The GSM Association once again blasted proposed rates for licensing anti-piracy technology, calling recently revised rates “unreasonable and unworkable.”
The trade association of more than 600 wireless operators rejected the latest royalties proposal from licensing clearinghouse MPEG LA for digital rights management (DRM) software. MPEG LA’s most recent plan called for phone manufacturers to pay 65 cents per device and for operators to pay 25 cents per mobile subscriber per year for the technology.
The licensing authority lowered its rates last month after the GSMA and other industry groups balked at its initial proposal of $1 per device for manufacturers and 1 percent of every transaction for carriers. But wireless operators say even the lowered proposed royalties threaten the economic viability of the industry they are designed to protect.
While an agreement between the two is likely on the horizon, some fear the stalemate could result in the lack of a standardized DRM solution. Carriers and content providers could adopt proprietary technologies, fragmenting the digital content industry.
“It is essential that the industry adopts a unified approach to digital rights management,” said Alan Harper, strategy director for Vodafone Group. “We are extremely disappointed that MPEG LA has not responded appropriately to the scale of opportunity that the industry has before it to nurture and grow the mobile content market to achieve its full potential. It is therefore essential the GSMA’s DRM review process continues until a practical solution is found.”
Earlier this year, MPEG Vice President Lawrence Horn said the backlash over proposed royalties speaks to how important an open-standard DRM technology is to the market.
“This is an enabling technology,” Horn said. “It enables new revenue streams to be produced.”
Indeed, a new report from frost & Sullivan Wednesday found the demand for mobile video services will explode over the next several years, creating a demand for a simplified intellectual property rights management for wireless video content.
The study said video is likely to become “the mainstay” of 3G wireless services in the United States, becoming a $1.5 billion market by 2009. As demand for wireless video surges, though, carriers and content providers will find digital rights management issues increasingly more difficult to manage, the report warned.
“While the whole rights issue is not a deterrent in itself, the industry can surely benefit from the presence of a single organization that could act as a clearinghouse for mobile video rights clearance,” said Vikrant Gandhi, a Frost & Sullivan industry analyst. “This presents an opportunity for organizations to specialize in such clearance.”
