Protexis Launches RED to Break Open Digital Content Distribution
Breakthrough Distribution Model Readies Content Publishers and Retailers for the Next Evolution of the Web; TigerDirect Signs on as First Major Technology Retailer
November 13, 2006, Vancouver, BC – Protexis, a leader in digital content distribution, today announced the launch of REDSM, a system that enables open, efficient and neutral networks for online digital content distribution. RED (Retail Electronic Distribution) is a leap forward from current outsourced e-commerce models, and is a natural evolution that fully leverages the Internet for digital content distribution. Initially available for electronic software distribution (ESD), RED will connect software publishers with online retailers to efficiently extend the availability of digital software in a seamless shopping experience. TigerDirect, Inc., one of the industry's top computer and computer product retailers, and a subsidiary of Systemax Inc. (NYSE: SYX), will be one of the first retailers to be enabled with the growing inventory of software titles already in the system.
"The Internet is evolving rapidly to solve many long-standing distribution and retail channel challenges, yet two key constituents remain grossly underserved. Retailers and content publishers are not yet fully benefiting from the vast potential of the ESD market," stated Zippy Aima, research analyst with the Frost & Sullivan North American Information & Communication Technologies Practice. "Today, publishers cannot reach the vast market of consumers loyal to major online retailers, and retailers cannot access publishers' digital inventory while maintaining customer ownership. There is a large growth opportunity here and the Protexis RED system is addressing this."
Retailers do not have an integrated solution for electronic software distribution, currently a $3 billion market according to IDC. They must either negotiate complex licensing and electronic distribution agreements with multiple publishers individually, which is neither efficient nor scalable, or engage an outsourced e-commerce provider "middleman," which breaks the customer shopping experience by moving customers off their Web site into the middleman's shopping cart. This loss of customer ownership hinders sales by reducing opportunities for building the customer relationship and up-selling.
By directly linking publishers with retailers and providing seamless integration, Protexis RED solves these issues. Its open, neutral and efficient distribution system allows online retailers to build digital inventory directly via RED publishers. Retailers maintain their customer relationships and deliver content through a seamlessly integrated shopping experience.
Publishers are also challenged in the current model. As the purchase, fulfillment and delivery of digital content moves from CDs in a box to bits and bytes over high-speed Internet connections, content publishers are limited by a lack of efficient distribution options that allow them to reach the aggregate market of consumers shopping at online retailers. Publishers want to provide digital content to retailers to extend their reach and increase sales. According to a 2006 issue of Internet Retailer magazine, the top 25 retail sites online averaged 153 million unique visitors per month in 2005. To not reach these customers is a huge lost opportunity for publishers.
Protexis RED solves these problems by enabling publishers to dramatically increase their reach and revenue by offering digital content through an expanded set of RED retailers. When publishers enroll a product into RED, they only have to upload and enroll it once to be able to offer it to any number of retailers participating in RED. Publishers not only have new avenues to sell their products, but also have full visibility and technology-based verification into where and how many products are being sold.
"There is a unique opportunity in the burgeoning ESD market, as a number of fundamental needs have not been met until now," said Karl Hirsch, CEO of Protexis. "Publishers and retailers are tired of the dependency on proprietary online channels and outsourced e-commerce sales models. Protexis RED is a catalyst for the market's evolution to efficient and open online digital content distribution. It acts as the keystone in a content distribution ecosystem of publishers and online retailers, fostering lasting working relationships between all parties. RED isn't a distribution network. Rather, it sits invisibly, powerfully underneath networks – allowing retailers and publishers to participate in the efficient flow of digital content."
"The Protexis RED solution is a landmark advancement in the ESD distribution model, and we're excited to be a part of it," said Bruce Matthews, vice president of business development for TigerDirect, "Our customers will enjoy greater access to an enhanced inventory of digital content while benefiting from an easy-to-use shopping experience."
About Protexis
Protexis is a leader in digital content distribution. The company's patented REDSM system enables the first and only open, neutral and efficient network for online digital content distribution. Protexis brings retailers and publishers together, giving them trusted control, to reach an expanded global community of millions of customers, efficiently and securely. Protexis currently serves large online retailers and over 1,800 software publishers. The company holds a total of four issued and 12 pending United States and international patents, and continues to focus on increasing its portfolio of intellectual property. Protexis is privately held, with headquarters in Vancouver, British Columbia, and offices in Seattle, Washington. For more information, please visit www.protexis.com.
About TigerDirect
TigerDirect, Inc. (a subsidiary of Systemax Inc. (NYSE: SYX)), is part of a group of branded e-commerce web sites, direct mail catalogs, retail stores and relationship marketing selling name-brand PC hardware, related computer products, and industrial products, to businesses in North America and Europe.
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