The maligned, misunderstood and misnamed processes of Digital Rights Management—DRM—have received an important boost from two recent developments, both involving Microsoft. As part of its effort to end disputes with third parties, Microsoft settled a three-year lawsuit with one of the pioneers of DRM software, InterTrust of Sunnyvale, Calif. The resolution of the suit, announced last week, grants a license for Microsoft to provide InterTrust capabilities to its own software customers in order, among other things, to limit the number of copies that can be made from an item that is downloaded from the Internet.
InterTrust, which was acquired by Sony and Philips in late 2002, began working on products in the late 1990s that would allow owners of content, be it print, music or video, to set business rules that protect and, in an ongoing way, govern the use of their works, whether in downloading, forwarding or copying (PW, Dec. 8, 1997).
In that regard, the second important DRM development was the April 4 announcement that Time Warner has become a strategic investor, along with Microsoft, in ContentGuard. Based on research carried out by Xerox, which retains an equity interest, ContentGuard's standards and software allow for "the persistent, authorized use of any digital resource." This means that a piece of content is protected not just within a specific environment, like a computer, but wherever it travels over the Internet, Intranets, extranets, WANs, LANs, etc.
It should be noted that even the threat of controlling the copying of "unauthorized files" from the Internet is something that continues to sends fair-use proponents in academia and cyberspace into orbit. For example, on June 18, the Annenberg School of Communications will host a conference entitled "Knowledge Held Hostage? Scholarly Versus Corporate Rights in the Digital Age."
Easier the Better
Proponents of DRM, such as ContentGuard CEO Michael Miron, would argue, however, that the better and easier DRM products are to use, the more content will be available for everyone. A veteran of several new technology introductions, including PCs and cell phones, Miron observed: "I have seen this same movie five times. Everyone always assumes that new technology takes out the old. It never does. Remember the 'paperless office?' Never happened. Ten years ago, the FTC was giving away cell phone bandwidth, because no one believed it had any commercial value."
Apart from providing a standard for rights language for the Open eBook Forum, ContentGuard has yet to address book publishing issues directly. Nevertheless, Miron believes that digital distribution of publishers' products will have a positive impact overall: "DRM protection of digital content will, in fact, only expand the amount of content—whether books, music or movies, both physical and digital—that will become available. Business models may change. Roles of different players across the value chain may change, but overall the market and revenues will grow."
Knowing when this will happen, he admitted, is another matter. "DRM is moving from infancy to adolescence," he said. "Two years ago, no one would have believed that Apple—a company representing only 5% of the installed base of computers—would today be the market leader in legal, commercial, DRM-protected downloads of music, to the tune of $50 million and counting." Ron Grant, the senior v-p at Time Warner who reportedly championed the deal with Xerox and ContentGuard, noted, "Together with ContentGuard and Microsoft, among other partners, we will continue to work toward the day when we can successfully... offer consumers exciting new digital media products and services."
Both at association events and in meetings with vendors, publishers have said for several years that the assurance of effective DRM will make them more likely to sell their products over the Web. A couple of publishers contacted about the new DRM developments agreed that they were interesting, but as one noted, "Actually we don't have an opinion about this just yet. It still may be a little early."
Ultimately, commercial success in the digital distribution of publishers' works will be a function of success in balancing protection with a good consumer experience. "Consumers have the ultimate power," Miron asserted, "Their wallets and their feet. If they don't like it, they're gone."
