Magex and Digital Rights Management Cross the Pond
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Magex and Digital Rights Management Cross the Pond

A British banker partnered with a long-haired heavy metal rock star seems more like a bad remake of the Odd Couple than the makings for a successful business. But in this age of digital music and distribution, it is the perfect combination.

Paul Holmes

 

A British banker partnered with a long-haired heavy metal rock star seems more like a bad remake of the Odd Couple than the makings for a successful business.  But in this age of digital music and distribution, it is the perfect combination. 

In 2000, digital music exploded onto the front page of society, both in America and abroad as the ongoing debate over peer-to-peer (P2P) sharing systems such as Napster dominated headlines. Napster supporters felt they had a right to share digital music while musicians are left holding the bag.  Record companies argue that it’s wholesale theft. 

Enter Magex -- a spin-off company of the 250 year-old British financial institution NatWest Bank.  Developed to prevent the illegal distribution of intellectual property over the Internet, Magex technology – or, digital rights management (DRM) technology - allows consumers to pay safely and instantly for digital content purchased via an electronic “wallet” - a Magex software application resident on the user’s PC.  

As an emerging technology, DRM would need to be positioned as a solution to controlling content distribution in the online marketplace without alienating the consumer’s interests in downloading digital music. Understandably then, Magex’s timing in entering the market was critical, forcing a communications program to be compelling, balanced and bulletproof given the hot debate monopolizing the media.

MISSION IMPOSSIBLE: OBSTACLES AND CHALLENGES

Magex came to Ruder Finn in September of 1999 asking for a comprehensive U.S-based public relations program.  Looking for a program that would both introduce Magex to the United States as a leader in the industry and educate the public on digital rights management, the company had to first overcome a few temporary obstacles: no available product, no U.S staff and no U.S news. 

Naturally, Ruder Finn accepted the mission and replied “no problem.”

RESEARCH AND PLANNING

Ruder Finn gathered analyst research reports, consumer surveys and conducted one-on-one interviews with top analysts, such as Aram Sinnreich from Jupiter Communications, to determine which market would be the first to be threatened by issues surrounding online piracy.  With the onset of the Napster and survey results pointing to a dramatic increase in the number of music downloads among the US college population, Ruder Finn quickly decided to use Napster as a vehicle for the campaign’s message – by offering Magex as the unobtrusive but legal alternative to piracy.

CAMPAIGN OBJECTIVES

  • Build the Magex brand within the United States
  • Build a leadership position for Magex among key content providers
  • Educate the market on digital commerce and the importance of DRM

STRATEGIES

  • Construct media outreach around current industry issues and debates
  • Identify and challenge an obvious competitor to highlight the technological advantages of Magex
  • Conduct comprehensive outreach and research with top influencers in industry

EXECUTION

Communicating Magex’s relevance to both a business-to-business and business-to-consumer technology audience would have required a great deal of audience sophistication if it had not been for Napster.  Napster, and the revolution of peer-to-peer file sharing technology, sparked a firestorm not only within the music industry, but also within the publishing and video industries.  Within a short time frame of a few months, Napster created a debate that not only involved consumers, musicians and the record labels, but also – and perhaps more importantly – it sparked a legal battle that would ultimately question the viability and validity of the Internet as a free distribution channel.

Ruder Finn built “Rapid Action Teams” (RATS) of account executives dedicated to tracking and responding to daily news coverage surrounding the Napster debate.  Articles obtained were used to formulate a Magex viewpoint, thus positioning company officials as ‘experts’ on that topic and securing a voice for Magex in the DRM arena. 

The construction of a yearly calendar of appropriate speaking opportunities that supported Magex’s vision for Digital Rights Management ensured the Company a presence in U.S.-based industry shows and exhibitions – thus helping to eliminate the issue of having no US-based full-time staff.  This tactic proved critical to positioning Magex alongside its emerging competitors and securing mindshare ahead of its product introduction and formal entry in the North American marketplace.

Ruder Finn and Magex commissioned a survey of consumer predictions and buying behaviors of Internet users.  Results were used to drive proactive media and analyst relations, thus, positioning Magex as a thought leader shaping an important emerging industry’s needs.

Ruder Finn created and organized a company-owned roundtable discussion – the Magex Circle - to address issues in the digital publishing industry.  The selection of appropriate, high-profile panelists added credibility and perspective to the issue, generating greater interest and awareness of the importance of DRM. 

In the absence of a solid product to announce, RF leveraged key partnerships, corporate growth and financial funding milestones to craft announcements and drive media for Magex.  

RESULTS

A recently conducted quarterly media audit has found that Magex continues to be at the forefront of the DRM industry.  The Magex brand has risen above the noise in the digital commerce marketplace and is consistently mentioned as a leader in this field.  Moreover, the business of DRM has become firmly entrenched in the business and trade media as a feasible solution to content providers seeking d-commerce revenue streams for the content they own and distribute.  

Specific results include:

  • Significant coverage in top tier and trade publications surrounding Magex’s first round of funding including Wall Street Journal Interactive, Red Herring, Industry Standard, Billboard, Reuters, Dow Jones and Bloomberg
  • Significant coverage in top tier and trade publications surrounding the Napster debates and specific Magex announcements including its first round of funding, move to the United States and CEO appointment
  • Panel participation at key conferences such as South by Southwest, Jupiter’s Plug-In and New York Music and Internet Expo
  • Hosted “Magex Circle” focused on digital publishing with 35 + attendees and panelists from Jupiter, Business Week Online, internet.com, and Editor and Publisher
  • Drafted and submitted for publication byline articles in relevant film and publishing industry publications
Wrote and released a White Paper on the future of digital payment, specific to the publishing industry
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