Karl Hirsch is the CEO of Protexis (Protexis.com), a company that links retail outlets with companies wanting to sell digital content such as software, music, video, e-books and other digital products.
PeC: What does Protexis do?
Hirsch: We help publishers of digital content sell and fulfill content through established online channels, typically online retailers.
PeC: Is this technology something new?
Hirsch: The technology is not new, but the electronic distribution model and opportunity for retailers and publishers is new. Electronic software distribution has been around for nearly a decade now, but it has largely been used as a way to sell direct to consumers — not through established online retailers. So what Protexis does is connect publishers with merchants and then help those publishers reach more consumers in a more efficient and open way.
PeC: How does the system work?
Hirsch: A publisher of digital content would come to our hosted service through a web interface. He would upload his content, and input necessary merchandising information, with a very simple, secure process. After reviewing the various opportunities with the retail channels and the revenue share associated with those retail channels, the publisher would choose where and how to make his content available through the channel of choice.
PeC: Does the creator ever lose any kind of ownership of the product when using Protexis?
Hirsch: The publisher retains all ownership and administration capability of that content.
PeC: What do publishers pay to use your service?
Hirsch: We have a transaction-based revenue model. Publishers do not pay us anything. They choose their sales channels and those channels have a revenue share associated with them. Let us say a retailer, hypothetically, has a 25 percent margin. The publisher would choose to either make his software available to that outlet or not. When that retailer makes one sale, the publisher would know that the retailer gets 25 percent of that. That retailer pays us a
PeC: Will customers who find a publisher’s product at, for example, TigerDirect or other retailers have to checkout at Protexis?
Hirsch: The checkout and the purchase will be made with the retailer’s shopping cart. We just seamlessly integrate that digital inventory so retailers can merchandise and sell in their own expert way. Previously, the only alternative has required a third-party ecommerce provider to “take over” the shopping cart, resulting in the unnecessary sharing of customer information and leading to an increase in cart abandonment rates.
PeC: Will this alter any digital rights management system a publisher has in place?
Hirsch: Publishers of content can preserve the licensing models they currently have.
PeC: What is the benefit for consumers?
Hirsch: Consumers respond very well to immediacy. When I go to a small merchant that has the digital content I want, and it is available right then and there — versus another retailer that does not have it immediately available but would ship it — I would choose the former.