Michael Moon Interview, continuedBy CIOinsight | Posted 05-28-2003
Web Extra: Digital Asset Management - Making the Most of What You've Got
Digital asset management isn't just for media and entertainment companies anymore. Now, companies from finance to pharmaceuticals are getting in on the act. CIO Insight Reporter Debra D'Agostino spoke recently to Michael Moon, president and founder of GISTICS, an independent research firm that tracks digital asset management use, about the trend.
CIO Insight: Can you give us a quick definition of DAM?
Moon: Digital asset management is an IT-based practice for the systematic reuse and re-expression of pre-existing digital objects that, when successfully done, accelerates business processes and time to market deliverables. That's the formal definition.
What defines an asset?
Any digital object that follows generally accepted accounting practice for asset recognition. So if you have any kind of digital object that you can show that you have reused for a period of greater than 18 months; have captured the development expenses associated with that particular object; and can directly link the reuse of that object to a discrete sale for a revenue event or a discrete cost savings; and have taken prudent measures to protect this asset, then generally accepted accounting practices will support you recognizing that as a financial asset on the balance sheet.
Why is digital asset management becoming so popular now?
Well, as we have recovered from the dot-com thing, as George Bush has successfully positioned fear as the organizing principle for We the People, eroding consumer confidence to its lowest level in 10 years, and then consumer confidence being the principal driver for economic growth in a consumption-based economy such as America's, then the war in Iraq and all this kind of hoo-haexcuse my politicsthe net-net of is it that we have been in a long-term economic downturn, and companies are not making investments, and consumers are not spending lots of money. This has forced many companies, even those with strong products and newly revved product cycles and so on, to say, 'Well, we can't sell our way out of this process.' What we have to do is economize. And so this basically has led to really thorough, systematic, ongoing, rigorous cost-cutting measures, understanding that the real costs are in fixed costs.
So now people are saying, 'Okay, how do we get further economies?' Well, people are finally discovering, as a function of the middleware, their ability to take broad data out of production data systems and databases, and dynamically create pages on the fly, have them be nice and pretty and template-driven and all that kind of stuff. So the portal people and the middleware people and the enterprise application integration people have started to produce cost there. Digital asset management, when in practice, significantly reduces the cost of doing multichannel business.
Explain how DAM works.
It's a specialized database for collecting, managing and distributing rich media assets, as well as automating many otherwise expensive, labor-intensive tasks associated with reusing or repurposing pre-existing content.
What about all this resizing and saving to different formats?
That's dynamic rendering and dynamic imaging. That's one of the tasks that gets automated. It's a pretty standard function. But the most standard function of DAM is search and retrieval and review.
Michael Moon Interview, continued
Walk me through the life of an asset.
It's saved in a specialized database. A digital asset represents a rich media file explicitly developed for reuse. So it often has structured layers and lots of data. Final form means I have thrown away all the data that I don't need for this one particular function.
A picture will start probably as an image in a high-resolution camera or a scanned image. So now it's digitized. Those are the raw image files, which contain lots and lots of data. Someone will take this raw file and pull it into some sort of an editing program. And when they pull it into a program like Photoshop, a certain amount of data gets lost, which is okay. Now, usually in Photoshop they will do all sorts of editing, color correcting, digital cosmetics, basically sweetening the photograph. If you're a car company, you will easily pay a photographer $50,000 for one of these shots. Then you usually spend another $8,000 to $10,000 to sweeten the photo. At that point you have a color-corrected, sweetened master shot. This will be a Photoshop file or a .TIF, often referred to as a vector graphic file, so it can be edited.
Often times what people do with this file is create layers and do color separations on these for four-color printing or a special layer just for text. At that point someone says 'I want to take this master shot and I want to use it in this poster,' or this magazine or whatever. A graphic imaging specialist will export a precise rendition of the master photo, which will have all the parameters of the original. Then, especially if it's going into a Web site, usually it gets ripped, which is to say it gets flattened, so all the layers that used to be there are put into one layer. That eliminates lots of extraneous data. And at that point, what you have is content. DAM will automate various processes and tasks in that workflow.
From the Digital Master are spawned all kinds of children and grandchildren. We put the digital master into the DAM database. So it's a humongous file. I know of files that are easily 500 to 800 megs. When you go into a store and you see a 6 foot tall display of Michael Jordan, that image is probably 600 to 700 megabytes. And that will break every database except a DAM solution.
Can you give me some real-world examples of how companies are using DAM in new ways?
In the pharmaceutical industry, it's common from a sales perspective that you will have an A, B, and C team, and the A team almost always is your heavy hitters, the people who always exceed quota, and you always put the A team on a newly announced drug. Because of how the pharmaceutical industry works, the first five, six, seven months of a drug will determine how profitable the drug is over the next three or four years. So the A team comes in and does that, then the B teams come in and do high-level account maintenance, and the C team follows up and does the kind of detailing and the jobbing in the doctors' offices and so on.
So one of the things that a CMO wants to know is, what are the assets that an A team uses versus the B team and the C team. And what they'll also look for are differences among A team members. Why is the A team member over in the northeast territory doing this whereas the southwest isn't? And the northeast territory is 11 percent over quota where southwest is 5 percent under. That's a piece of data that closes loop for the CMO to come back and say 'something's going on here.'
Digital asset management represents one of the cornerstone technologies for the smart media factory. The factory is really about the automation of the reusable digital media with a heavy emphasis on the digital master, a highly reusable digital asset specifically engineered for all kinds of automated workflows.
Let me give you an example from Martha Stewart. MSO is an entertainment firm, but it's also a catalogue commerce firm, and one that's specifically characterized by a really strong brand. One of the things that they're doing that's kind of interesting is they put all of their magazine articles as searchable PDFs into the asset repository, so that when they do story research for a new TV segment, instead of spending five or six hours, a producer can in 15, 20 minutes retrieve all of the material and get it at their fingertips.
One of the things they have found is that when a consumer really lights up about a particular category, like making casseroles or doing a theme party, they will pay a premium to get additional material on that particular category.
MSO is looking at a couple of different options basically as kind of an online subscription, you know, like a $29, $39 a year subscription that gives you access to the archives. And then they're also looking at some topical, one-time subscriptions for like $9.95 that give you access for 60 or 90 days, that kind of thing.
And do you think consumers will pay for this kind of content?
It is a no-brainer, and again, when you get rid of all that dot-com hoo-ha, basically what the models show again and again is that people will pay a premium for those items they consider to be valuable and relevant.