Wednesday, August 27, 2008

Common Licensing Authority

Movie Labels (sic) To Launch New "Open Market" Play Anywhere Scheme As Last Ditch Effort To Save DRM

Here's a link to an idea Sony is pitching to help simplify delivery of DRM-protected rights. It's a media delivery concept that's been kicked around for a while: common licensing authority. The idea is that some transparent, neutral third party is authorized by content owners to supply rights (i.e. DRM licenses) to retailers' customers. The third party would ensure rights are delivered properly, and report to retailers and content owners on the number of licenses delivered. Content owners can then reconcile those numbers with reports from the retailers.

It's a fun idea in theory and similar schemes have been pitched to the music labels with no results, but it will never work for several reasons:

1. DRM is inherently customer unfriendly. Microsoft's disasterous marketing of its DRM and logo program (WM DRM, Janus, "Plays-for-Sure") shows that too much choice is actually a bad thing for the user experience. Unless you implement a seamless vertical like Apple/iTunes/iPod/Fairplay has, DRM ultimately gets in the way. DRM is not easy - not for customers, and not even for distributors. Content owners will continue use DRM as a crutch to remain lazy, anti-consumer, and kill innovative new distribution models.

2. A common licensing authority must be seen as a neutral player. It could be set up as a disinterested industry consortium, but if Sony is seen to be controlling it, distribution will be limited.

3. Licenses must work across platforms or consumer messaging will be prohibitively complex. This is not as easy as it sounds. The DRM must work the same on anything: Windows PCs, Mac PCs, Linux PCs, cable set-top boxes, DVRs, auotomotive entertainment systems, mobile phones and PDAs, portable devices, etc. The complexity matrix is daunting.

4. The DRM market is fractured. Microsoft won't license its DRM for Linux desktops. Apple won't license its DRM to anyone. 3rd party DRMs (like Macrovision's) have some support from the studios, but the market is too fractured. Macrovision is currently the only company positioned to offer a common DRM. Content owners are afraid of Microsoft, and would shy away from declaring its DRM as the standard.

5. Common rights will commoditize distributors who will reject the inability to leverage brand advantage. The alternatives, like charging more for additional rights or granting exclusive rights, will only increase the complexity of consumer messaging.

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