Vendors look to tame DRM standards with Coral

Six large technology and music companies have banded together in an attempt to bring some interoperability to the digital rights management (DRM) systems protecting digital content such as music and movies within the next nine months.

HP, Sony, Philips Electronics, Matsushita Electric Industrial, Samsung Electronics, InterTrust Technologies and News's Twentieth Century Fox Film have joined the Coral Consortium, which will seek to establish a framework -- or as the group describes it, a new technology layer -- to allow consumers to play digital audio and video content regardless of the service provider or the device.

But notably absent from the list of Coral members are three of the market's biggest players: Microsoft, RealNetworks and Apple Computer, which produces the iPod and iTunes Music Store, the market's dominant digital music player and online music service, respectively.

Though establishing a group seeking interoperability is an important first step, compatibility between DRM systems isn't going to happen any time soon, according to senior analyst with Jupiter Research, Mark Mulligan.

"What could Apple have to gain by making iPod and iTunes interoperable with other devices and content on the market? A symbiotic relationship is absolutely essential for Apple to sell its iPod device, which is very important to the company now. Selling and organising music through iTunes is more of a value-add for selling iPod," he said.

Apple's FairPlay system does not support the DRM technology used by other services, like Microsoft's Windows Media Audio and RealNetworks' Helix technology. In July, against Apple's wishes and amid threats of legal action, RealNetworks released the beta version of its Harmony technology to enable users to play tracks on 70 music player devices, including iPod.

"On the supply side, there is widespread enthusiasm for interoperability," Mulligan said. "But there is resistance from Microsoft. I can understand that Microsoft and Apple don't want to concede any ground. Apple is very strong in the market with iPod but they do run the danger of becoming a trendy niche player -- much as Apple's operating system did against Windows and the PC -- if they don't pick the right time to become more open. Something will have to move."

Mulligan said a big consumer backlash would come against technology and music companies as the consumption of digital content became more mainstream. "I think such a backlash could come as early as the beginning of next year, when people start to try and use the iPods and other digital players they received at Christmas as presents, only to realise for the first time the constraints that exist. For example, that a lot of the music and video they already have can't be played on their new devices," he said.

The fact that Sony has joined Coral is a sign that changes are coming within the industry, Mulligan said. "Sony has traditionally been very closed, so this is quite a sea shift for them. But iPod has stolen a lot of Sony's traditional ground in the market, and Sony has realised that if they are going to creep towards the mainstream, they must have some interoperability."

When it comes to how interoperability actually comes into practice, the industry will most likely begin relying on cross-licensing agreements rather than an industry standard, which will then be followed by firmware updates for devices, Mulligan said.

Until that process begins, groups like Coral are also pushing for industry standards.

Though Microsoft, Apple and RealNetworks have not yet joined Coral, the door is open for them to do so, said Caroline Kamerbeek of Philips' intellectual property and standards division. "Philips hopes that as many companies as possible will join Coral because it is important to have many partners. The key to driving the market forward is interoperability and it is very important to the end user," she said.

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