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December 16, 1999

AegiSoft Looks to Extend Model Beyond Blockbuster

In Tuesday's MC News, we told you about Gamecenter.com's efforts to distribute hard-copy demos of its games on customizable CD-ROMs in an age when Internet bandwidth doesn't yet match the massive size of most computer video games. The cost for such demo CDs? Five bucks plus shipping for up to 20 game demos on one disk.

Or you can head to your nearest Blockbuster store and rent a video game for five nights for $4.99. Then, using "E-Tokens" technology from Rockville, Md.-based encryption and regulation software vendor AegiSoft Corp., the renter can extend the rental five nights for $3.99 by purchasing the E-Token, which contains a new access code, from the store or over a toll-free modem or Internet connection. A portion of the accrued rental fees then can be applied to purchase of the game.

That model is being tested at 175 Blockbuster stores in 14 markets. "This test will enable us to ascertain customer demand for this new online approach and to continue to provide more exciting new gaming options in our stores," says Steve Lundeen, vp of interactive merchandising for Blockbuster. "This technology has the ability to replace traditional crippled-down demos as a try-before-you-buy offering," offers Alex Saenger, vp of marketing and operations at AegiSoft. "With this technology you get a full version."

But for AegiSoft, the relationship is about more than rent-to-own video games. It's instead a high-profile opportunity to push through a new software distribution model. Software manufacturers could use AegiSoft's encryption technology on their own web sites and software retailers like Egghead.com and Beyond.com also could take advantage of it. "We offer them the opportunity to change their model and enhance their model," says Pat Winger, evp at AegiSoft. The encryption keys only can be used once, protecting the software license and the retailer.

"Online stores will be able to offer download versions without worrying about the customer disseminating the software without the proper license," says Saenger.

But the consumer software market may be just the tip of the iceberg. AegiSoft envisions working with enterprise software vendors like Baan, Oracle and SAP, allowing them to reach small-business customers who normally would be priced out of full application suites by leasing individual applications on an as-needed basis. Given the complications of enterprise software, that may be harder in practice than in theory, but it's clear that software distribution models are changing [see MC News, Nov. 11, 1999] and AegiSoft is positioning itself to be a player in this brave new world.

--Dennis Callaghan

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