Managing Rights Management

CES 2010: DRM Is Alive And Well - Part 1

The 2010 Consumer Electronics Show was very upbeat, perhaps more so than two years ago (last year doesn't count given the economic implosion resulting in widespread malaise and depression). Of course the purpose of the these shows is to drum up excitement. 3D TV (not quite ready for prime time in my view, but I did not spend much time looking), Mobile, and Auto seemed to be the principal sectors leading the charge.

Having seen a lot of the show (at the expense of my feet), one conclusion is that rights management, broadly construed, is everywhere. In saying this, I'm taking a very expansive view of rights management to include both technical and non-technical--largely business model factors--means of protecting digital content. I'm excluding from consideration music CDs and related issues since there does not seem to be a good solution specific to the CD problem that is acceptable to privacy and consumer advocates.

In giving a few selected examples of how rights management is being further insinuated into services and business models, I'm leaving out many vendors (apologies to those not mentioned). I'm sure that critics will be able to find counter examples  My goal here is simply to identify trends.

Various parties with DRM and related solutions were at the show, including Irdeto and Digital Containers. HDMI Licensing had a booth as well. Metadata company Gracenote had a  booth that also highlighted customer applications. Executives from Widevine were in town but did not have a booth.

Media futurist Gerd Leonhard (among others) have long argued that the future of media is and should be streaming rather than downloading files. The 2010 CES makes it perfectly clear that the world is moving substantially toward media streaming. More in the next installment. 

Apple And NEC DRM Patent Applications

On Thursdays the USPTO publishes new patent applications. Both of today's Spotlight Applications concern aspects of DRM. Assigned to Apple, the first application discloses techniques for protecting audio and video on media playback devices. Assigned to NEC, the second application discloses protecting digital content on mobile devices.

NetBarrage and Samsung DRM Patent Applications

On Thursdays the USPTO publishes new pending patent applications. Both of today's Spotlight applications address various aspects of DRM and copyright protection in mobile contexts. Assigned to NetBarrage (IL), the first application discloses a Peer to Peer file sharing mobile system with copyright protection. Assigned to Samsung, the second application discloses techniques for managing digital rights management contents in portable terminal.

Huawei Technologies and NHN Co DRM Patent Applications

On Thursdays that USPTO publishes new patent applications. Both of today's Spotlight Applications address various aspects of DRM. Assigned to Huawei Technologies (CN), the first application discloses techniques for realizing accurate billing in digital rights management. Assigned to NHN Corporation (KR), the second application discloses ways of presenting advertising using free ring tones and DRM.

Open Source Meets Proprietary: Where's the Balance?

BusinessWeek has an article on open source and restrictive and/or proprietary technologies such as DRM. The article reports a discussion with Nokia's Dr. Ari Jaaksi:

Jaaksi, Nokia's vice president of software and head of the Finnish handset manufacturer's open-source operations, said: "We want to educate open-source developers. There are certain business rules [developers] need to obey, such as DRM, IPR [intellectual property rights], SIM locks and subsidised business models.... Why do we need closed vehicles? We do," he said. "Some of these things harm the industry but they're here [as things stand]. These are touchy, emotional issues but this dialogue is very much needed. As an industry, we plan to use open-source technologies but we are not yet ready to play by the rules; but this needs to work the other way round too."

Enterprise and Mobile DRM Mini-Roundup

Here's a roundup of various recent Enterprise and Mobile DRM stories:

Enterprise Rights Management software vendor Liquid Machines has announced adding  Dr. Renato A. DiPentima to their Board of Direrectors and achieving Microsoft Gold Partner Certification. Earlier this year they closed a $10M Series D equity financing,

Oracle's latest release of their Information Rights Management product (nee SealedMedia) is now available. The product protects sensitive information contained in emails.

SafeNet acquires Norweigen mobile DRM company Beep Science AS, according to this SafeNet press release.

Barcode Ticket Security - DRM Not

Masabi's Ben Whitaker wrote a most interesting article on Barcode security. Even those readers who don't usually care about such things should have a look; lots of interesting ideas there. Whitaker addresses security and DRM:

Anti-copying using DRM (Digital Rights Management)
However you deliver a barcode, it has to be presented in a scannable format, which means that an adversary can always scan the ticket, and if they want to, change some details on the barcode and create multiple copies without DRM. People that have barcode delivery systems that use or rely on "forward lock" or DRM to prevent the barcode image being sent from one person to another are being blind to the availability of barcode scanners to beat all of their software. Also consider that OMA DRM for forward locking images downloaded to phones places laughably little protection against an assailant armed with such exotic tools as a web-browser and a text editor.

Intertrust Announces Licensing Program for OMA and Marlin

Intertrust Technologies announced a new program for licensing its DRM patents for Open Mobile Alliance (OMA) and Marlin Digital Rights Management (DRM) based consumer devices and software. The licensing program will also include patents from Sony and Philips, Intertrust's parent companies.

[For ]...mobile phones, consumer electronics devices, and personal computers for €0.25 per unit. Distributors of PC software applications with OMA and/or Marlin functionality are also entitled to an annual cap of €400,000 on the €0.25 per unit royalty.

Apple Updates iPhone Frustrating Hackers

Apple provided updates to its popular iPhone that frustrates those who have hacked the phone in order to be able to use a network other than AT&T and/or to run unapproved applications. The NYTimes' Saul Hansell writes:

David Pogue, our technology reviewer, received a cautionary message last night from a person familiar with Apple’s plans after he posted a video showing some unofficial, but entertaining, applications that can be installed on the iPhone. Take those applications off your phones now, David was warned, or a software update scheduled for Thursday afternoon could turn your phone into a brick.

On Monday, Apple had issued a press release warning of “irreparable damage” to iPhones that have been modified or unlocked from the AT&T network. It also threatened users that “the permanent inability to use an iPhone due to installing unlocking software is not covered under the iPhone’s warranty.”

Cell Phones: Music, Sure, But Video?

The Boston Globe has a brief interview with Sprint Nextel's COO, Len Lauer regarding their investment in next generation wireless.

A couple of interesting points. First, will consumers pay $2.50 per tune rather than the iPod 99 cents simply for the privilege of copying, burning, etc.? The music industry seems to be assuming that each person will make 2.5 copies, on average, and that they want to be compensated for the extra 1.5 copies.

Second, will video on cell phones be bigger than music (audio)?  Does anyone really want to watch clips of the Patriots on their cell phone screen? I don't get it. Must be a generational disconnect. What's holding video back? DRM.

Snippets:

OMA Standards For Mobile DRM - A Deal?

According to Reuters, mobile operators and MPEG LA have agreed on licensing terms for the OMA DRM standard. Snippets:

The licensing deal is expected to kickstart a long-anticipated open standard for the protection of digital entertainment such as music, film and video, offering more choice to consumers without the lock-in of a proprietary system.

"The beginning of 2006, that's what we're expecting," said Larry Horn, vice president of licensing at MPEG LA, which represents the key patent holders of digital rights management (DRM) software used in the open standard proposed by the Open Mobile Alliance (OMA).

Proposed Cell Phone Spec Targets Security

A number of companies, including Authentec, Ericsson, France Telecom, IBM, Infineon, Intel, Lenovo, Motorola, Nokia, Philips, Samsung, Sony, STMicroelectronics, Texas Instruments, VeriSign, Vodaphone and Wave System, have banded together to deliver a hardware-security standard for cell phones, this according to a Security Pipeline article.  Snippets:

Sharing - The New Strategy In Wireless Content Protection

Dow Jones says, Cellular News reports, that DRM-enabled content sharing will be a big driver of industry growth. Snippets:

Another DRM As Competitive Weapon Example

Writing in PCWorld, Martyn Williams, of IDG News Service, recounts how SK Telecom is using DRM as a competitive weapon, some would say as an anti-competition weapon. Snippets:

IDC Says Mobile DRM Complexity A Factor In US

According to this PCWorld article. Snippets:

Motorola's iradio

What's Motorola planning? According to this Gizmodo blogicle, a music downloading (not streaming) service that is subscription-based and "heavily drm'd."

Custom Ringtones

And while we're on the subject of ringtones, PC World has a blogicle on using Xingtones to create custom ringtones.  Xintones does not work with DRM-protected content.

Ringtones Shoplifted

According to a Qpass study reported in Internet News, by 2006 $300M worth of ringtones may have been "shoplifted"  from online distributors. The reason? No Digital Rights Management. Snippets:

Cingular Rumored To Be Eyeing iTunes

So says this Newsfactor article. Snippets:

Motorola iTunes phone faces uphill battle against MS media juggernaut

David Berlind offers insightful comments on Motorola's music-related efforts. Snippets:

The Next Big Consumer Thing

Electronic News has an interesting discussion of the next big thing in the consumer space. Snippets:

Microsoft and Media

Check out David Berlind's excellent  blogicle on Microsoft, rich media, and DRM. Although anything is possible, one cannot underestimate the importance of building a powerful business ecosystem, which is exactly what Berlind says MSFT is doing.  Snippet:

Mobile DRM Standards

Telecom oriented publication Billing World & OSS Today has an article on interoperability and standards in the mobile world, including DRM. Snippets:

Interview With UMG's Barney Wragg

Barney Wragg, vice president of the eLabs arm of Universal Music Group, was interviewed by TheFeature's Justin Pearse. [TheFeature is funded by Nokia but claims editorial independence.) Snippets:

Developers Key to Windows Mobile 5.0 Success

CMP publications are running an article saying that developers are key to the success of Microsoft's Mobile 5.0. Snippets:

MSFT's Portable Media Center: A Threat?

ZDNet's David Berlind has blogged his assessment of Microsoft's increasing traction in the portable media space.  Without taking anything away from Berlind or Microsoft, monocultures in this vertical seem less likely than in the desktop office application space (read "Office"). 

MSFT achieved what some call a "natural monopoly" because of document exchange issues and economies of scale resulting from application standardization. I'll hazard a guess that there are already too many different players--iPods, Cell phones, etc.--in the market place and more are coming. There seems to be agreement on encoding methods for both video and audio. And so rights interoperability will become important to some. Consumers and their advocates are already demanding  interoperability. Whether they'll get it remains to be seen.

Snippet:

Cellular, Content, & DRM

A Forbes article provides a good overview of content services in the US cellular market and mentions competing business models and DRM. Snippets:

More on The Mobile DRM Licensing Fracas

Most of the articles in the "mobile" category here have  covered  the ongoing fracas between the MPEG-LA group and cellular operators regarding patent licensing for DRM. This week numerous outlets covered the latest.  John Borland has a good overview article. Snippets:

 

When DRM Spoils the Party

Writing on UK site TrustedReviews.com,  Benny Har-Even tells the story of trying to install an MP3 ringtone on his  Sony Ericsson V800 mobile phone and being frustrated by DRM. Despite the complaints, the story turns out OK from the writer's point of view.  Snippets:

So Adam beams over the MP3 to my phone. I play it. But when I tried to assign it as a ringtone I was confronted with the message, “Cannot use this file as DRM protection key is missing”.

Sealed Media Raises Money, Supports Blackberry

SealedMedia announced raising $8.5M in new capital from prior investors Pond Venture Partners and Crescendo Ventures in what their press release describes as an "Up Round."  Sealed also announced Sealed Email for BlackBerry.  Snippets:

OMA Distances Itself from MPEG LA

In a press release issued this morning, the standards group Open Mobile Alliance says it is not involved in the patent licensing activities of the MPEG LA group, which recently struck a deal with handset manufacturers. Snippets:

In response to ongoing industry concerns about licensing terms proposed by MPEG LA for the Open Mobile Alliance (OMA) Digital Rights Management (DRM), OMA reiterates its earlier statements distinguishing itself from MPEG LA and its licensing terms for OMA DRM. OMA is a specification setting organization focused on interoperability. It exists as a means for companies involved in the mobile industry to develop open, interoperable mobile specifications based on market requirements.

OMA DRM Patent Holders Revise Terms of MPEG LA License

Sounds like the MPEG LA and the handset vendors are off and running, according to this release.

MPEG LA announced today that the initial group of OMA DRM 1.0 essential patent holders have revised the terms of a joint patent portfolio license to be offered by MPEG LA for use of the Open Mobile Alliance (OMA) DRM 1.0 specification. The group consists of ContentGuard Holdings, Inc., Intertrust Technologies Corp., Matsushita Electric Industrial Co., Ltd., Koninklijke Philips Electronics N.V., and Sony Corporation. The revisions are responsive to feedback from the market following MPEG LA's announcement of proposed license terms on January 6, 2005

GSMA Weighs In on MPEG LA Licensing Fees

The  licensing royalty dispute regarding patents relating to DRM for mobile applications continues, this according to a press release issued by the GSM Association (GSMA). Compare with this earlier and related story.

The Board of the GSM Association (GSMA), the global trade association for the world's GSM operator community that serves more than 1.3 billion mobile telecommunications users, has called for an immediate review of the current licensing program proposed by MPEG LA and the companies involved in this patent pool, for use of the Open Mobile Alliance's (OMA) Digital Rights Management (DRM) 1.0 standard.

Mobile DRM -Yet Another View

Another view regarding mobile DRM from Design Technica:

License revenues from DRM technologies will likely surpass $500 million by 2009, according to market research firm Digital Tech Consulting (DTC).

Mobile To Drive DRM - A Tidbit

 This ZDNet article is interesting for two reasons.  First,  interoperability is one driver for broad adoption of DRM for mobile devices [compare the Who Makes Money and the Royalty Flap blogicles].

Also of interest is that the site provided the HTML coded article for cutting and pasting. Talk about incentives.

8% of US households will buy a cell phone within the next 12 months by ZDNet's IT Facts -- 28% of the US households are likely to purchase a mobile phone over the next 12 months, according to Parks Associates. The mobile phone industry and its content partners will benefit from being first to implement interoperable digital rights management (DRM) solutions, which will provide greater revenue opportunities and better user experiences.

MEF Denounces Royalties For OMA DRM

The Mobile Entertainment Forum issued a statement on behalf of its members that is, it would appear, an element of a public negotiation strategy regarding a private agreement. Fascinating.

The Mobile Entertainment Forum (MEF) today announced that, following in-depth consultation with its members, it has issued a statement regarding the licensing program proposed by MPEG LA for Mobile Digital Rights Management (Mobile DRM) on behalf of the essential patent holders of OMA DRM V1.

MEF Statement on MPEG LA licensing program for OMA DRM V1

As already announced on February 14, 2005, the Mobile Entertainment Forum fully supports the aims of the Open Mobile Alliance (OMA) DRM standardization initiative, and is committed to an interoperable, open ecosystem which respects the rights and meets the obligations of all participants in the mobile entertainment space. The MEF sees this as key to the future development of our industry. However, recent announcements made by the licensing body attempting to impose royalties on mobile DRM have led the MEF to speak out, in the name of its membership, against what it perceives as onerous licensing terms. The terms being considered by MPEG LA, described below, could have a devastating affect on any business involved in mobile and wireless entertainment. Under the proposed License, royalty rates for patents essential to OMA DRM 1.0 in connection with products that have OMA DRM 1.0 functionality or OMA DRM 1.0 and OMA DRM 2.0 functionality would be

(a) US $1.00 per device (payable by the party that offers the device to an end user), and

(b) 1% of any transaction in which an end user pays for delivery of a digital asset employing OMA 1.0 (payable by the service provider)

MPEG LA plans for an actual license agreement to be issued by March 2005. To view the full news release, go to www.mpegla.com/pid/drm/

MEF's mDRM committee reviewed the licensing scheme proposed by MPEG LA and after consultation with the MEF membership believes that MPEG LA's proposed royalty rates are onerous, impractical and unclear, and has published the following comments:

Mobile To Drive DRM - Who Makes Money?

The Gadget Files has a note concerning market research published by Parks Associates that says the mobile market will drive DRM use, mainly because of open standards for mobile DRM.

I can't immediately think of an exception, but it appears that when open standards prevail, no one makes any money from the standardized technology, as opposed to what one does with it. For example, no one makes money directly from  the protocols of the Internet, the TCP/IP stack, or from the WWW protocols HTML and HTTP. On the right side of this page are a list of many of  the mobile DRM players. How do they make money? Maybe not from DRM itself.

Anyway, here's an excerpt from The Gadget Files  story:

A new research report from Parks Associates, Digital Rights: Content Ownership and Distribution, suggests that The mobile phone industry and its content partners will benefit from being first to implement interoperable digital rights management (DRM) solutions.

OMA Royalty Flap

According to a Reuters story that ran on Friday, consumer electronics companies are unhappy with the royalties proposed by OMA. Here's a portion of the story:

A handful of technology companies are overcharging for anti-piracy software needed for digital music stores on the Internet, preventing the emergence of open standards, electronics goods makers said on Friday.

Several consumer electronics makers balk at the $1 charge for anti-piracy technology proposed by the Open Mobile Alliance (OMA), they told Reuters. The OMA is a group of handset makers, wireless telecoms operators and other technology companies.

Mobile phone makers and consumer electronics makers said $1 per device is too high a price only to protect music and video against illegal copying. They will not be able to recoup that money through revenues expected from digital entertainment.

"This kind of price is certainly unreasonable. It's not in proportion to the economic value," said one senior executive at a top five mobile phone maker who declined to be named.

He points out that last year alone 684 million mobile phones were sold. If handset makers had put anti-piracy protection software in those phones, the $684 million in royalties would have exceeded total digital music sales on the Web last year.

A senior executive at a global top three consumer electronics maker agreed that "this is too expensive." Consumer electronics companies are keen to make devices interoperable with mobile phones, so consumers can play tracks stored on their phone on their home TV or stereo, or vice versa.

They are reluctant to sound too harsh, however, because the irony is that they desperately need the OMA's anti-piracy technology which is the first open standard that can be used by all electronics goods makers. Other technologies are owned and controlled by individual companies such as Apple for its iTunes Music Store and Microsoft.

This appears to be some "negotiating in public."

There is, of course, a long tradition in the consumer electronics industry of licensing per appliance, an approach that makes calculating the amount due uncomplicated.

That said, it's interesting to note that the royalties are not based on the value of content delivered to the handset, clearly a more complicated affair that would required the involvement of the content distributors and perhaps producers. Still, maybe the handset approach implies that content is still king.

Insinuations: Microsoft, Nokia, OMA

Several news outlets covered today's story regarding Microsoft and Nokia partnering up. Here's one. Nokia will make use of Microsoft's DRM 10. The agreement also indicates future interoperability between DRM 10 and OMA, the standard for mobile phone DRM, giving Microsoft a foothold on the mobile platform.