Frontier Exclusive Leadership Interview for hardware, software, system related business and and academia



Interview with Stefan Roever, Navio CEO

Frontier Journal(FJ): Every startup has a story, what's Navio's story in brief? Stefan Roever (SR): As you know, the Web dramatically lowered the bar for publishing information -- everyone surfs the web and anyone can publish - from blogs to wikis to Web sites. Publishing is now distributed, simple, and accessible to all. Yet the commerce of digital products is still fundamentally complex and centralized even though there are millions of informational sites out there. I started Navio to make digital commerce just as easy and ubiquitous as web publishing so that commerce can occur anywhere, by anyone, at any time. It's what I call "commerce at the edges of the network." Navio's new approach to "direct-to-consumer" content distribution provides content owners with far greater flexibility, distribution, and control, while making digital rights consumer friendly. With Navio, consumers can buy "at the edges of the network," not just at centralized destination sites, and receive greater value through new rights such as content redelivery. By the way, this is how commerce happens in the physical world. Consumers can buy newspapers at their local coffee shop when getting a latte. No need to drive to New York to get the New York Times. You can buy a CD at a concert. Or you can get a bestseller when waiting for your plane at the terminal. Making this happen online requires a different transaction model - a "rights-based" model. FJ: What are Navio's industry advantages and core competencies as a "rights-based" digital commerce solutions provider who enables legal file sharing and innovative, far-reaching content distribution?

SR: Navio's fundamental advantage is our underlying "rights-based" transaction model, which separates the "rights" to content from the file itself and bases transactions on an exchange of those rights. Because rights are far easier to manage than physical files, they can be created, acquired, stored, traded, transferred, and redeemed. This provides more flexibility around the bundling and distribution of content and provides a measure of device independence (web or mobile). With this model, content owners can set their own pricing, merchandise the way they want, bundle diverse types of content together from different content sources, and define the usage rights around their content (such as how many times consumers can download, to what devices, etc). A real-world example of this is the ability for an entertainment company to create a "movie pack" or "fan pack" which could include a video, ringtone, theatre tickets, and even a t-shirt for a new film release, all in a single transaction. And consumers gain value too through "rights" -- such as the ability to redeliver content to a new device. Another important aspect is our digital locker concept. Basically we connect sellers of content with sites and consumers via a digital locker. Consumers gain access to a digital home where they can store purchased media "rights" and receipts for their content collection. And content owners gain a 1:1 marketing relationship with consumers through the digital home.

FJ: Could you elaborate on Navio's key strategies and tactics in exploring the emerging "rights-based" digital commerce market? How do you position Navio in this emerging market?

SR: Navio is currently delivering solutions to the media & entertainment, music, and advertising & promotions sectors: * Music companies - who need to package, sell and securely distribute albums, unreleased music tracks, videos and more, while increasing product margins. Record labels, artists, and music resellers want to enable consumers to purchase content the way they want - by the ring tone, by the track, by the album, or by the artist bundle, regardless of content location. They want to sell digital music to music lovers wherever they are - online through digital music stores and fan sites, on-the-go through mobile devices, over authorized peer-to-peer networks, or retail point-of-sale. * Media and entertainment companies - who want to distribute, track, manage, and protect rich media content, such as movie titles, videos, syndicated TV programming, and games, and also make it easy for their retailers and resellers to do the same. They want the ability to create custom bundles with diverse content from multiple sources while providing a common brand experience. They want to distribute content "in-venue" - at the theatre, concert or sporting event, over the web, or to a mobile phone. * Consumer brands and the promotional agencies that serve them - who want to use digital content as incentives and rewards for customer acquisition, customer loyalty, and product testing and usage. They need access to content and turnkey service solutions, and Navio is in the perfect position to help broker these relationships and provide the transaction support and services. Under threat from piracy, the content owners have vast amounts of archived content, want to take advantage of the digital revolution, and are seeking ways to gain more distribution reach while maintaining control of their content. Though there are a number of vendors that deliver point solutions such as mobile marketing or payment systems, Navio is in the unique position of being a full service commerce provider, a key requirement for many of our customers in this space.

FJ: May we have some detailed information of your rights-based AV Commerce service, its value, differentiation, scalability and stickiness? E.g., What are their targeted applications? What is the enabling technology? Who are your reference customers (if any)? Do you have strategic partnerships? Are there any regulation issues involved? Do you offer technology licensing to third parties?

SR: Navio provides "rights-based" commerce solutions through AV Commerce (tm) -- a secure, world-class digital commerce platform and transaction engine. Navio is building a number of solutions on top of this powerful platform to serve a range of markets and needs. Our initial application solution is direct-to-consumer content distribution through any connected mobile or web device, which includes a suite of five services: 1. AV Catalog offers flexible content management services to manage diverse digital content with control over content use, rights and pricing, and support for mixed-media bundling. 2. AV Store creates web and mobile venues to sell direct-to-consumer from massive content portals to themed storefronts and one-time content redemption sites. 3. AV Edge enables powerful promotional marketing campaigns such as PIN-based campaigns, "Try/Buy" campaigns, or mobile marketing campaigns to reach consumers in context and at venues where real-time transaction can occur. 4. AV Deliver provides secure, reliable delivery of any digital content to any device with multiple format and device support. 5. AV Home is a "digital locker" where consumers can access the rights to the authorized version of their digital goods from any connected device, and can access their stored currency such as digital cash or loyalty points. As a powerful marketing platform, Navio enables music, media, and entertainment companies to easily catalog and distribute content via any consumer touch point - from Web sites to blogs and mobile devices or even "in-venue" at concerts or sporting events. Downloadable music, games, video, mobile content and more can be easily and flexibly bundled, priced, merchandised, and distributed through our virtual fulfillment network. And content owners can uniquely maintain direct consumer access through a users' digital home, providing an ongoing commerce relationship for add-ons, up-sells and promotions. We are the only service provider that enables content owners to merchandise rights along with the digital content they are selling. The Navio solution is delivered in a modular, ASP model. For example, we can provide a complete turnkey solution including building and maintaining a content product catalog, building a transaction-enabled web-based storefront, and delivering mobile and music/video content - or alternatively, we can transaction-enable a customer's existing storefront. Our products are based on a patent-pending technology called "Rights-over-IP (RoIP)" which facilitates the rights management process through the issuance and circulation of unique digital tokens. We have commercially implemented this technology through a Digital Commerce Engine (DCE), which handles selling and marketing content via disparate networks, including identity management, content packaging, payment and promotions. Transactional support is handled by Navio's powerful core underlying technology, known as Title Transaction System (TTS). A set of configuration tools and services reside on top of this core technology to handle other aspects of content distribution, ranging from content ingestion to storefront creation and management. We also provide a web-services interface to the DCE, which allows enterprise customers to develop their own customized solutions. Navio works with some of the largest brands in the music and entertainment markets. Recently, Atom Entertainment's Shockwave.com enabled their mobile storefront with our AV Commerce. Additional customers include Fox Music, Fox Sports, TVT Records. We have strategic partnerships with companies such as air2web, mBlox, Telescope, and Mobilitec.

FJ: Could you introduce your start-up team to our readers a little bit?

SR: We have a top-notch team on board. Ray Schaaf, our chief operating officer, has extensive experience in mobile, wireless gaming, ecommerce, security, and digital content technologies. He joins Navio from Glu Mobile, developer of mobile entertainment, and develops key strategic relationships with customers and partners. Kevin Collins is the chief technology officer and a leader in security and wireless technologies as well as architecting and implementing complex, highly secure and distributed systems. Ben Sharma is vice president of commerce services and operations, with over 18 years of experience engineering and operating secure, large-scale portals, web content delivery networks, and application service provider (ASP)-based solutions. Tammy Artim has extensive experience in mobile, gaming, e-commerce, and digital content for companies like Blaze/Kayak and Sorrent/Glu Mobile, and she runs our engineering and product groups. Julie Shenkman, who runs our marketing group, has deep marketing expertise of service-based products in both enterprise and consumer markets, having worked for companies such as the portal Snap.com, internet media company NBC Internet, Softbank, and NeXT Computers.

FJ: Navio was named a Red Herring 100 Winner, which is quite impressive, why did Navio surpass others to be listed in the Top 100?

SR: Our rights-based technology, the result of four years of development around the concept of "Rights over IP" (RoIP), is considered to be a powerful disruptive technology, and one which is changing the future of digital commerce.

FJ: What are Navio's Strength, Weakness, Opportunities and Threats (SWOT)? Regarding Opportunities, what are the biggest emerging opportunities for Navio?

SR: Navio's key strength is offering a full service commerce solution for content owners and publishers, supporting digital transactions from start to finish. In addition, Navio acts as a powerful marketing platform to reach consumers wherever they are on the web and mobile internet. Downloadable music, games, video, mobile content and more can be easily and flexibly bundled, priced, merchandised, and distributed through our virtual fulfillment network, to digital music stores and fan sites, on-the-go through mobile devices, over authorized peer-to-peer networks, or at retail point-of-sale. And content owners can uniquely maintain direct consumer access through a users' digital home, providing an ongoing commerce relationship for add-ons, up-sells, and promotions. Navio is the only service provider that enables content owners to merchandise rights along with the digital content they are selling. Because of our rights-based model, ecommerce can become decentralized, transforming every customer interaction into an opportunity for a transaction. This creates endless opportunities - consumers are voraciously adopting digital content as a new medium, and content owners are in a race to bring their digital assets to consumers. Both the digital and mobile content markets are growing at a breakneck pace. Navio's biggest weakness and threat is that, as a platform, we have the ability to deliver many different application solutions. Pacing ourselves to the market opportunity and our own resources is always an ongoing challenge.

FJ: Do you envision any Strategic Inflection Point (SIP) in your business within your targeted market? If yes, how do you cope with that, I mean before it happens and after it happens?

SR: Yes, a key SIP is gaining mass around the volume of available content through our service and the syndicated rights to distribute that content. The issues here are not just technologic in nature - there are also licensing and rights issues by the content owners. As we tackle these issues, the choices explode because of our rights-based model and the ability to broker relationships between various content owners and consumers of content. For example, imagine the synergies between content companies who are selling digital goods to consumers and financial institutions who are recruiting consumers to use their payment instruments and can use content as an added incentive. Imagine the synergies between big brands with multi-million dollar marketing budgets and content owners who can provide digital promotional campaign incentives - "test drive this car and get five music downloads". We have the interoperable transaction platform that can deliver this. We have recently encountered this SIP and are now seeing opportunities escalate rapidly.

FJ: You successfully brought your prev. startup going public, both in German stock market and NASDAQ, what are the "signal" and "noise" in your currently targeted market? Any IPO plan for Navio in mind so far?

SR: This is certainly a possibility in the future, and we will look at the public market when the opportunity and timing are right for Navio.

FJ: What else would you like to bring our readers' attention?

SR: It is our belief that "rights-based commerce" will rapidly become the prevailing standard for digital commerce, ultimately becoming the transaction layer for commerce on the web.


Back to Home Page