DRM still the focus of online music and video

It looks like the video and music industries are standing firm over digital rights management (DRM) , the controversial copy protection system they employ to protect their content.

Despite EMI and Apple reaching agreement to sell records free of DRM, albeit at a slight premium, others are unlikely to follow suite. The EMI deal gave Apple access to a rich catalogue of music to sell over iTunes. The stumbling block for EMI was in part that Apple refuses to license Fairplay copy protection system third parties, meaning that anyone buying music over iTunes is restricted on the devices it can then be played on.

This week at Internet World in London, Channel 4 reiterated that it would continue blocking Mac users from using its 4OD video on demand service until DRM issues with Apple are sorted out. The BBC is taking the same position with its new online TV service.

A new study by Strategy Analytics, called 'A Roadmap for DRM: Business Impact for Content Owners and Technology Vendors', says after extensively interviewing senior executives in the media, entertainment and consumer electronics industries, it believes DRM "will still play a critical role in the emergence of the digital marketplace".

But, it warns that DRM must "sink into the background" so that consumer choice can be broadened and the industry open up new revenue streams.

"In the right form, DRM can help expand the size of the music and video markets," said Martin Olausson, director of the Strategy Analytics Digital Media Strategies service. "Ultimately, DRM is needed to harness the commercial value of the `rip, mix, burn and share' culture".

Andrew Currah, the report's author, added: "It is time to shift the focus of the debate over DRM beyond the misleading polarity of 'corporations' versus 'consumers'. Ultimately this is a commercial rather than a technological problem. In the coming years DRM will be redefined and fine-tuned - not eradicated completely, as many have suggested."

The problem that TV broadcasters face is that most programmes are put online for download, giving those prepared to access the content illegally (in the eyes of the authorities) a very easy means of downloading the latest US blockbusters before they appear in the UK. The downloads are DRM free, generally of good quality and with a media streamer, can be enjoyed on a TV rather than the computer screen.

Channel 4 said it had learned from the mistakes of the music industry in its approach to TV online. Rod Henwood, new business director at the broadcaster said it would not waste time chasing pirates or those that illegally download programmes over the Internet, instead focusing on fine-tuning its offering.

And that's the real solution to DRM. Content providers have to make their offerings complete, easy to use and if not freely available, then at very low cost. That will mean in future that UK online broadcasters will need to think about signing deals with US programme makers to show a new series in Britain as soon as it shown in America.

Henwood told delegates at Internet World that Channel 4 was not afraid of cannibalisation. It's going to have to prove that over the coming few years if it wants to attract the Torrent generation over to its legal offerings.

Altec Lansing releases 'large screen' iPod system

Altec Lansing is bringing out a compact iPod video entertainment system that will play music, videos or DVDs - provided you have the kit that plugs into it.

The portable InMotion iMV712 is aimed at anyone that wants to watch video on a screen larger than the inbuilt iPod screen.

It has an 8.5-inch high resolution LCD screen surrounded by speakers, which Altec Lansing claims gives concert-like sound. It uses a four-inch subwoofer the company says its SFX (Stereo Field Expander) boosts the sound, giving the user the impression that the speakers are further apart than they actually are.

It's comes with an iPod dock, but other mp3 or media players can be plugged into it using the Aux jack. Camcorders or DVD players can be plugged in via an RCA connector, and it comes with a wireless remote.

“As the popularity of Internet-based video and digital music skyrockets, consumers want new iPod accessory products that amplify the entire entertainment experience,” said Robert Heiblim, Altec Lansing’s senior vice president of sales and marketing.

Online music hits a "turning point"

The decision by EMI and Apple to drop the hated Digital Rights Management (DRM) from online iTunes tracks is expected to help push sales of global music downloads to $2.7bn this year.

That’s a 62% increase over 2006, but slim pickings when you think that predicted sales are expected to hit $6.6bn by 2011. It means that the music labels will start to see profit from online music sales – and maybe we’ll hear less bitching from them about file sharing and illegal downloads.

According to Strategy Analytics, author of the Online Music: Global Market Forecast report, the big rise in online sales (almost 800 million tracks and 43 million albums were downloaded last year, making sales of $1.23bn worldwide) is not yet enough to offset the drop in physical sales, but it expects the next 12-18 months to become the “turning point for the music industry”.

"The music labels are finally starting to see digital sales having a positive impact on the bottom line," said David Mercer, VP and Principal Analyst at Strategy Analytics. "This year will likely be the turning point for the music industry, and a return to overall revenue growth."

Part of the reason for this rapid growth is because iTunes, which is responsible for the bulk of online music downloads, will be able to sell tracks that will work across a range of devices, such as mobile phones.

Martin Olausson, director of Strategy Analytics' Digital Media Strategies service, said the move by EMI and Apple means iTunes can be positioned "to sell content not only for its own devices but for all connected devices - both in the online and wireless domains".