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Grokster has hit the agenda of the U.S. Supreme Court. It promises to be one of those landmark legal battles that will produce a decision that profoundly changes life in these United States. In this case, its digital life.
Grokster, if youre not already familiar with it, is the peer-to-peer network thats raised the hackles of the music and video industries over the ease with which their products can be pirated and distributed across the Web.
For the most part, the legal battle is focused on Groksters wire-based IP technology. But the precedent here will have far-reaching effects and that reach is certain to extend to the realm of high-value mobile music and video content that has been stalled in the United States, awaiting solutions that ensure that the content providers will not be ripped off.
Mobile content is emerging as the next big revenue stream on the wireless horizon. Analysys Ltd., global advisor in the telecom and new-media markets, estimates that mobile service revenue from games and entertainment will grow to more than 3 billion Euro by the end of this year.
What does Grokster have to do with mobile content? Mobile operators saw digital rights management spin out of control in the wired world.
“Content owners are hesitant to release their content to users if they cannot protect it,” said Harry Wang, research analyst for Parks Associates.
The problem rests in one word: interoperability.
If you could access movies over your mobile phone—and if it were cheaper and just as easy to download the flick through your mobile phone that interoperates with that big plasma TV you got for your birthday—wouldnt you do it?
Thats one of the key issues that Wang tackles in a new Parks Associates report, Digital Rights: Content Ownership and Distribution.
Some companies have tackled the problem on their own. Apple, for instance, doesnt particularly worry about being ripped off. The company gives away the downloads and sells the hardware. Music mavens who use Apples IP services can only get to the content through their iPods. Anyone packing other media players simply cannot play iTunes.
That works for Apple but not the industry—nor for the user who wants, say, to transfer some great new track from Moby over to a home theater, slither out to the patio with a tall cool one on a hot summer day, and enjoy a digital blast across some clean, green Bose FreeSpace-51 Landscape outdoor speakers.
The OMA (Open Mobile Alliance), the industry consortium, has an answer to that problem…well, they seemed to, at least for a short while.
Next Page: The OMA DRM 2.0 and what stands in its way.
TOMA DRM 2
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The OMA is the consortium of mobile-content companies and the telephone companies and phone makers interested in distributing their material that was organized to ace the problem. And it did—at least partially.
The OMA DRM 1.0 standard for light content like ring tones, text messaging and other premium goods that dont put heavy demands on the air waves or devices, is out in circulation and doing nicely, thank you. Its the OMA DRM 2.0, the standard that promises to open the mobile market to high-value, high-bandwidth premium content, thats the most promising.
In March, NDS Group released the industrys first V.2 DRM solution based on a platform developed by ARM Ltd., specialists in embedded solutions for mobile devices. It secures content communicated to set-top boxes running Windows CE, as well as to mobile devices.
I recently chatted with Dave Steer, ARMs director of segments marketing in North America, about the solution. Back doors in Windows and Linux-based operating systems, he noted, leave them basically insecure. TrustZone relieves the OS of the digital rights management. But dont start filling out your play card just yet. Steer expects it will be 2006 before high-value content is distributed to consumers.
OMA 2.0 has its own hurdles to overcome before we see a widespread embrace of the standard. The GSM Association of mobile operators—that would include the telcos and service providers who deliver the services—now complains that the patent holders on OMA 2.0 technology are demanding royalties so high theyll drive the prices of mobile phones that possess them off the charts. (Hmmm…unhappiness over high prices due to royalty payments…where have we heard that complaint before?)
Parks Associates Wang expects the spat will be quickly settled. If it is, content is likely to quickly follow. The demand is there. Parks Associates estimates that, in the coming year, 28 percent of U.S. households will purchase a mobile phone and many of those will possess the bandwidth to turn those phones into media receivers and players.
Video is already here in certain specialized applications. Just last month, I took a ride in and reported on my video experience in the back of an Interactive Taxi in New York.
Click here to read more about Carols ride in the Interactive Taxi.
This month a company called Cabvision will launch a similar service using GPRS (General Packet Radio Service) mobile services in some 1000 black cabs cruising the streets of London.
And how will the Grokster ruling, when it does come down, affect all this? In Wangs crystal ball, the industry is prepared to deal with it whichever way it goes.
“The Court is not likely to make a ruling that is anti-innovation,” he predicts, pointing out that the industry recognizes that peer-to-peer networks are remarkably cost-effective as a distribution mechanism. “If the technology itself is capable of doing something good for the content industry, the industry would love to make use of it. If they can persuade consumers to accept the DRM content over the network it would benefit the industry.”
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