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Q&A: Mike Harris, Digital Asset Management, EDS

Last April, Electronic Data Systems launched a new digital asset management practice within its media and entertainment group, officially pitting the computer services giant against systems vendors and outsourcing rivals IBM and HP . In the exploding world of digital media, asset management is the buzzword for IT providers large and small, each chasing a piece of the possibilities that grow with each duplicated slice of digital media.

The move makes sense for EDS. While the last few years have brought shrinking IT budgets, the company has had to cope with mega-outsourcing contracts that have become major headaches, such as a delayed $6.9 billion contract with the U.S. Navy and bankruptcies of major clients WorldCom and US Airways.

internetnews.com recently spoke with Mike Harris, who heads up EDS's global media & entertainment industry group, about how the company is positioning itself for a piece of the action with digital media asset management, and how it plans to differentiate itself from rivals.

Q: What's behind the launch of the digital asset management group and how do you define the market?

This is a market that analysts are projecting, just for the solutions to help manage digital media assets, at between $5 billion and $8 billion annually. That's just in developing the solutions. So it's a pretty substantial market in which we expect a 30 percent compound annual growth rate.

But what is interesting to EDS, based on our core competency, is that there is a pretty substantial market that is being defined around both outsourcing for [digital asset management], such as data centers, and servers, particularly around the management of asset repositories, and the whole settlement process for rights management.

So we think of it as third-party clearing, but also first making it accessible, helping to decide who's using the assets and how they are using them. And then in settlement, so that people are paying for what they are consuming, as well as paying residual rights to the artists and [other entities] involved.

We feel very well-positioned to help [address] concerns of content providers: whether they have control over their assets, that they are confident they can assure their talent that they do.

We're very excited about developing and deploying [these] kinds of solutions, running not only the technology involved but also the business processes involved too.

We process some 13 billion transactions a day, so we feel we are very well positioned for this. Beyond media and entertainment companies, we see opportunities with financial services, with the government and military sectors.

Q: Can you provide a scenario of what type of company might be involved and what kind of services EDS would provide?

It would be in three categories, starting with management consulting services to help clients conceptualize and figure out the business case for storing, accessing and protecting their digital assets. You have to help them figure out their business case, how to build the architecture involved with managing the assets, and how to organize business units around a film and film rights, for example.

Second, in a broad category, we also would be developing and delivering solutions that will help [clients] manage the value chain.

[And third], we would manage or help manage the IT infrastructure, which yes, could include managing a client's server farm. But it might also come back to thinking through what do you have to have, real-time [storage] access vs. offline. That's where we can provide end-to-end management of every aspect of the process. We can design it, or help customers design it and manage [these systems].

This is primarily about offering a solution set from existing capabilities that help media and entertainment industry clients not only reduce digital storage and transport costs, but also improve their operational efficiencies, streamline collaboration efforts, and improve speed to market for new and repackaged offerings.

We find that what's lacking [for many media companies now] is the integration of those assets, such as solutions for logging an analog form of film and then digitizing it, creating a form so that I can, say, search and retrieve portions of that film. We'll help with good solutions for logging and indexing, for building repositories for that, but what's lacking is an integration of those solutions in a clients' enterprise.

Q: Can you talk more about the integration aspect involving digital media?

Sure. This might involve working with an entertainment company with film clips and stills that they use for licensing. So, let's say the company has implemented a solution for building a repository for those assets. Now, what we're doing is helping the client figure out how to use a [software integration platform company] webMethods in order to tap into different sets of asset repositories. We want to help them use those search tools with taxonomies built for searching film clips, for example.

It also means working integrating processes from the original content creation, all the way to [the process of] making it accessible, viewing it, repurposing it, how to integrate those business process, but how to look at opportunities for leveraging the content. There are various business processes that are key to creating an end-to-end solution.

Q: What are you hearing from customers about how to approach their digital assets? Is it how to bill for those bits and bytes, perhaps?

Frankly, what I hear, especially with prospective clients, is a lot less concern around billing for distribution and consumption. Their biggest concern is on the intellectual property side -- tracking the content and understanding what rights they have for its use, even within their own four walls.

That is among their biggest concerns: that they understand their rights, and, as things get developed, that they've worked out the appropriate settlement on that content. If a company's talent ever feels they weren't getting [their fair share of] royalties, that causes major problems in keeping talent. So that is the biggest concern.

The IP rights issues come in two forms: rights around access and use and rights around settlement back to the original content owners because right now there isn't a very good solution for most media and entertainment companies. It is a different prospect and approach -- content vs. IP -- for many parts of their business, in many cases, for good reason.

For example, now a company's got a contract around a post-theater release, which involves using content to create interactive games, or leveraging the Internet to provide access to the content as part of some tie-in, or maybe it's targeting kids in a McDonald's promotion.

You have to restructure contracts. And that's where very general contracts become complex, when the content comes in forms that maybe they haven't considered today. With the original content, who owns the right to segment that original product? That's the part in business models and business issues that needs to be addressed. It's about rethinking different parts of the business.

Most [media] organizations are focused on physical asset management, primarily driven by libraries that were concerned for example about film disintegration. Now they're getting digital repositories built, they are at the stage of saying 'how do you really monetize these assets beyond the form they are in today?' There are whole new ways of creating products and services, and ways to go to market.

So, they have started bumping up against each other, the copyright protection as well as how do they start thinking from the outset of the original contract. If you think of how a film starts, from the initial concept then to a story, the licensing typically follows DVD and VHS and other windows of release after theaters.

You can look at new examples like [video on demand site] movielink and see how the [studios] are trying to get ahead of what happened in the music industry with Napster. They know they have to get ahead of [digital media], but are thinking through how business models need to change, and how contractual models need to change. It's not just technology, but business issues involved.