content is also paid for each time it is accessed. If it at least pays for its online hosting, there is a strong incentive to keep it online in case it becomes popular again.

3) By making content viewing by default a transaction, there may be additional legal avenues available for content producers whose content is pirated and placed online.

4) By allowing the encryption to be updated, it can avoid the problem DVD producers face.