Those in the industry agree digital rights management is a key issue for wireless, and as a result there are several companies and a range of peripheral players looking to cash in on solutions to the problem.
However, the complicated nature of the subject, as well as the involvement of the Open Mobile Alliance, could stem the success of DRM players for the foreseeable future.
“It’s just the early days,” said Rich Luhr, an analyst with the Shosteck Group.
LockStream Corp. and Beep Science are two of the companies focused specifically on wireless digital rights management. They both offer products for carriers and handset makers to ensure that content providers’ copyrights can be protected-products they say also expand the wireless data business. It’s a tough trail to tread.
“We have focused initially on wireless networks,” said Michael Karp, vice president of LockStream. “What we’ve seen in the past four to six months is more interest in the products.”
Karp said LockStream’s technology is in several mobile phones today, and that a carrier in Europe is working to deploy the company’s products. He declined to provide further information. Karp said an effective DRM solution can open up a variety of new business models for wireless.
For example, he said, under a flexible DRM platform users could forward their favorite ring tones on to friends, who would then be prompted to purchase the ring tones themselves. Such a situation is called superdistribution and would promote additional carrier revenues. Other types of advanced DRM services would allow users to subscribe to a specific genre of songs, or be able to transfer a piece of content like a photo from a mobile phone to a computer. None of these applications is possible under current DRM service standards.
LockStream and Beep Science are not alone. There is a range of companies offering digital rights software for Internet content providers, but the market for such technology is tight. The most notable DRM Internet player, InterTrust, was forced to cut 70 percent of its work force last year and was shortly thereafter acquired by Sony Corp. of America and Royal Philips Electronics N.V.
A variety of wireless players also dabble in digital rights issues. Qualcomm Inc. includes DRM protections in its BREW application download service. Sprint PCS operates what it calls a content vault, which the carrier said protects content providers’ copyrights. LightSurf Technologies Inc. has installed DRM protections in its picture messaging software. And application and messaging company Ztango Inc. has developed a ring tone “gifting” application, which addresses DRM issues by allowing users to pay for ring tones and then pass them on as gifts to friends.
However, developing advanced DRM services-and thereby encouraging new business models-is only possible through the cooperation of a number of wireless players, from carriers to handset makers to content providers. The technology itself is not necessarily a difficult issue, it’s getting all of the parts of the value chain to agree on how to go forward.
“It’s a very solvable technology problem,” said the Shosteck Group’s Luhr. “But you’ve got to get people to use it.”
The Open Mobile Alliance has also recognized copyright protection and digital rights management as one of the few key wireless issues requiring quick action. The group, formed last year, is an umbrella standards body for the wireless industry and sets requirements for service platforms and architectures. It released its first DRM guidelines late last year, and covered rules for forwarding content to other users and limits for access to content. However, such guidelines cover only the basic requirements for DRM, and in future revisions the OMA will have to confront copyright protection issues for pictures, video and other advanced applications.
An interesting side note to the OMA’s guidelines involves the programming language that forms the basis for the group’s rules. The OMA standardized on the Open Digital Rights Language, which Nokia Corp., Samsung Electronics Co. Ltd. and others support. The OMA ignored the XrML language for digital rights, which Microsoft Corp. promotes through its interest in XrML company ContentGuard.
Luhr said many in the industry will likely wait for more standardization to settle into place before testing the bounds of copyright protection. Such a waiting game could force DRM players like LockStream and Beep Science out of the market, he said.
Aside from technology issues and DRM standards, Luhr said the real concern for wireless needs to be the user experience.
“If you want users to accept it, you need to give users a reason to accept it,” he said.
Luhr said most DRM products focus on limiting what users can do with copyrighted content and applications. Such limitations spur users to look for ways around the rules, much like Internet surfers did with music-sharing Napster software. To avoid such hacking, wireless companies need to find ways to encourage users to pay for content while at the same time making it difficult to get around DRM protections.
“Right now it’s all about restricting the user,” Luhr said. “What you’re doing is encouraging hacking.”
The courts have also jumped into the digital rights management debate. Last month two key rulings appeared to go in opposite directions.
In one, U.S. District Judge Stephen V. Wilson said that Grokster-a file-sharing service similar to the now-defunct Napster-could continue to operate despite objections from the entertainment industry that Grokster violates its copyrights.
In the other case, U.S. District Judge John Bates said that Verizon Communications Inc. was required to turn over its subscriber information to the Recording Industry Association of America. Bates immediately issued a stay and the U.S. Court of Appeals for the District of Columbia Circuit has further temporarily stayed Bates’ order.
This was the second time that Bates had ruled in favor of RIAA. The D.C. Circuit has set oral argument in Verizon’s original appeal of Bates’ unfavorable ruling for Sept. 16.
Verizon believes it violates its customers’ privacy for it to turn over the information that RIAA seeks.
RCR Wireless News Washington D.C. Reporter Heather Forsgren Weaver contributed to this article.
