Slide 1




             The Trajectory of DRM Technologies:
                  Past, Present, and Future
                 ...
Slide 2


                                                      Outline

                         How DRM technologies de...
Slide 3




                             How DRM Technologies
                                  Developed




    © 2009
 ...
Slide 4


                  The Birth of DRM: Mid-1990s

     Conference: Technological Strategies for Protecting Intelle...
Slide 5


                                             Early Technologies

          CD-ROM Protection (mid-90s)          ...
Slide 6


                                               Early Technologies

                                       1998  ...
Slide 7


                                   How Were These Sold?

          Legal dept: Make the Internet safe for your ...
Slide 8


                                            What Happened?

          Bubble burst
          Content owners wo...
Slide 9


                           Second Bubble ca. 2005:
                                   Mobile
                   ...
Slide 10

             A Pseudo-Scientific DRM Market Barometer:
                   Vendors on Trade Show Floors
         ...
Slide 11


                                 The DRM Scene Today:
                                        Music
           ...
Slide 12


                              The DRM Scene Today:
                                     Video
                 ...
Slide 13


                               The DRM Scene Today:
                                     E-Books
             ...
Slide 14


                                 The DRM Scene Today:
                                      Enterprise
       ...
Slide 15


           Pioneering DRMs that Didn’t Survive

                                            Intertrust
       ...
Slide 16


              Larry Lessig’s Four Factors*

                                           Architecture (technolog...
Slide 17


                                                 Architecture

                  Technology Enablers           ...
Slide 18


                                                  Norms

                    Sources of Norms                  ...
Slide 19


                                                Law

                        Laws                              ...
Slide 20


                                                 Market

                    Economic Factors                  ...
Slide 21


                Factors Against DRM Success

             Market:
               – Economic incentives misalig...
Slide 22


               Economic Incentives Misaligned

     Content owners demand it but will not pay for it
         ...
Slide 23


     Consumers Don’t See Value in Choices
                 of Offers
     Expensive to educate consumers about...
Slide 24


           Users Influenced towards Infringing
                        Behavior
    Definition of DRM commande...
Slide 25


           Technological Innovation Hampered

             Lack of revenue for DRM vendors
             Ventu...
Slide 26


                    Laws Not Amenable to
                 Technological Implementation
       Fair Use/Fair De...
Slide 27


                                        A Few Success Stories

                      Apple FairPlay            ...
Slide 28


                                       A Few Success Stories

             OverDrive E-Book Lending            ...
Slide 29


           Status of Rights Technologies Today

                                            File encryption
  ...
Slide 30


                                            Encryption

             Crypto algorithms were never an issue
   ...
Slide 31


                                      License Management

                                           Flexibili...
Slide 32


                     Rights Specifications/RELs

    Technology applicable outside of encryption
    Complex ...
Slide 33




                                           Future Possibilities




    © 2009
             GiantSteps       ...
Slide 34


                                           Grow from Simplicity

    Emulation of legacy models is doomed to f...
Slide 35


                                    UGC Will Lead the Way

            YouTube, DailyMotion, Flickr, Scribd, M...
Slide 36


                  Bet on These Technologies

                           Rights languages
                     ...
Slide 37


                                                Rights Languages

    Creative Commons
             – When ser...
Slide 38


                                          Content Identification

                      Fingerprinting         ...
Slide 39


             Connected Devices and Streaming

           License management becomes much easier
              ...
Slide 40


                      Will Classic DRM Survive?

             Yes, where it supports new content models
      ...
Slide 41




                                                        Bill Rosenblatt
                                     ...
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The Trajectory Of DRM Technologies

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Keynote presentation at ODRL/Virtual Goods Workshop, September 2009, Nancy, France. Discussion of the past, present, and future of DRM and other rights technologies. Evaluation of DRM according to the four factors from Lawrence Lessig's book "Code and Other Laws of Cyberspace". Predictions of whether "classic DRM" has a future.

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The Trajectory Of DRM Technologies

  1. 1. Slide 1 The Trajectory of DRM Technologies: Past, Present, and Future Bill Rosenblatt GiantSteps Media Technology Strategies +1 212 956 1045 billr@giantstepsmts.com www.giantstepsmts.com © 2009 GiantSteps 1 Media Technology Strategies
  2. 2. Slide 2 Outline How DRM technologies developed Factors influencing their evolution – Lessig’s 4 factors The current state Possibilities for the future © 2009 GiantSteps 2 Media Technology Strategies
  3. 3. Slide 3 How DRM Technologies Developed © 2009 GiantSteps 3 Media Technology Strategies
  4. 4. Slide 4 The Birth of DRM: Mid-1990s  Conference: Technological Strategies for Protecting Intellectual Property in the Networked Multimedia Environment, late 1993, Washington DC – Sponsored by Coalition for Networked Information, Interactive Multimedia Association, MIT, and Harvard Kennedy School of Government  White Paper: Mark Stefik, Xerox PARC, Letting Loose the Light: Igniting Commerce in Electronic Publication, 1994 – Appears as chapter in Internet Dreams, MIT Press, 1996  First important patent applications filed © 2009 GiantSteps 4 Media Technology Strategies
  5. 5. Slide 5 Early Technologies CD-ROM Protection (mid-90s) 1996-1997  CD-MAX  DeskGate  CrypKey  Digital River  InfoSafe  IBM Cryptolope  TestDrive  EPR/InterTrust DigiBox  TTR  Liquid Audio  ZipLock (Portland Software) © 2009 GiantSteps 5 Media Technology Strategies
  6. 6. Slide 6 Early Technologies 1998 1999  DMOD  Alchemedia  FileOpen  Authentica (now EMC)  Greenleaf  ContentGuard (Xerox)  MediaDNA  Infraworks (now Liquid  NetQuartz Machines)  Phocis  NetActive  Preview Systems  Perimele  RightsMarket (TragoeS)  PublishOne  Softlock  SDC (now Packet Video)  ViaTech  VYou © 2009 GiantSteps 6 Media Technology Strategies
  7. 7. Slide 7 How Were These Sold? Legal dept: Make the Internet safe for your content – Print documents -> protected PDFs – CDs -> digital music files Marketing: Enable new business models for content – Pay per view – Subscription – Site licenses © 2009 GiantSteps 7 Media Technology Strategies
  8. 8. Slide 8 What Happened? Bubble burst Content owners would not pay, and/or vendors charged too much Business models were not developed or marketed DRM became subsidiary to platform control (formats, codecs, players) © 2009 GiantSteps 8 Media Technology Strategies
  9. 9. Slide 9 Second Bubble ca. 2005: Mobile OMA DRM Others  CoreMedia  SDC  Viaccess  Melodeo  Beep Science  Teruten  Lockstream/Irdeto  INKA (Netsync)  Access  NDS  Discretix  Etc. © 2009 GiantSteps 9 Media Technology Strategies
  10. 10. Slide 10 A Pseudo-Scientific DRM Market Barometer: Vendors on Trade Show Floors 16 14 12 10 8 6 4 2 0 1h99 2h99 1h00 2h00 1h01 2h01 1h02 2h02 … 1h04 2h04 2h05 … 2h07 © 2009 GiantSteps 10 Media Technology Strategies
  11. 11. Slide 11 The DRM Scene Today: Music Internet: DRM confined to subscription services – E.g. Napster, Rhapsody – DRMs: mostly Microsoft WM DRM 10/11 Mobile: various DRM-based models – Device/music bundles: Nokia Comes With Music, Sony Ericsson PlayNow Plus – Subscription models – Paid downloads – DRMs: OMA DRM, Microsoft WM DRM, Microsoft PlayReady, SDC © 2009 GiantSteps 11 Media Technology Strategies
  12. 12. Slide 12 The DRM Scene Today: Video  Internet: download and rental services – Apple iTunes: FairPlay – Blockbuster, CinemaNow, others: WM DRM  Mobile: digital broadcast, WiFi – OMA BCAST Profile  IPTV, TelcoTV, Digital Cable – CA vendors (Irdeto, Nagra, NDS, etc.) – Marlin – Widevine – Verimatrix – SecureMedia © 2009 GiantSteps 12 Media Technology Strategies
  13. 13. Slide 13 The DRM Scene Today: E-Books  Amazon – Mobipocket DRM – Kindle, iPhone, other portables  EReader – Partnership with Barnes & Noble, #1 US book retailer – Proprietary DRM – PC, Mac, iPhone, other portables  Adobe – Sony, IREX, Plastic Logic, other e-book devices – Content Server DRM – PC, Mac, iPhone © 2009 GiantSteps 13 Media Technology Strategies
  14. 14. Slide 14 The DRM Scene Today: Enterprise Corporate/institutional applications Became a distinct subfield in ~2003 Now considered part of Content Management market Leading vendors: – Microsoft & partners – EMC (Authentica) – Oracle (SealedMedia) – Adobe © 2009 GiantSteps 14 Media Technology Strategies
  15. 15. Slide 15 Pioneering DRMs that Didn’t Survive Intertrust – Digibox/InterRightsPoint – RightsSystem IBM – infoMarket – EMMS © 2009 GiantSteps 15 Media Technology Strategies
  16. 16. Slide 16 Larry Lessig’s Four Factors* Architecture (technology) Norms (behaviors) Law Market (economics) *Code and Other Laws of Cyberspace, 1999, pp. 88-90 © 2009 GiantSteps 16 Media Technology Strategies
  17. 17. Slide 17 Architecture Technology Enablers Criteria  File encryption  Ease of use  Network connectivity &  Maintenance of user rights & bandwidth expectations  License management  Security effectiveness  Rule specifications & RELs  Low support costs © 2009 GiantSteps 17 Media Technology Strategies
  18. 18. Slide 18 Norms Sources of Norms Criteria  Popular online tool usage  Necessity of DRM in the first patterns place  Trust  Height of barriers  Opinions of thought leaders  Motivations of hackers © 2009 GiantSteps 18 Media Technology Strategies
  19. 19. Slide 19 Law Laws Criteria  Copyright infringement liability  Technological implementability  Content usage rights  User comprehensibility  Anticircumvention  Balance of burden  Effect on legitimate uses of technology and innovation © 2009 GiantSteps 19 Media Technology Strategies
  20. 20. Slide 20 Market Economic Factors Criteria  Compensation for content  Alignment of economic creators incentives  Investment in technology  Maximization of value to development and R&D consumer through alternative  Consumer value and choice offers  The pull of free  Maximization of value to publisher despite alternative sources © 2009 GiantSteps 20 Media Technology Strategies
  21. 21. Slide 21 Factors Against DRM Success Market: – Economic incentives misaligned Norms: – Users don’t see value in choices of offers – Norms distorted by architecture (technology) Architecture: – Technological innovation hampered Laws: – Laws not amenable to technological implementation © 2009 GiantSteps 21 Media Technology Strategies
  22. 22. Slide 22 Economic Incentives Misaligned Content owners demand it but will not pay for it – Despite high expenditures on “anti-piracy services” – Claim that content protection is responsibility of technology vendors who want to offer access to their content CE vendors use it to suit their own purposes – Platform lock-in Consumers have no direct say in deliberations – Only indirect market forces In the end, music companies got what they paid for © 2009 GiantSteps 22 Media Technology Strategies
  23. 23. Slide 23 Consumers Don’t See Value in Choices of Offers Expensive to educate consumers about unfamiliar offerings – Apple had huge marketing budget to educate about unbundled albums – But Rhapsody, Napster, etc. didn’t educate sufficiently about subscription services Focus is on getting rights equivalent to offline content – Perception: pay == ownership && free == radio; therefore the only improvement is free == ownership © 2009 GiantSteps 23 Media Technology Strategies
  24. 24. Slide 24 Users Influenced towards Infringing Behavior Definition of DRM commandeered by the press – Narrower than original definitions – Yet broadened to apply to any technology that restricts user behavior in any way Notion that DRM == Big Media == evil Romanticism & rationalization of hacker/pirate ethic © 2009 GiantSteps 24 Media Technology Strategies
  25. 25. Slide 25 Technological Innovation Hampered Lack of revenue for DRM vendors Venture capital scared off – Bad press – Non-sexy topic Researchers scared off – RIAA actions against Prof. Ed Felten in 1999 – DRM research “politically incorrect” in US © 2009 GiantSteps 25 Media Technology Strategies
  26. 26. Slide 26 Laws Not Amenable to Technological Implementation  Fair Use/Fair Deailing laws notoriously hard to automate – EU Private Copying less so  Privacy and due process are important but become obstacles – French Loi HADOPI  Anticircumvention laws reduce incentive to develop effective technologies – 1993-6 accommodation between content and telecoms industries – WIPO Copyright Treaty, EU Copyright Directive, US DMCA – Liability solely on the hacker – Important US appeals court case: Universal v. Reimerdes, 2000 © 2009 GiantSteps 26 Media Technology Strategies
  27. 27. Slide 27 A Few Success Stories Apple FairPlay Pay TV Digital CAS  “Cheap and dirty” DRM  Cable operators want to protect  Component in first successful signals from theft digital music application  “Walled garden” systems  Educated consumers about (no PCs) unbundling of albums  Limited alternatives  Tightly tied to hardware and  Lesson: software, no boundary glitches Alignment of economic  Lesson: incentives Hardware vendor discovers how to benefit from DRM © 2009 GiantSteps 27 Media Technology Strategies
  28. 28. Slide 28 A Few Success Stories OverDrive E-Book Lending AACS (Blu-ray)  Adobe Content Server supports e-  Designed to address problems book lending with CSS for DVDs  E-Book lending expands power of  Costlier DRM in costlier product library services despite lack of  Graceful hack recovery marketing ability  Impact of hacks overstated in  Small market well served by press single vendor, encourages  DVD industry forced to improve efficiency functionality  Lesson: True expansion of  Lesson: Better DRM costs more consumer choices through DRM money © 2009 GiantSteps 28 Media Technology Strategies
  29. 29. Slide 29 Status of Rights Technologies Today File encryption License management Rule specifications & RELs © 2009 GiantSteps 29 Media Technology Strategies
  30. 30. Slide 30 Encryption Crypto algorithms were never an issue Cost is the issue – Key management schemes – Hardware vs. software key storage Software key management has gotten better – Graceful failure e.g. AACS © 2009 GiantSteps 30 Media Technology Strategies
  31. 31. Slide 31 License Management Flexibility, yes Transparency, no © 2009 GiantSteps 31 Media Technology Strategies
  32. 32. Slide 32 Rights Specifications/RELs Technology applicable outside of encryption Complex starting point was probably necessary – Emulate offline/legacy licensing models But didn’t work – XrML designed by engineers for engineers Market needed time to find opportunities for simplicity – Remember ICE? Me neither. – Remember RSS? Of course. © 2009 GiantSteps 32 Media Technology Strategies
  33. 33. Slide 33 Future Possibilities © 2009 GiantSteps 33 Media Technology Strategies
  34. 34. Slide 34 Grow from Simplicity Emulation of legacy models is doomed to failure – Consumer expectations – Technological complexity – Misaligned economics New business models based on simpler technology can succeed – Create models to fit new opportunities – Build complexity from the ground up instead © 2009 GiantSteps 34 Media Technology Strategies
  35. 35. Slide 35 UGC Will Lead the Way  YouTube, DailyMotion, Flickr, Scribd, MySpace are the 0.X models  Volume dwarfs that of commercial content  UGC needs rights management too  Exposure is important, but so are monetization and use tracking  “Profit from abundance” is not inconsistent with rights management  Ultimately, “commercial content” = “marketing investment” © 2009 GiantSteps 35 Media Technology Strategies
  36. 36. Slide 36 Bet on These Technologies Rights languages Content identification Connected devices and streaming © 2009 GiantSteps 36 Media Technology Strategies
  37. 37. Slide 37 Rights Languages Creative Commons – When services use it to make money, it’s no longer a “religion” – Note how “free” became “open source” – Commercial content owners beginning to look at it seriously ODRL – Moving beyond encryption applications – Making all the right moves: subsetting, PLUS, CC © 2009 GiantSteps 37 Media Technology Strategies
  38. 38. Slide 38 Content Identification Fingerprinting Watermarking  Easy to implement now  Requires “connecting the dots”  Works with content “as is”  Requires insertion  Difficult at the ISP level  Easier at the ISP level  Poor integration with rights  Good integration with rights languages languages  Not much benefit from  Would benefit greatly from standardization standardization  Too many vendors, market ripe  Market has already for consolidation consolidated © 2009 GiantSteps 38 Media Technology Strategies
  39. 39. Slide 39 Connected Devices and Streaming License management becomes much easier – No slave device transfer issues Encryption becomes less disruptive Consumer expectations shift away from ownership – Services no longer devolve to “MP3 delivery” model © 2009 GiantSteps 39 Media Technology Strategies
  40. 40. Slide 40 Will Classic DRM Survive? Yes, where it supports new content models – Subscription – Personal network boundary setting – Hardware or service provider boundary setting © 2009 GiantSteps 40 Media Technology Strategies
  41. 41. Slide 41 Bill Rosenblatt GiantSteps Media Technology Strategies billr@giantstepsmts.com +1 212 956 1045 www.giantstepsmts.com © 2009 GiantSteps 41 Media Technology Strategies

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