CoreMedia Interview: Multimedia and DRM - Part 2

By Alun Williams

Posted on 23 Nov 2005 at 10:29

With digital downloads remaining a big issues and Sony's DRM implementation in particular making headlines for the wrong reason, we have a timely interview with Dr. Willms Buhse, director products & marketing for CoreMedia, a company specialising in DRM systems.

In part one, the topics of discussion were music, Vodafone Live! and Microsoft. Here, we follow up with 3G, the wider issues of DRM, and the Sony XCP fiasco...

3G

Mobile DRM technology for 3G services is an important area for you, how is that market shaping up?

As a recent study of the EU-project INDICARE has shown, consumers set a high value on music they can share between different devices and they are willing to pay for that ability. The study says that consumers prefer paying €1 for a song that runs on any device over paying only 50 cents for a song that runs on only one device. So, it is all about convergence.

It is important for content owners and operators to offer their music services with cross platform capabilities, allowing their customers the choice of where to listen to purchased music. With the combination of OMA DRM and Microsoft DRM, CoreMedia is setting the pace as the leader for multi-DRM, with a strong commitment to open standards and interoperability.

What is the outlook for 3G content services - pickup has still been slow in the UK?

The future of 3G content services lies in new and innovative distribution concepts. Our system pioneers interoperable and innovative peer-to-peer business models such as gifting and viral marketing through superdistribution. The concept of superdistribution allows mobile operators and content providers to transform viral pass-along referrals and peer-to-peer networks into solid sales opportunities with true content revenue opportunities.

It enables consumers to recommend, forward and exchange content amongst each other, through cheap distribution channels. They also can receive rewards such as free minutes or bonus points - one can compare this mechanism with 'digital tupperware'.

Or one can compare it to shareware. But while shareware usually includes voluntary payment procedures, superdistribution has business rules, set by the content provider, that need to be adhered to. Superdistribution requires the standardization and interoperability of systems. Rather than compete, alliances can be formed that can turn this competition, which comes with high costs for competing enterprises, into a peaceful coexistence.

Still, 3G services are in the early days - also in the UK. But in Japan or Korea we can see that compelling services are well accepted by consumers.

DRM

Turning to the wider issues of DRM, in a recent survey we found that only 17 per cent of respondents perceived DRM as a form of copyright protection (which is its core function), which presumably means the remaining 83 per cent see it as a unique, additional constraint. Does DRM have an image problem?

One has to understand that DRM, apart from protecting the rights of the content owner, enables a new business models and gives customers security in the digital content world.

Digital content distribution allows new business and distribution models. In addition one can use a lot of viral mechanisms like peer-to-peer sharing. For example, a system that allows users to share music files with their friends. By creating copies for their friends they would be able to listen to it once. After listening to the songs they would get connected to the billing mechanism where they can decide to purchase it or not. If they decide to purchase the songs forwarded rewards such as free minutes or bonus points would be credited to the original user. This is a very interesting mechanism for creating a new sales channel for digital products such as music.