Digital Rights Management - conditions for success

SUMMARY

Protecting the rights to intellectual property and digital content, whether distributed via a physical (CD, DVD) or virtual medium (telecommunications and distribution networks) lies at the heart of a battle whose outcome will have implications for all players.

Digital distribution and protection against unauthorised copying

• Usages have moved into the digital era: copying, transferring, recording, handling, exchanging etc.
• Are digital breaches that enable unrestricted content handling being eradicated?
• Is digital rights management a condition for the equitable development of the virtual content distribution market?
• Technical protection measures versus the right to private copying, or how to protect rights holders and consumers?

DRM offerings

• DRM market confronted by very diverse players' strategies.
• Will IT and consumer electronics players continue to pursue a strategy conflicting with rights holders' interests?
• DRM interoperability, a difficult target to achieve for some, a reality for the world of mobile telecommunications

Virtual distribution: challenges and opportunities

• The music sector, peer-to-peer's first victim, is now a pioneer in virtual content distribution.
• Ensuring effective content protection, a precondition to deploying virtual film distribution offerings.

Towards the co-existence of multiple models?

• The horizontal CD/DVD model combined with protection measures against copying.
• A vertical model related to pay television, video and music.
• The future of the MP3 model and of DIVX to some degree.
• Is a horizontal model linked to mobile telephony emerging?

TABLE OF CONTENTS

1. Technical protection and legal background 12

• 1.1. Technology update 12
  • 1.1.1. Technical protection measures (TPM 12
    • Cryptosystems 12
    • Watermarking and tattooing 17
    • Medium access management: the disc 18
  • 1.1.2. Digital Rights Management 20
    • Programming language: an indispensable standard 20
    • Copyright integration 23
    • Application of rights and management of digital copying of artistic works 28
• 1.2. Legal background 31
  • 1.2.1. The protection of artists and their works 31
    • "Artists' rights 31
    • Copyright 33
  • 1.2.2. International legal frameworks 35
    • WIPO (World Intellectual Property Organization) treaties 35
    • The Digital Millennium Copyright Act (DMCA) 37
    • The European Union Copyright Directive (EUCD 37

2. DRM players 39

• 2.1. Players present 39
  • 2.1.1. Content providers 39
  • 2.1.2. Technical protection measure (TPM) and DRM providers 40
  • 2.1.3. Rights aggregators or licence managers 40
  • 2.1.4. Distributors 41
  • 2.1.5. Consumer electronic manufacturers 41
  • 2.1.6. IT manufacturers 42
• 2.2. The value chain 43
• 2.3. Monographs 46
  • 2.3.1. Groups and consortia 46
    • Blu-Ray Disc Association 46
    • Content Reference Forum 48
    • Coral 50
    • OMA DRM 52
    • Trusted Computing Group 54
  • 2.3.2. Companies 56
    • Adobe Systems Incorporated 56
    • Beep Science 59
    • End2End 62
    • Info2clear 64
    • InterTrust Technologies Corporation 68
    • Macrovision 71
    • Microsoft 76
    • New Digital System (NDS) 80
    • Overdrive 83
    • Philips Electronics 85
    • Real Networks 88
    • RSA Security 91
    • SealedMedia Inc 94
    • SunnComm 98
    • VeriSign 100
• 2.4. Overview 102
  • 2.4.1. Industry players' solutions 102
  • 2.4.2. The activity of consortia 103

3. Analysis and outlook for content distribution 105

• 3.1. Usages and the market 105
  • 3.1.1. New forms of cultural goods consumption 105
    • The emergence of digital usages 105
    • The age of nomadic usage and mobility 105
    • Digital entertainment and mobile devices 107
  • 3.1.2. The case of the virtual music distribution market 110
    • Forms of market structure 110
    • Composition of the offering 110
    • The business model 111
    • Legal distribution on a peer-to-peer basis 112
  • 3.1.3. Other virtual distribution markets 118
    • Virtual video games distribution: a slow take-off 118
    • Virtual distribution: the missing major 119
• 3.2. DRM and content distribution, a key coupling 122
  • 3.2.1. Players' strategy: service, DRM and codecs 122
    • DRM at the heart of virtual distribution strategies 122
    • DRM interoperability: industry incompatibility! 123
    • Are codecs and DRM indissociables 125
    • Various rights 125
    • Functioning of the iTunes Music Store protection system 128
  • 3.2.2. The case of the mobile telephone 128
  • 3.2.3. Audiovisual programme protection and rights management 129
    • Access control and domestic networks 129
    • The broadcast flag 131
    • The protection technologies listed below had been registered with and approved by
    • the FCC in August 2004: 133
• 3.3. Outlook and stakes 133
  • 3.3.1. Stakes for users 133
    • Accepting DRM 133
    • The end of private copying 134
    • Interoperability 134
    • A regulatory body for new usages 134
  • 3.3.2. The stakes for content providers 135
    • Solvency of demand 135
    • Not abandoning content distribution 135
    • Consolidating a favourable business model 135
    • Rethinking or transposing a commercial policy to fixed or mobile internet 135
    • Rethinking or retaining media chronology 135
  • 3.3.3. Stakes for technology providers 136
    • Proving the effectiveness of existing offerings 136
    • Developing a distribution activity 136
    • Adapting DRM systems to new, nomadic usages 136
  • 3.3.4. Stakes for online retailers/distributors 136
    • Making existing offerings profitable 136
    • Optical medium versus virtualization 136
    • DRM interoperability 136
  • 3.3.5. What are the stakes for consumer electronics? 137
    • Implications related to the incorporation of TPMs in equipment 137
    • Industry organisations 137

List of illustrations

• Table 1: CSS 16
• Table 2: Examples of security system implementation 28
• Table 3: Comparison of two theoretical models 34
• Table 4: Online and offline hardware solutions 102
• Table 5: Software solutions 102
• Table 6: Destination of solutions 103
• Table 7: Summarising table on consortia 104
• Table 8: Consortia and rights description languages 104
• Table 9: Example of revenue breakdown in France 111
• Table 10: Major online music distribution offerings 114
• Table 11: Main online music distribution offerings in the major markets 117
• Table 12: Examples of video on demand services based on film scheduling 121
• Table 13: Major audio codecs 125
• Table 14: Main services and their content management 126
• Table 15: Microsoft system: rights related to file reading 127
• Table 16: Microsoft system: expiry of licence to operating rights 127
• Table 17: Microsoft system: rights security 127
• Table 18: Content protection technologies registered with the FCC 133

List of figures

• Figure 1: Horizontal DRM 21
• Figure 2: Vertical DRM 22
• Figure 3: Smartright system architecture 30
• Figure 4: OD2 distribution infrastructure 43
• Figure 5: Evolution of the music value chain 45
• Figure 6: Examples of multimedia mobile telephones 108
• Figure 7: Physical and digital disc distribution 111
• Figure 8: Wippit protection system 112
• Figure 9: Kryptomusic distribution system 113
• Figure 10: Media chronology in France 120
• Figure 11: Purple DRM architecture 130
• Figure 12: Access control architecture 130