SERVICE AND BUSINESS MODEL FOR MOBILE APPLICATION SUPERNETWORKING

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1 SERVICE AND BUSINESS MODEL FOR MOBILE APPLICATION SUPERNETWORKING Timo Koskela, Kimmo Kuusipalo 1, Mika Ylianttila, Junzhao Sun MediaTeam Oulu Group, Department of Electrical Engineering, Erkki Koiso-Kanttilankatu 3, FIN University of Oulu, Finland 1 University of Oulu Faculty of Economics and Business Administration P.O. BOX 4600, University of Oulu ABSTRACT This paper examines service provisioning and business models for peer-to-peer technologies on mobile cell telephones. Service provisioning refers to providing the service, managing digital rights, licensing, billing and updating of the service. In other words, functionalities such as service discovery, service registration, service adaptation and service billing must be implemented for revenue-creating application super-networking scenarios. In addition, business aspects for these functionalities and defined application service scenarios must be considered along with the technology. These aspects are analysed and discussed in this paper with case examples. supported by the network to customers. To be as simple as possible provisioning can be divided into resource and service provisioning. In this paper we examine service provisioning only. Service provisioning covers aspects related to service discovery, service downloading, service registration, service adaptation and service billing. Also service selection and personalization can be included. Service model is closely related to business model as well. I. INTRODUCTION The first peer-to-peer (P2P) technologies emerged more than decade ago and during the recent years they have been developed and become increasingly popular among the users at home and at office all around the world. Functionalities such as service discovery, service registration, service adaptation and service billing must be implemented for revenue-creating application supernetworking scenarios [1]. Though P2P is often related to spreading illegal material, it is still very promising and important technology, which has opened a completely new field of possibilities. Technologies such as DRM (Digital Rights Management) have been developed to protect against the misuses [2]. The next giant step for P2P technologies will inevitably be the conquest of mobile networks. To speed up the development of mobile P2P, common framework, independent on any device, underlying network or system platform, is required. JXTA is an emerging technology for implementing P2P applications. It is a set of simple open peer-to-peer protocols that enable any device to communicate, collaborate and share resources. By using open technologies, service providers are able focus more on creating new services and developing their service provisioning methods than inventing - or re-inventing - P2P infrastructure [3]. The terms provisioning and service provisioning have to be first specified and defined. Provisioning refers to providing the necessary resources to the telecommunication network as well as providing services Figure 1. Mobile file sharing as provisioned service. In this paper the service and business model for application supernetworking in mobile P2P network is discussed. Especially, mobile file sharing scenario is considered, discussed in section 2. Service model is discussed in section 3, followed by detailed business analysis given in section 4. Discussion and analysis provides analytical information on the relations of technology and business for research and development of mobile P2P applications. Conclusions are given at the end. II. MOBILE PEER-TO-PEER SERVICE SCENARIO Next we will introduce one practical service scenario in order to visualize the vast possibilities provided by P2P. A. Service provisioning for mobile file sharing As illustrated in Fig.1., user A has a mobile cell phone equipped with a memory card and GPRS - connection. A has determined a folder containing files to be shared with his peer group. Mentioned group can consist e.g. of A's work colleagues or friends. Other users not included in the peer group have no access to those resources. Every time, when user A shares new files he can determine whether a notification message about the new content is sent to his peer group. User B, having a mobile cell phone with required capabilities, can make a query within the peer group in order to search for desired files or just to browse the shared contents of his/her peer group members.

2 This proposed service has value for the private users, but most of all for the enterprises. Urgent pieces of information for employees or project group members can be very easily shared wherever and whenever without contacting everyone personally. To improve the service, notification message can be parameterized with a priority number and message type identifier in order to describe the importance and type of the new downloadable files. B. Peer Group Management Term Peer-Group-Management (PGM) refers to operations related to creating, managing and terminating peer groups. Managing peer groups contains tasks such as definition of the characteristics and rules of a group, definition of the shared content and peer authentication. Instead of traditional password-based authentication, the possibility that a user could be identified simply by mobile phone numbers should be considered. In this case authentication would be carried out by the service system, while the definition of the shared content and group characteristics are performed by the users. That freedom also brings responsibilities, because e.g. copyrighted material shouldn t be delivered to any other than registered users. DRM technologies mentioned in the introduction can be used to protect certain files, folders or even the whole content available to a certain peer group. To illustrate the peer groups they could be categorised into four different sections. The first group, called personal peers, contains all P2P capable devices belonging to a single user. This group enables the user e.g. to synchronize the data between his/her different devices. The second group covers all communities containing family members or friends. Within these groups e.g. photos taken during the holiday trip could be easily shared. The third group, called enterprise peers, consists of work groups or leisure time sport groups. These groups act as a fast channel to deliver important material such as meeting agendas etc. The last group, public peers, highlights also the commercial side of our service scenario. This group is discussed more detailed in the next chapter. Before a peer group can start to function, it is necessary to determine who has the rights to invite new members, kick out the ones behaving inappropriately and modify the settings of the group. Should the user also be able to list all peers he/she is willing to give access to the shared files without belonging to a certain group or should the common group be created? Finally, where is the management of these peer groups situated? One possible way is provided by JXTA, where common peer groups are created by any peer and maintained by its rendezvous peer [1]. These peer groups can not be deleted, but are instead automatically terminated, when they become obsolete. III. SERVICE MODEL We are developing a service model (Fig. 2), which utilizes our service scenario in order to provide certain services or information e.g. about company's operation. Mentioned information can contain casual advertisements, short company presentations, special offers etc. An example of a service, in turn, could be a music store offering new downloadable hit songs. In addition to full versions, protected by DRM, short samples could be offered in order to contribute the buying process. To extend our service scenario to cover peers all around the world, we are coming closer to current situation in today's P2P networks. In that case many aspects of service and service provisioning have to be examined in-depth. The following section discusses some challenges service provisioning has to face in P2P mobile networks. Figure 2. Prototype service model. The basic requirements today for the services are easy installation and usability. Especially in the mobile world, services have to be able to adapt, without bothering the user, to different devices equipped with different platforms like mentioned in the introduction. The capabilities of different devices form a significant limitation, which have to be carefully examined. From the service provider's point of view services have to be simple and not too resource consuming to maintain. A. Service profile Before registering to the service or downloading the application enabling the service, the user should be shown a standardized service profile, which identifies the functionality and the features of the service [5]. Also at this point the user could be offered a chance to describe his/her computing skills e.g. by selecting a value from 1-3. This information could be taken into consideration during the installation and personalization process. B. Mobile and Licensing After the application enabling the service (or later on content) has been downloaded, licensing or registering is usually required. Licensing (or registering) process has to be straightforward and, if payments are included, secured. Control points where various functions related to billing, licensing etc. need consideration. Mobile world does have some special features and restrictions (differing from traditional Internet). First of all, heterogeneous terminals mean that achieving a critical mass of service users is challenging. Also network access done via mobile telecom means relatively high s. Rights management must be persuasive to encourage commercial content. Open Mobile Alliance (OMA) has released descriptions for enablers of usage rights (OMA DRM) that are currently being widely adopted. While OMA DRM v1.0 mainly implements forward-lock, OMA DRM v2.0 enables true content

3 superdistribution, for example file sharing of protected content. methods, too, are more restricted in mobile world. We have listed below current Internet and mobile payment methods where 1 to 3 are mostly used in Internet and 4 to 5 in mobile network. 1. Bank account payment 2. User account systems i.e. 3rd party prepaid virtual wallet 3. Credit card 4. Invoiced in the monthly mobile bill 5. Dual chip or one chip solution (SIM+WIM or SWIM) Wireless IP based services makes Internet payment methods (1-3) available for mobile devices. Still there remain some usability problems with them. For instance bank accounts and credit cards systems can not be used by person under age in many countries including Finland. Third party user account systems are a bit complicated when users initially need to money to be able to use credits for purchases. There have also been plans to install a separate money chip to mobile phones but they have not been progressed at the moment. Will monthly mobile bill invoice still be the most valid one then? So far it has been very popular at least with smaller payments. From content provider s point of view revenue sharing might bee a minor problem using telecom mobile bill invoice. For example in Finland high-priced s of telecom have not been incentive to provide services especially of micro-payment [6] size. There would obviously be a win-win situation in agreeing an every way satisfactory revenue sharing. C. Authentication Finding the best and the most flexible ways for authentication in the integrated mobile and fixed P2P environment need research work. Authentication and also billing at the mobile end might be carried out by exploiting SIM card properties. Also an interesting point of view to authentication process is to connect mobile phone numbers to peer groups. In that case authentication could be carried out automatically without bothering the user. D. Service personalization Theme service personalization discussed in [4] offers possibilities to create more flexible services satisfying the needs of different kind of customers. Service personalization should offer guidance and easy-to-use interface for inexperienced users and at same time possibilities for professional users to adjust the service features to correspond to their needs. In a nutshell service personalization gives a chance to modify the service to mirror its user. E. Security Security aspect has a wider role in mobile P2P networks than in the traditional ones, because the access to user resources on the phone and outside has to be more limited. Security and legislation must have means against the violation of privacy. Still, the main problems in the current P2P systems have been concentrated around the malicious peers delivering tampered material. In order to handle the problem with peers delivering files containing viruses and trojan horses, a reputation-based system has been suggested, where every resource and peer has been evaluated by plenty of users [7]. However, mobile and P2P security deserves more attention, as also the recently appeared first Symbian S60 virus illustrates. F. Privacy Considering privacy there are some open questions. At first we have to determine the parties who can access the licensing information. Secondly, who will control that such information can't be accessed without the permission and in the worst case misused against the user. It is also important to make sure that the user is able to block the service offers, temporarily or permanently. While these issues remain essential for building a fully functional and reliable service model, we move in the following to analyze the business implications of our model. IV. BUSINESS ANALYSIS While technology changes, economic laws do not. The forth-coming rich content mobile services will certainly be based on value chains; several companies produce different pieces in the service process with the help of joint standards. For instance the key technology vendors, mobile operators and the leading mobile content retailers are extremely well positioned to design a standardised commerce infrastructure. To find an extensive payment method and a comfortable digital rights management (DRM) are on top of the list. Royalty Fee for the content, Commission system and Rights management less financing Content and copyright A copy of content Subscription fee Data Content / licensing File Terminal File download Figure 3. Value chain, downloading mobile content In Fig. 3 first the content flows from content owner to end-user through several parties. flows back from end-user to content aggregator through a financing party less financing. Subsequently the content aggregator divides the rest of the revenue to parties involved according to agreements concluded. Also, if telecom network is used for file, end-user has to pay the tele-operator for s. End-user might be

4 needed to cover a subscription fee to the content aggregator for accessing a portal, too. With business models there is basically no need for new tricks: models and content successful in traditional digital world and Internet are a good starting point. A good example of this are the games that were successful in the early personal computing days (10-15 years ago) are now successfully red into mobile devices. Below are listed some primary business models. Sales (sales of goods, information or services) Transaction Fee (fees for executing a transaction) Subscription (fees in exchange for access to content or services) Advertising (fees from advertisers) Affiliate (fees for business referrals) The simplest case of a value chain would be that content flows directly from content retailer to customer. Actually this is how the service should be visible to end-users. The simple value chain must be disaggregated to see the parties involved in mobile service provisioning. First you need a service provider to hook up your terminal to network. Even the type of network connection may vary - WLAN, GPRS or UMTS for example. Before viewing the content, you need a system for secure identification and payment handling. Once located in the terminal, we face the problem of digital rights management again. May the content be copied? How many times or how long may it be viewed or executed? Can the content be forwarded or distributed via supernetworking? Will that and does one get for distribution back to payment handling again? How will the rights and payment management be handled, is it hard-coded by terminal manufacturer or is it done with a 3rd party software or with a middleware? increases network traffic nevertheless the file is shared via BlueTooth or radio network since telecom always gets transaction s for notifications and licensing/payment traffic. This happens especially with commercial content. Also supernetworking and superdistribution remind network marketing business where end-users store up, market, find the right target group and distribute the content. Lastly, rewarding is totally new business: if sharing commercial content, a content provider may give a reward or to the end-user that distributed the content. Content aggregator Content Telecom Music store Commercial Peer (3 rd party) Fee (fixed, transaction based or initial fee) P2P file GPRS Data less financing Terminal User (Private Peer) system and Rights management Terminals Licensing server Bluetooth (GPRS) / Licensing Figure 5. Value chain and peer relations in mobile file sharing case. As illustrated in Fig.5., User (Private Peer) has a mobile cell phone equipped with a memory card and both Bluetooth and GPRS connections. User s friend group s end-terminals are also provided with the same functionalities. In this business model example a music store (could be a national chain) is acting as an aggregator and offering services to customers via Commercial Peer, which is run by a telecom, who has access to mobile networks. Friend group Superdistribution PAYMENT / LICENSING System and DRM Commission less financing Content provider Reward Access provider transaction s END- USER download In this scenario and Rights management is carried out by a 3rd party in cooperation with the music store, but could also be handled by a telecom. Content owner and content provider are not mentioned, but they get their share from the content aggregator. Telecom, which possibly runs the Commercial Peer and certainly provides the network access, benefits from every GPRS and from the aggregator for offering the Commercial Peer functionalities. The 3rd party taking care of and Rights management gets a profit for each made by the customers. PEER GROUP Figure 4. Value chain for file sharing. As illustrated in Fig. 4, peer group networking and superdistribution brings new business compared to traditional file downloading. First of all, file sharing The Commercial Peer, run by a telecom and controlled by a music store, offers priced music material (mainly songs) protected by DRM. In order to use the services, User has opened an account protected by a password in the music store. Account is based on credits, which can be loaded by VISA electron, debit and credit cards, bank, cash etc. Because of the possibility of cash loading, younger people are also potential customers and able to benefit from the service.

5 User can connect to Commercial Peer anytime and anywhere, browse the content and download the files desired. After downloading e.g. music files, they have to be licensed and paid for. When the user opens the file for the first time, a payment agent connects her/him to a licensing server (like in the pc world), which carries out the whole licensing and payment operation as following: 1) User logs on by entering her/his account name and password. 2) User accepts the payment using her/his account credits or possibly e.g. a credit card if the account does not contain the sufficient amount of credits 3) User receives the license from the server and is able to use the content License is only valid in a single device and its properties can vary. Instead of unlimited ones, the use rights can be e.g. time or instance of use-limited. Naturally prices have to be set according to use rights. Now the User is a holder of nice music file, which she/he wishes to share with other users in her/his private peer group. Friend group s peers could use the mobile file to get the file from the User (Private Peer) or Commercial Peer, but the easiest, the fastest and the cheapest way would be to use Bluetooth. The use of short range equipment is based on an assumption that young people tend to see each other very often and spend a lot of time together in big groups. After User s friends have obtained the content, they also need to pay for it in order to acquire a license. In order to do that, they also have to have an account on the music store. According to affiliate business model, small s could be offered for users, who independently distribute the content to other users e.g. via GPRS or Bluetooth. This sharing process occurring without any intervention from the commercial parties is called superdistribution. In order to make file sharing more attractive and increase the value of this use case, mentioned s are needed. Commission could be paid every time, when a new user licenses the content acquired from another user. In that case it is required that the shared files are marked with some kind of stamp, which is checked and changed to point the new user during the licensing process. In a credit based system the for successful distribution event could be % of value of the content to be attractive. Commissions would be paid in credits and automatically added into user s account. If (distributive) users would get a for every file shared whether or not it was licensed, the would have to be much smaller. V. CONCLUSIONS This paper has examined service provisioning of peer-topeer technologies on mobile cell telephones. Functionalities such as service discovery, service downloading, service registration, service profile and service billing were discussed. In addition, business aspects for these functionalities and defined application service scenarios were discussed. Especially, scenario for mobile file sharing was considered. Value chain for content superdistribution was discussed as a case example. Case studies illustrated the new emerging potential of mobile P2P applications that has both technological and economical dimensions. Discussion and analysis provides analytical information on the relations of technology and business for research and development of mobile P2P applications. Future work includes experimentation of service model in a virtual operator test environment to analyse and develop the service and application life-cycle management. ACKNOWLEDGMENTS The acknowledgments are due to the project team of Application Supernetworking/All-IP project. The authors would like to thank TEKES, Nokia, Elektrobit, TeliaSonera, Serv-IT and IBM for supporting this project financially. REFERENCES [1] J. Ala-Kurikka, et. al, Empirical Aspects on Implementing Application Supernetworking, in the proceedings of NRS/FWCW conference 2004,Oulu, Finland, August, [2] F. Hartung; F. Ramme, Digital rights management and watermarking of multimedia content for m-commerce applications, IEEE Communications Magazine, Vol. 38, Issue: 11, Nov. 2000, pp [3] W. Yeager, J. Williams, Secure peer-to-peer networking: the JXTA example IT Professional, Vol. 4, Issue: 2, March-April 2002, pp [4] S. Panagiotakis, A. Alonistioti,, Intelligent service mediation for supporting advanced location and mobility-aware service provisioning in reconfigurable mobile networks, Wireless Communications, IEEE, Vol. 9, Issue: 5, Oct. 2002, pp [5] F. Shen, A. Clemm, Profile-based subscriber service provisioning, Network Operations and Management Symposium, NOMS IEEE/IFIP, April 2002, pp [6] B. Yang, H. Garcia-Molina, PPay: Micropayments for Peer-to-Peer Systems, CCS'03, 2003, October 2003, pp [7] E. Damiani, S. Paraboschi, et. al., A Reputation- Based Approach for Choosing Reliable Resources in Peer-to-Peer Networks, Proceedings of the 9th ACM conference on Computer and communications security, CCS2002, pp