An Open and Shut Case: ABI Research on the Future of Digital Rights Management

At issue are proprietary versus `open` digital rights management (DRM) technologies, and whether governments should get involved.

Oyster Bay, NY - April 14, 2005 - When the US Congressional Subcommittee on Courts, the Internet and Intellectual property invited testimony from four industry experts this week, they were considering nothing less than the future of digital rights management in the United States.

At issue are proprietary versus "open" digital rights management (DRM) technologies, and whether governments should get involved. "We're at a very interesting crossroads right now," says Vamsi Sistla, ABI Research's director of residential entertainment technologies. "Congress and industry leaders are having a healthy debate about the future course of action."

ABI Research has published a study, Conditional Access & Digital Rights Management, which offers comprehensive data on the penetration of emerging conditional access and digital rights management technologies.

Consider the iTunes/iPod example. Apple gambled on a pay -per -song downloadable music model, wrapping the music files in a proprietary DRM format called FairPlay. Apple now enjoys at least 80% market share in this space.

Advocates say that open DRM standards would help the portable industry. Most industry leaders are adopting a "government hands off" attitude, but Sistla feels that other attempts at proprietary DRM schemes probably wouldn't succeed. "Apple were the first to offer such a service and the content industry didn't care if their DRM was proprietary. But DRM becomes critical once video, and sharing between STBs and portable devices, become a reality." Video's arrival in the handset is covered in a new ABI Research study, "Mobile Broadcast Video."

But he adds that open standards and licensing fees are a much bigger issue in mobile communications than in the portable industry. "There are over 1.7 billion handset users out there, so you need to have some open standard to make it easy for content owners to forge relationships with service providers, equipment vendors and IC manufacturers. If proprietary standards remain, the industry will suffer from the added expense."

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. For more information please visit, or call 516.624.2500.

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