DRM to Go: Protecting Mobile Content

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Mobile content has made Anders Andersson a lucky man. An avid fan of the 2004 Summer Olympic Games in Athens, he was worried that his day job and long hours would prevent him from watching track and field events and following his favorite Swedish athlete Carolina Klüft, who competes in the heptathlon and long jump events. But TeliaSonera, the leading telecommunications provider in the Nordic-Baltic region, has come up with solution that will allow Andersson to keep up with coverage—even on the bus to work. It has rolled out Sweden's first large-scale mobile television broadcast service, allowing Andersson—and thousands like him—to watch the Olympics anywhere, anytime on a 3G-enabled handset for free.

In neighboring Finland, TeliaSonera has launched a service designed to change the way users listen to—and interact with—music. In June, it became the first operator in Europe to "air" Sony's StreamMan. The mobile service allows users with Nokia 6600 and Ericsson P800 and P900 smartphones to listen to music, create playlists, and share their experience with friends.

TeliaSonera is one of a growing number of mobile access providers making the transformation from network operator to broadcast operator. Eden Zoller, a research director at Ovum in the U.K., keeps a sharp eye on this shift. "People don't like missing their favorite TV shows and will use mobile to catch up," she says. Moreover, the perfect fit between mobile and music—as demonstrated by the growing popularity of portable playback devices—gives service providers good reason to fine-tune their mobile music offerings to include video clips, music downloads, and artist updates. But there's a catch. Previously, mobile content—ringtones, screen savers, and logos—was mass market and low value. So a primitive forward-lock feature on mobile phones that prevented most mobile users from passing content among peers was deemed satisfactory, and many top-name content owners went along with the scheme. Today, the distribution of rich multimedia content such as music downloads and video clips mandates a much more stringent approach to digital rights management (DRM).

"DRM is essential to create a sustainable multimedia content offering online and on the mobile," observes Paul Jackson, a senior analyst with Forrester Research in Amsterdam. If operators want to deliver premium content, he argues, they will need to satisfy content owners' requirements to control and charge for that content. At the same time, DRM will have to bend to users' demands for a content service that allows them to have the freedom to use their content as they like. That includes the ability to access it, port it, and distribute it across a number of devices and platforms.

And that's where the DRM dilemma begins.

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Once the nightmare of the content owner community, super-distribution is now seen as the business model that can bring fresh ideas—and new revenue streams—to the worldwide recording industry. As of this writing and if tests are successful, EMI is slated to become the first record label to launch a trial of super-distribution, enabling users to send music tracks to others legally. EMI says this is "currently planned for Q1 2005. The trial with an unnamed U.K. mobile operator marks the first serious effort by a music company to cash in on the viral potential of mobile music. The service allows users to send songs to their peers, who will then be able to preview a track several times to decide if they wish to buy it. A DRM wrapper on the content will cause the track to expire and disappear from the device if not purchased within a set time frame.

The download service is being driven jointly by Ted Cohen, EMI Music's SVP for digital development and distribution, and EMI's U.K. Digital Team, headed up by Doug Lucas, VP, business development. Widely regarded as the "pope of digital music," Cohen admits no DRM scheme is bulletproof, but that's no reason for content owners to pass up on the opportunity to distribute their content over wireless. "We need to make music available now. If we embrace it early and get people used to paying for [music content] early as well, then we have a business model," Cohen explains.

He flatly disagrees with restrictive DRM schemes that treat users like potential criminals. "We have to craft consumer behavior, not blunt it," he argues. "P2P isn't a bad thing—unless it's uncompensated." Unlike many of his peers, Cohen also supports the ability of users to access music content across platforms and devices. "Whether it's PC to phone, phone to PC, or a mix is irrelevant. When users pay for music content, their experience should be fluid and they should be able to move the music around freely in their ecosystem—as long as that ecosystem isn't a dormitory or zip code." Cohen is currently considering several DRM solutions and approaches to make super-distribution pay off for providers and users. One model would reward users who turn their friends on to music with points that they could trade in for more music—or even cash. "If someone is a music evangelist and spreads the word about how good a certain song is, then he should get something in return," Cohen says. But no matter what DRM schemes should emerge over the next months, his message to his industry peers remains the same: "Be proactive about mobile and get on board!"

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