While the wireless industry haggles over the price of anti-piracy software supported by the Open Mobile Alliance, Microsoft Corp. is quietly gaining traction in the mobile world with its proprietary digital rights management technology.
The standoff continues between industry groups such as the GSM Association and MPEG LA, which holds patents for the OMA-supported DRM offering. The industry continues to balk at proposed royalties for the open-standard software, and GSMA recently said it has identified “several strong DRM supplier candidates” it could turn to should the negotiations with MPEG LA fall through.
“There’s so much discussion about the level of the cost for the (MPEG LA) license, people are trying to be creative,” said Han Weegink, the global development manager for LogicaCMG Wireless Networks, which supplies multimedia messaging service gear. “A lot of old ideas that have been discussed in the past are kind of being revised and get a second chance.”
Some of those ideas include fingerprinting technology that can send alerts when it is forwarded from one device to another, allowing carriers to automatically charge users for sharing files. Unlike the OMA offering, though, such alternatives are often difficult for consumers to grasp and can result in a rotten user experience.
But there’s little question the lack of standardized technology is beginning to take a toll on the nascent mobile content market, Weegink said. “There is content that has not been made available to mobile users because there is no (anti-piracy) solution in place,” Weegink explained. “That will become more and more of an issue in the future.”
While GSMA’s statement that it is considering other DRM vendors is partially a negotiating tactic, the possibility of non-OMA technologies being adopted while the bickering continues is real, analysts say. Such a move could lead to a fragmented market where content is locked down to one device or one carrier. Or it could lead to an alternative DRM that is accepted across a wide number of platforms and operators. Microsoft Corp. is likely the best positioned to capitalize on such an opportunity.
The software giant already has scored major wins in the digital music space for Windows Media DRM 10. The technology is used with Microsoft’s PlaysForSure, a consumer-facing software logo designed to allow users to match compatible music services and devices easily. A number of high-profile services like Napster, Yahoo! and Real have adopted PlaysForSure. And the company plans on making a bolder move into the mobile music market next year, when it will team with Nokia Corp. and Loudeye Corp.
“I think (the Nokia/Loudeye project) is an important step,” said Marcus Mathias, Microsoft’s product manager for Windows Digital Media. “We want to see content flow to consumers, and Windows is a great place to consume … and distribute content.”
The company’s wireless DRM footprint goes beyond music too. Its anti-piracy software is part of the Windows Media platform powering Verizon Wireless’ Vcast service, as well as a new mobile video offering being tested by Virgin Mobile in the United Kingdom. Crown Castle Mobile Media plan to use Windows Media DRM to protect content through its dedicated mobile TV network in the United States, slated to launch by the end of 2007.
As ubiquitous as Microsoft’s DRM may seem, though, most analysts believe the industry and MPEG LA will agree on a royalty structure and implement the OMA-supported DRM. A spokesman for the licensing authority last week said that while there was no news to report in the negotiations, “there may be an announcement shortly.”
An agreement probably would benefit the entire industry-even Microsoft, which is designing the Nokia/Loudeye music service to be compatible with OMA technology. Two major DRM players could provide adequate interoperability in a market that is neither segmented nor dominated by one provider. Such a scenario could avoid antitrust issues and the inflated prices that could come with a monopolized DRM market.
Even if MPEG LA and GSMA come to terms in the next few weeks, though, there are many issues left to be resolved in licensing digital content, Weegink warned.
“I expect, to some degree, a fight between interested parties as to who is going to run all of this; who is going to be in control,” Weegink said. “The big question is, who has the distribution rights? Who, in the end, is in control of granting licenses to use certain content?”
