Entertainment Firms Seeking Friendlier Rights Management.

Hoping to increase consumer sales, entertainment and technology companies are unveiling less-restrictive digital rights management (DRM) frameworks designed in part to combat unauthorized file-sharing services.

“Early DRM was designed to lock down consumers from doing certain things,” said Chris Parkerson, who helps promote DRM for software provider RSA Security, at the Digital Rights Management Strategies conference organized by Jupitermedia Corp. “Consumers don’t like to be locked down, especially when they can get the same content for free.”

To help reduce casual piracy, companies are releasing DRM technologies that will allow consumers — within limits– to burn downloaded digital files to compact discs and transfer them to portable devices. The right to transfer the files is included in the cost of the CD or digital file.

Bill Krepick, vice chairman of Macrovision Corp., said that by year end, at least two of the four major music labels plan to distribute most of new CD releases with content-protection technology that will limit the number of copies consumers can make with the CD.

“[DRM] technology can be flexible,” Krepick said. “The content owners can specify how many copies can be burned or how files can be transferred. It’s up to the content owner to determine how the technology is used.”

Similarly, consumers will be able to transfer protected versions of song files to a PC or a portable music player, but the files won’t work if uploaded to a peer-to-peer (P2P) file-sharing service.

“People are not interested in DRM as a technological end-all or be-all,” Krepick said. “Content [providers]view DRM as one piece of the digital distribution infrastructure. Companies aren’t simply interested in protection, Krepick said, but securely distributing content and making a profit from it.

In another approach, content providers are selling the rights to use digital music or video file files rather than selling files themselves. According to Stefan Roever, president and CEO of Navio Systems, consumers can purchase a license that allows them to download or transfer content to different devices.

“We’ve created what we call an ‘active voucher’ that allows consumers to play songs or share a version with friends,” Roever said. “They might download a song to their home computer, then stream it to their work computer or mobile phone. Because they’ve bought the rights, they can access the content where they want it.”

For instance, music label Sony BMG is offering a download of a Jessica Simpson video for $2.49. For 50 cents more, consumers get the digital song file.

Roever said companies are also experimenting with bundles that include songs, ring tones, cell-phone wallpapers and other content for about $5.

“There’s a strong up-sell opportunity to offering content in packages,” he said.

Because customers want to access content in a variety of settings, companies may offer packages that will include music files or movies formatted for different devices, said James W. Wendorf, vice president and senior manager of technology and standards for Philips Electronics, For instance, a DVD could contain a movie file for a full-screen TV, as well as a separate version formatted for a portable device.

“[Consumers] want to access content on their PCs and handsets, back it up and store it in libraries,” Wendorf said. “They feel that they own the content, and wonder why they can’t access it on any devices they own.”

The challenge remains getting consumers to pay for that access. Despite the Supreme Court ruling in late June that it was illegal for file-sharing companies to promote copyright infringement, entertainment and technology companies recognize that piracy is not going away. Instead, they’re trying to find a balance that’s acceptable to consumers between honest use and prohibiting widespread looting.

“There has to be a lot of flexibility associated with DRM,” said Keith Kocho, CEO of content-management and -delivery provider ExtendMedia. “People are used to consuming content broadly, and there has to be a lot of thinking about how the industry can package DRM so they understand it and can use it.”

The companies are also enlisting technology in the fight against unauthorized file-sharing. Macrovision’s Krepick described his company’s Hawkeye service, which distributes files purporting to be newly released songs.

“We basically flood P2P networks with decoy files,” Krepick said. “When consumers try to download a file, they’ll get a file that’s either blank or potentially has some promotional aspect that redirects them to a legitimate album purchase.”

If consumers find it difficult to steal music, the hope is that they’ll be more likely to purchase it.

To further discourage piracy, the Recording Industry Association of America announced on July 28 it had sued 765 consumers for alleged copyright infringement. Since Sept. 2003, the RIAA has filed 13,300 suits and settled nearly 2,900.

Another factor driving companies to simplify the restrictions DRM places on digital content is the relatively short lifespan of portable electronic devices.

Nicholas R. Givotovsky, founder and president of consulting firm Datasphere Interactive, said people are replacing digital music players and cell phones much more rapidly than they once upgraded stereo equipment. As a result, entertainment companies face resistance if they attempt to force consumers to buy separate copies of song files for each device.

“If consumers can take content with them, the incentive to use peer-to-peer networks will be reduced,” Givotovsky said. “People who have cartons of cassettes moldering in their attics feel justified in downloading that content for free.”

Companies are also looking for ways to make DRM systems interoperable, so a song file purchased from one music service can be easily mingled with files from another. ExtendMedia’s Kocho said because different music or video services have chosen proprietary protection frameworks, consumers are confused and frustrated about their rights.

“We have to avoid customers purchasing an asset and finding they can’t use it for technological or business reasons,” Kocho said. “When that happens, it’s a big blow to the industry.”

By Dave Pelland
Courtesy of http://www.kpmg.com