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The following is a business that defines the new age of legitimate, digital distribution.

For the last five years, the media


industry has been leveled by the introduction of consumer sovereignty. What began as a limited flow chart, where as the com-
pany dictated all means of production, distribution, and disbursement – has now evolved into an information continuum.
We embrace this revolution with open arms, and by doing so, have created a method of publishing, tracking, and royalty
disbursement unique to the media conglomerate and the infinite client pool. We have coined this method, “Virtual
Superdistribution Model’ under the auspices of the company Nomedik: A Digital Media Publishing and Distribution Machine.

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Digital Commodities:

The development of Wi-Fi technologies and the ability to transfer information and money disbursements via the internet and
hardware devices, will lead to the next sector of commodity exchanges: Digital Commodities. The definition of digital commodi-
ties are any form of proprietary information that can be transferred via Wi-Fi or the internet in exchange for money. Licensing
agreements and content ownership will be the two largest staples of the big business in the 21 century. A company that can
provide proprietary software for each of the sectors, and attach it to a fundamental payment center will rise to the top of this
developing sector. By defining the system as ‘open ended’, it is possible to collect large revenue and by establishing a tax from
participants who remain autonomous of their content (i.e. ATM transactions). Digital Commodities includes, but is not limited
to, computer software, media (music / videogames/ film), contracts for tangible goods, and all future commodities will become
available for network distribution. The method of distribution is defined as Superdistribution and deals with the multi-manag-
ing of digital commodities by clients who share ownership and marketing share.

Revenue Potential:

1) Big Business: Hardware Sector


Once a sound network is established with a backend payment system and front end cliental, hard ware companies will provide
lucrative partnership deals and demand exclusivity. We can license out this system similar to Microsoft when they piggy-
backed IMB. It would be beneficial to remain industry standard as opposed to Proprietary specific.

2) Existing Publishing Firms:


Publishing houses with conventional clients will want to license out third party agreements in order to remain in synch with the
status quo. Think major Record Labels or Film Studio Conglomerates and Software/Video Game Companies providing front end
marketing and budget then resourcing their method of licensing and money disbursement to us.

3) Individual Clients:
We will contain our own digital publishing firm as a directive for Superdistribution. This will eventually lead to the greatest
amount of revenue for it will be open ended and autonomous. An enter/exit fee will be applied to all services rendered.

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I. SHAKEDOWN OF THE INDUSTRY:
12 COMMANDMENTS OF ‘FUTURES’ DIGITAL PUBLISHING

1.) As easy and seamless as it is to download/ distribute content, it must


be equally as seamless to publish/upload content under the same protocols.

2.) Recouping fees is not an applicable method to generate funds in this day and age of digital distribution.

3.) Stop worrying about radio exposure: Digital Radio (iBiquity Radio) will take over
and the consumer will be able to customize content.

4.) If you give the artist the choice to distribute their own media, they will pay a
subscription if all provisions of a publishing company are offered.

5.) There are an infinite amount of artists with the ability to produce their own music/media with little overhead.

6.) At this very moment, technology has made it possible for a publishing company
to automate all services and licensing available to the masses. (Low hanging fruit)

7.) Attempting to ‘convert’ non-digital licensing agreements in this day of digital distribution is a paramount mistake.

8.) Establishing a publishing company that is ‘compatible’ with digital distribution is the key to success.

9.) Establishing a system that keeps the client spending money on their enterprise will generate healthy revenue streams.

10.) It is important to brand the ‘Network’ rather than the individual artist: less risk.

11.) The creation of media will shift from linear to infinitely circular and seamless.

12.) The software, financial, and publishing/legal sectors will inevitably merge into a seamless function.

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II. VIRTUAL SUPERDISTRIBUTION MODEL (VSM)

1) Financial Center

Interaction with the client and the consumer will produce a new revenue stream by means of media being purchased and redis-
tributed for sale under the guise of Superdistribution. In order to create a monopoly, it would be necessary for a company to
retain accounts payable/receivable separate from a de facto Digital Rights Management system (ContentGaurd), so that we
would retain leverage from the software sector. This is the foundation of the Virtual Superdistribution Model: a banking system
that supports/funds an autonomous enter/exit taxing mechanism (ATM) that attaches itself to any digital media published
under an open publishing company (Nomedik). This sector of publishing/banking has absolutely not been exploited nor teth-
ered to the digital rights management/publishing sector. By financing an automated machine that specializes in the tracking
of digital media published under our subsidiary, we will be the first step to industry dominance. This will create a direct rela-
tionship between the client, consumer, and financial institution.

2) DRM: ContentGaurd

What is ContentGaurd: A backend company that protects and tracks media to be used under a publishing company’s rules and
regulations. Important in this decision to choose ContentGaurd is their affiliation with Microsoft who is lobbying for their mar-
ket share. Also they have a pseudo banking system that can be attached to a financial center for seamless integration. We are
eager to be the first certified company that Microsoft endorses. Microsoft, with its Microsoft Windows XP Media Center Edition
2005 and other technologies, is a front runner in non-linear creation rights and fully endorses the notion of creator/viewer
interaction. Most importantly, these laws are international, as is the internet, as long as they are attached to a central finan-
cial system. ContentGuard has also devised a method of Superdistribution that is applicable to our business model.

3) D.E.M.O.

The publishing sector of the Virtual Distribution Model is automated software that will provide the client with conventional pro-
visions and services necessary for the client to retain rights of their media. Unique to this software will be stipulations that
allow for the redistribution of that media under the new laws of Virtual Distribution. We set the standard for media being cre-
ated without conventional contracts, as opposed to converting existing client/publishing house contracts. Within D.E.M.O. there
will be software that attaches itself to remix software (Greensting), a module system that tracks when media is remixed and
attaches it seamlessly to the DRM system (ContentGaurd) for redistribution.

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FINANCIAL CENTER

CONTENT GUARD

D.E.M.O.

GREENSTING

SUPER DISTRIBUTION

CLIENT CONSUMER

EXTREME LICENSING

FINANCIAL CENTER

ROYALTY DISBURSMENTS

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The business of Media Solution deals with the need of a vessel think tank to create bridges between emerging technologies and
industry sectors that they affect. With the rapid and frequent upgrades in electronic and legal sectors, media has been pushed
to the outer limits. Many times, the actual media company is forced to restructure their entire revenue model if they are to
retain profits. Nomedik is a business that develops sound, revenue intense business models built to endure the present and
future behavior of the consumer and the environment that molds them. We construct channels of opportunity for the problem
at hand – D.E.M.O. being our flagship commodity.

CONSUMER

LEGISLATION/LOBBY

NOMEDIK MEDIA SOLUTIONS

CONSUMER

NEW REVENUE

The philosophy behind D.E.M.O. (digital rights technology) allows for the content to be wrapped and the rights to be ascribed to
the use of that content as it travels all over the web and to the eventual licensing docks…not just music, any content. You
can actually turn file swappers into cyper-salespeople. All the files that can be shared this way have to be tethered to e-com-
merce tethered to commercial relationships. I believe we should turn pirates into customers, or at least those who can aid in
distribution of content and pay them a commission.

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Core Elements of D.E.M.O.

1) Copyright Licensing
•Single and Multi Party DRM Contracts
•Mp3 Downloading Agreement (First and Second Generation Files)
•Digital Rights Management Information and Updates
• ASCAP / EMI Registration

2) Account Information
•Media Activity and Rate
•Disbursement Schedule
•Regional Distribution Information
•Merchandizing Payments

3) Media Partnership / Extreme Licensing


•D.E.M.O. partnerships with Licensing Ports and P2P groups (Choose level of Participation)

4) Standard DRM Compliant Software [ContentGaurd]


•Seal of Approval DRM system with Microsoft / Sony Phillips Intertrust Consortium

Secondary Services:

1) Available Subscription to Greensting


•Integrated remix software for producers who remix

2) Public Relation Services


•Supplemental Marketing Modules (Superdistribution

3) Subscription to Medianomics [Business to Business Journal]


•Quarterly Journal for Industry Strategy (Ads Involved)

4) Publishing Investment Program


•Investment for Equitable Clients

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CLIENT

NOMEDIK

MUSIC VIDEO

D.E.M.O.

CREATIVE COMMONS AGREEMENTS

CONTENT GAURD "HARRY FOX" SOFTWARE

GREEN STING SOFTWARE REMIXED MEDIA

EXTREME LICENSING SUPERDISTRIBUTION

LICENSING AGREEMENTS WITH DOCKS SELF GAUGING MEDIA / PROMOTERS

CONSUMER

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PROBLEM:

With the emergence of innovative technology, Digital Rights Management systems, and the consumers increased appetite for
media-on-demand, it will become increasingly more difficult for media companies to retain profits form their expensive rosters.
If the network system and digital files are to become the standard for transferring and replaying media, then the publishing
company must respond with a profitable scheme that takes advantage of these developing circumstances. A publishing com-
pany that promotes infinite participants (unlimited roster), automated licensing and publishing contract agreements, and most
importantly, seamless communication between artist, consumer and publishing house will be the victor. This is the beginning
of an era defined as ‘world media’ which is represented by international agreements royalty payments, distribution, and con-
sumption.

Permanent tracks are being laid for the transportation of media between artist, consumer and their respective publishing
house. Within the next couple of weeks, major media conglomerates will release the first industry standard for tracking media
and all the parties involved in owning and creating that media. This opens the Pandora’s Box for a unit that can embrace the
world’s artist, from the urbanite to the transcontinental producer, and connect them directly to their consumers in virtual time
and space. The first to engage both the artist’s participation and trust- with an established royalties disbursement and mar-
keting system- will be the next media conglomerate, with unprecedented market share and profits.

Let me warn you: stepping into the arena of virtual distribution, although ambitious and rewarding, is a venture that must be
thought out methodically. All aspects of commodities must be considered if a firm is to be the dominant service, with all the
advantages of big business.

The following business model is a guide that satisfies the above concerns. It tackles the actual problem and solution of media
being digitized, as well as new strategies such as speed licensing and anonymous media. This will prove rewarding in the age
of networks and on demand services.

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SOLUTION

D.E.M.O. is a digital publishing software that will attach itself to the established industry standard DRM system. Clients will
upload their finished media with all legal agreements and clearances provided through automated licensing inherent in the
software. The media then will be ‘pushed’ worldwide system of networked (super) distribution and licensing docks. For this
service, a monthly subscription will be collected as the client has access and control of their account information. Included in
the contract will be marginal services such as customized merchandizing and strategic marketing alliances that will further
facilitate the client’s exposure. Acting as co-publisher, D.E.M.O. will also collect revenue on a per media basis. The client will
have the option of paying blanketed fees or a’la carte. D.E.M.O. will establish itself as the de facto of digital publishing by cre-
ating exclusive alliances with consumer electronic corporation: this will allow for future subsidiaries as clusters are formed.

Demo’s Core Services:


1) Copyright Licensing /Publishing Registration
2) Secured Payment Services
3) Media Partnership with Licensing Ports
∞•Ring Tones, P2P groups
4) Standardized DRM with industry compliant software that guarantees maximum consumer participation and security.

Demo’s Marginal Services Include:


1) Available subscription to open ended remix software (Greensting)
∞•Published media micro-mixed and redistributed with producer receiving royalties (Dangermouse Gray Album).
∞ This increases revenue and eliminated remix clearance problems.
2) Public Relations Services: Social Networks and Conventional methods of services offered through third party registry.
3) Subscription to Medianomics: (industry Business to Business journal)
4) Publishing Investment Program ( For proven artist, the ability to match revenue and invest in own media ventures.

Who is an ideal candidate for D.E.M.O.?

Any person who has created speed media and is in need of a broker to manage and distribute this media.
A person engaged in paying technology based fees and is aware of the power of network systems and how they operate.
Participants include musicians, producers and person capable of providing media defined by Digital Rights Management systems.

Why do they (client/artist) need this?

Distribution and all media will inevitably be circulated by networks. The days of branding the next ‘hot’ ticket are fading. A
networked distribution company has the ability to allow anyone to participate. By establishing a publishing and distribution

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relation that is in synch with technology, Nomedik will offer a service that allows the artist and consumer to communicate with
each other and exchange money for media with limited interference. We are offering autonomy to the artist and customized
information to the customer seeking media.

Explain how you will make money again?

Nomedik will make money by collecting a subscription from the artist. Also, we will provide certain fringe services that engage
the artist in expanding their brand and circulation. There will be levels of participation that the artist can purchase and incen-
tives provided by Nomedik if certain goals are obtained. Also, Nomedik will make money by licensing the software D.E.M.O.
other P2P networks who will market the software to their personal networks. By being a co-publisher of media, we will request
percentages of monies collected per media purchase. This will be accomplished by establishing blanked fees or charging the
merchant a’la carte.

Who is the competition and what advantages do you have?

The competition is Mp3 stores who have already established agreements with record labels. Fortunately these agreements are
not exclusive so the label can push their media through other avenues. Being that we are deconstructing the record label, out
biggest hurdle is releasing propaganda to the individual client stressing that ‘autonomy’ is the goal of any client. If a client
can make more money on their own and have more options of licensing and merchandizing, then they should convert to a more
optimized system. This can only be achieved by illustrating the advantages of networked marketing and distribution. Also
explaining the cause and effects of emerging technologies and the threat that these factors have on conventional publishing.

Credit Card Empires:

The original concept of introducing the credit card to the consumer had three levels of entry:

1). To establish a system or network of merchants who would accept the Visa or MasterCard as a method of payment.
2.) To collect a merchant’s fee from the merchant in exchange for an increased consumer participation. This would be applied
in a cents on the dollar method (otherwise known as a tax). Also included was the leasing of equipment to process purchase.
3.) To establish a network of consumers who would accept the Visa or Master card as an alternative method of payment.
4.) To apply a fee or tax to the consumers bill in exchange for increased credit line and tardy payments.

Described is one of the first successful double tax systems that took advantage of the network, and the consumers will to pay a
fee for the convenience and monitoring of their daily purchases. Again, establish the system, set up fees and taxes, and the
consumer and merchant will pay a fee for increased convenience and consumer base.

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Note: Visa or MasterCard was never concerned with the ‘type’ of purchases the consumer would make or the product that the
merchant was peddling. Similar is the method of Virtual Distribution: less concern over the Media, more concern over access to
that media via networks and convenience.

Free For All vs. Subscription

The idea of an open sourced record label is out there. In fact there are three major (minor in revenue) players that are intro-
ducing the concept with good intentions. One of there problems is revenue. Although they provide a progressive model for the
artist (50/50 split) they do not have one present that will generate company funds.

The only way to secure longevity, and provide the artist with realistic services outside of downloading is to charge a subscrip-
tion to the artist. This will do two things:

1) Give D.E.M.O. a stream of revenue that secures future upgrades and agreements to the system.

2) Allow D.E.M.O. to place their artist in tiers according to how much time and resources a particular client requires.This is
called a progressive revenue model. If your services are based on retro payments –only after the consumer purchases money
does company ‘x’ receive payment’- then you will be at the whim of the consumer and the quality of your brand and exposure.
Conversely, if you guarantee the most exclusive agreements with licensing docks and of course an agreement with the de facto
DRM conglomerate, then the artist will be compelled to pay a fee for the professional services rendered. We do not want to
make the same mistake that email services made in setting up free accounts and depending on ad revenue, only sink further
into debt for lack of revenue. Introduce the fee, guarantee the services, standardize accounts payable / receivable, and witness
the largest market share advantage this millennium.

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DISTRIBUTION/ROYALTIES

Distribution: The business of creating a de facto Distribution model is one that will dictate the economic success of a virtual
publishing house. Once the standards are set, royalties will be divided amongst the inventors then trickle down to the publish-
ing house, then artist. D.E.M.O. will establish itself as next in line for collecting royalties…we will be the conduit for digital
rights management to publishing firms.

In creating this ‘superhighway’ consortiums are considering the following – the top two players being the Sony-Intertrust-
Philips Group and Microsoft. Both positioning themselves as the authority for all other Consumer Electronic platforms. By the
end of the year (2004) the first model will surface.

Nomedik wants to be the test partner they choose to test virtual distribution.

Do’s and Don’ts of choosing the Correct DRM management system.

Do
A true DRM system has to work when content is on a device which is online, and work on a device which is offline. It must
report copy transactions, maintain unique content identifiers, it must offer a way of stating unambiguously what rights are
being transferred in each transaction, it must cater for a multi-tiered distribution chain and it must have a trust model which
is tough to hack, but which also can have its keys re-set, if it ever is compromised.

DON’T
Apple's Fairplay system is a lightweight DRM system. We need something more robust which is not so easily hacked,' said
Peters. 'At Philips we try to think of DRM from the consumer point of view. You can adopt a single proprietary DRM system and
everyone can use it. That's not ideal because companies want differentiation.

SOLUTION:

Align Nomedik with Microsoft as a front-end publishing house. This symbiotic relationship will benefit both start-ups:

1) Microsoft will enjoy royalties-per-use will increase for Microsoft


2) Nomedik will prosper from the market share that Microsoft has established with Consumer Electronics. This exclusive agree-
ment will catapult Nomedik to unparalleled heights. It is an agreement that will need leverage from Nomedik and the confi-
dence in a program that will exploit the idea of media being tagged with proprietary DRM.

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Extreme Licensing:

One of the areas that will generate revenue for D.E.M.O is the licensing ports that media is now able to play on.. Cell phones,
PDA’s, Laptops, and eventually places such as Starbucks are now docks where media can be distributed to. By establishing
ourselves as a front end publishing unit to Microsoft, we can easily be the firm makes all necessary agreements with these
docks. In return, these units will provide blanketed fees for the use and further distribution of our media. As we speak, Mobile
phone units are producing music by contracting dee-jays for music. Imagine the market share growth that is possible if any-
one could have the opportunity to not only play their published media on these mobile phones, but also on other units as well,
all the while collecting royalties. This is the future: D.E.M.O. will make this an autonomous transaction while serving as the
payment processor.

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THREE TIERS OF NOMEDIK INTEGRATION: DISTRIBUTOR: CONTENTGUARD/ DRM SOLUTIONS

FIRST TIER
1. Fee Charging/ Payment Mechanism
2. Digital Publishing Agreements customized for the redistribution and remixing of media
3. Broker for exclusive Licensing Dock Agreements (Maximum Exposure)

SECOND TIER
1. Size of Network (International Clearances)
2. Two Way Client / Upload Mechanism for Client Media
3. Merchandizing Mechanism for clients and Users (Potential Ad Revenue)

THIRD TIER
1. Patent for Publishing Front End Sample Software (Seamless Remix Software)
2. Pre-published Integration System (Agreements with prerecorded media)
3. Ability to publish all types of media (Video/ Print)

Notes: Virtual Distribution will have the same goals of a conventional publishing house with a few exceptions:

1) The independent artist will still need marketing and exposure. The network will replace the need of mass street teams and
radio/print ad strategies. Superdistribution will act as a virtual agent in promoting snippets or entire catalogs to clustered
clients of the same genre.

2) The actual ‘network’ (D.E.M.O.) as a functional publisher and collection agency for royalties will refer to radio, print, and tel-
evision for exposure. The artist will receive leverage form being associated with a reputable (marketing and monies disbursed)
network.

3) World Markets will be a reality. A client will, through the aid of connections (Agents) in different regions, maximize their
exposure while collecting revenue from various licensing docks. This is the essence of Superdistribution. Clients will pay for
regions where media will be distributed. This will cover international licensing rates

4) A secure payment system (accounts payable/receivable) with intelligent tracking capabilities is now the standard of royalty
disbursement. The collection of revenue from numerous licensing docks, P2P networks, and consumers will be a service provid-
ed by Nomedik in return for a fee.

5) The artist/client will still need a vehicle to clear music and render legal attachments to their media. This will be a service

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that cost a fee. (Conventional Publishing Services still intact)

6) A payment center and software maintenance will be necessary (replacing the conventional publishing office) and will be out-
sourced to India and China where developers are contracted for better rates. (24 hour service center)

7) A true digital publisher does not own the media but does take part of transaction fees. This holds true unless money is
invested in either the recording of that media or samples cleared. This is not Nomedik’s initial service but it will be considered
once tiers are established.

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LOOKING FROM A MACRO PERSPECTIVE, BEYOND ONLY MUSIC APPLICATIONS,
SUPERDISTRIBUTION LETS DIGITAL INFORMATION /DATA FLOW FREELY,
WITHOUT RESISTANCE, AND IS TYPICALLY DISTRIBUTED OVER PUBLIC
CHANNELS IN AN ENCRYPTED FORM.

Superdistribution is an online Superdistribution is actually the


retailing scheme that encourages the process by which the consumer help
free and widespread distribution of
digital files that can only be opened
SUPERDISTRIBUTION increase the distribution and sale of
packaged / encrypted files by sharing
under a restricted set of them with other consumers. It
circumstances. These restrictions invites users to download
include opening a file only on a single Superdistribution software, or media,
computer; opening a file a limited from networks by applying a
number of times; or allowing a file to metaware string that can track it's

Superdistribution tracks and enforces usage For example, if you’re a musical artist (client)
rather than possession and is generally you want P2p users to freely distribute you
recognized as the best approach to selling files to all of their friends, but you do not want
digital property (digital versions of text, data their friends to be able to play the files until
knowledge, pictures, music, video etc.) on the they’ve obtained your permission to do so,
Internet. It is based on the observation that which might involve them signing up to your
electronic objects are fundamentally unable email list, allowing you to tell them about your
to monitor their own copying but trivially able upcoming CD, or having them pay a dollar for
to monitor their use. It is a method of the ability to play your music track.
distributing programs, using tamper
resistance module to keep track of usage

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THROUGHOUT THE CONTROVERSIAL PARADIGM SHIFT OVER THE NEWER FORMS
OF INTERNET MEDIA DISTRIBUTION THAT ARE EMERGING, THE CONSTANT
EVOLUTION OF TECHNOLOGY HAS SPAWNED MULTIPLE DRM SOLUTIONS, WHICH
IF YOU LOOK CLOSELY, ARE SLOWLY TRANSFORMING INTERNET PIRACY INTO
PROFITS BY ADDRESSING THE ENTIRE DISTRIBUTION AND LICENSING
PROCESS. D.E.M.O. IS A FIX FOR LEAKING SYSTEM.

P2P will become the dominant


technology for searching and
delivering all types of information to
D.E.M.O. LEGAL DOWNLOADS
consumers and the right to
OPEN CLIENT PUBLISHING SOFTWARE ARE CATCHING ON:
determine technological innovation 80 MILLION IN SALES
should not be left in the hands of
Hollywood. NOMEDIK therefore is a 2003 AND PROJECTED
wonderful opportunity to rebalance
the power of structure, turning
200 MILLION IN 2004.
pirates into salesman and tipping the

The philosophy behind D.E.M.O. (digital rights Many experts believe that the entertainment
technology) allows for the content to be industry is ripe for a new DRM (D.E.M.O.)
wrapped and the rights to be ascribed to the technology that facilitates Superdistribution in
use of that content as it travels all over the order to bring a copyright respecting
web and to the eventual licensing docks…not commerce element to file-sharing networks.
just music, any content. You can actually turn The most compelling aspect of this process in
file swappers into cyper-salespeople. All the regards to music is that it allows files to be
files that can be shared this way have to be legally shared on P2P networks with
tethered to e-commerce tethered to compensation being paid to the rights of the
commercial relationships. I believe we should holder at each transaction. Now that’s
turn pirates into customers, or at least those

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