Time Warner (till recently AOL Time Warner !) has just bought from Xerox Corp, a significant stake in DRM - Digital Rights Management company ContentGuard, thus becoming an equal partner with Microsoft. Incidentally, ContentGuard was one of many "new age" companies spawned by Xerox. (Like Gyricon which has invented Electronic Reusable Paper.)

ContentGuard is the 2nd major DRM firm to be "taken over" by a group comprising of media major. A year ago, another group led by media major Sony Corp took over DRM firm InterTrust. Industry observers view these developments as the turning point for the next digital media revolution - namely digital distribution of content.

E-Commerce & DRM
If it were possible to walk into a shop and take what you want without paying, then commerce would cease to exist. If you are allowed to do the same on the web, then e-commerce will never come of age.

The Internet along with digital content are making the existing rights-acquisition model outdated. There is a need to replace the existing model with one based on a "rights-tracking database". Welcome to the world of DRM !

DRM is designed to give content owners an effective tool for distributing their digital content over the Internet with far more flexibility than the existing copy-protection systems. Of course, content includes everything from simple data to multimedia files to complex algorithms which access multiple databases.

Just as content owners will want to protect their content, so also businesses will need to protect their IP (intellectual property) - which could be stored in an official email message, a document or even a presentation. DRM technologies will be used to protect this type of content as well. And similarly, software developers would like to monitor usage & protect user licenses distributed to users.

DRM Comes of Age
There are 2 approaches to implementing DRM : either the "content viewing software" has to know about DRM, or DRM has to operate at the operating system (or hardware) level.

Although the 2nd option is preferable as you can secure data regardless of the software used to "view" or manipulate it, the difficulties are obvious - to implement this, it requires changes at the Operating System level. Attaching DRM onto an operating system is tricky business - it is safer to design it into (a new version of) the operating system. And the world's most popular Operating System (Microsoft Windows) has done just that - by building in DRM into its .Net & XP software using patented technology from InterTrust (see box). Now that there is practically no market left for DRM vendors to build in their software into Operating Systems, their only approach is to "DRM enable" viewing software.

Another interesting development is that after a decade of existence of the DRM industry, at least one DRM company (InterTrust) has earned a significant one-time "license fee" of $ 440 million from Microsoft. Of course, InterTrust had to fight a legal battle for 3 years, but then that's almost de rigeur in any dealing with Microsoft !

All these developments are seen as pointers to the "age of digital distribution".

The Writing on the Wall
In future we may have an Internet Operating System layer that can be used to build common distribution platforms - a layer which facilitates movement of digital objects, and which is subject to security & authentication.

Perhaps in all this, there is a message for media content & software publishers :
• Prepare for digital markets & digital distrubution
• Prepare infrastructure for DRM - by designing systems for tracking rights along with databases for storing digital assets and associated data.
• Plan the change-over from the rights-acquisition model to one based on permissions & usage tracking database.