New Direction, Funding For Digital Goods

Scott Griffith, chairman and CEO of Digital Goods (formerly known as Softlock.com), announced that the company has received $7 million in new funding. He spoke with PW about the company's new name, its new alliance with Reciprocal (News, Dec. 4) and a shift in the focus of its business operations.

Griffith said that in addition to its new name, the company is "moving away from being a security and digital rights management" provider and looking to offer publishers a complete suite of services that include digital marketing, retailing and copyright security. The company is also prepared to handle all manner of content, from straight text to music, video and audiobooks. Griffith said the previously announced revenue-sharing alliance with Reciprocal "is a one-year deal that we expect to renew."

"Long-term," Griffith said, "the Softlock name was limiting, and we decided on a name that would give us a larger umbrella brand." The larger umbrella, said Griffith, means the company is offering a variety of tools and alliances--in addition to security and DRM--to help publishers market and distribute content digitally. "We want to take the content to readers, to leverage the intent of the Web, rather than drive traffic to portals," said Griffith. Digital Goods is looking to superdistribution, or viral marketing--the ability of Web consumers to pass digital content quickly to their friends--and developing new digital tools and alliances.

He also pointed to the controversial downside of superdistribution: the rise of peer-to-peer file-sharing (e.g., the Napster model), explaining, "peer-to-peer is really a marketing tool, not a complete business model like Napster is attempting. We've learned a lot when people pass stuff along. It's part of our system."

Digital Goods presents an expanded network of Web affiliates that can display digital content for sale; it offers Passalong, a patented viral marketing system that allows content to be forwarded while retaining security encryption; it provides a system that uses metadata to list content at all relevant search engines and contextual mapping, which allows consumers to both view content and receive targeted offers for related content. The company's alliance with DRM specialist Reciprocal gives Digital Goods "a better DRM product. We can offer systems from both companies to our customers," Griffith noted.