The Return of DRM

Remember when digital-rights management was dead? Back in January 2009, Apple announced it would drop DRM from the iTunes catalog, putting the online music retailer on par with Amazon and other purveyors of open-MP3 files and effectively eliminating copy-protection from the digital music market.

In video, copy-protection on DVDs had long since become a joke, and efforts by Google (pre-YouTube acquisition) and Microsoft to create DRM-controlled video marketplaces that would compete with YouTube largely flopped. The handwriting seemed to be on the wall for the disappearance of DRM.

Yet it’s poised to make a major comeback, at least in video. Thanks to a recent regulatory win by the major studios and the rush to bring web-delivered video to the living-room HDTV set via Google TV, Boxee, Vudu and other platforms, copy restrictions could soon be a bigger part of TV viewing than ever.

The studios’ regulatory win came last month, when the Federal Communications Commission approved the Motion Picture Association of America’s long-pending petition to allow the use of selectable output control flags for video-on-demand movies released in a new early, premium window immediately following their theatrical runs. The flags will let studios remotely disable the analog outputs on cable set-top boxes or other devices used to receive the VOD transmissions. The aim is to restrict the output of the movies exclusively to digital connectors that support High-bandwidth Digital Content Protection (HDCP) so they cannot be copied “in the clear” and redistributed over the Internet.

Although the FCC’s ruling purports to limit the use of SOC flags only to early-release VOD showings, many of its critics believe it will turn out to be the proverbial camel’s nose under the tent and will ultimately lead to wider use of copy restrictions. At any rate, it establishes a precedent the studios are sure to follow of making new forms of TV available contingent on copy-protection.

The nascent business of IP delivery of video to the TV is also developing with a significant DRM component to it. Google TV, for instance, is based on Adobe’s Flash 10.1 streaming platform, which includes multiple layers of DRM, including a native encryption system, an API that lets content owners hook onto an external DRM and, significantly, support for selectable output controls.

Embedded streaming video platform Vudu, recently acquired by Wal-Mart, also supports encryption and output controls. Sonic Solutions, which has a long history of supporting studio efforts to preserve, protect and defend DRM, recently acquired streaming video platform provider DivX, which will ensure that devices featuring the embedded DivX TV service will support DRM as well. Boxee, like Google TV, relies on Flash 10.1 to support streaming video, which means DRM.

Why are streaming video platform providers being so solicitous of the studios’ and networks’ DRM obsession? Two main reasons. First, unlike many IT companies and tech startups, the consumer electronics companies making the connected TVs, Blu-ray players and set-top boxes on which over-the-top video delivery depends have a long history of working cooperatively with studios to develop and implement digital-rights management technology, going back at least to Macrovision and the VCR. Building support for DRM into their devices has long been part of their culture and cost structure.

Second, the streaming platform providers are competing with long-established businesses as they try to carve out new release windows and distribution channels for video content, giving content owners considerable leverage to put conditions on access to programming, such as support for copy-protection.

To be sure, not all of the video content accessible through the new platforms will be copy protected. User-created YouTube videos are the same whether accessed through Boxee or Firefox. But as more of the content people view on their TV is accessed on demand through digital platforms, DRM is going to play an ever-greater role in how and what we watch.

Question of the week

Will DRM slow consumer adoption of streaming video in the living room?
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Paul Sweeting

Principal Concurrent Media Strategies

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