It would be easy to convince yourself that DRM’s were proliferating like wildfire and that the deal this week whereby Nokia adopts Microsoft’s Playready, is just one more iteration of DRM fragmentation.
But it is possible to see this in exactly the reverse light, and maybe, just maybe, this is a surprise Nokia proactive intervention to break the deadlock between different DRM approaches.
The deal is straightforward, Microsoft has issued a DRM porting kit for PlayReady, and Nokia has said it will put the technology on its S60 and S40 devices by early 2008. Ostensibly this is Nokia bowing to the inevitable, that some operators, perhaps only a few, would want to offer services where music and video can be held on both a PC or a handset without any new PC software being involved, complete with the ability to move it freely between the two.
There are really only three ways of doing that 1) port OMA’s DRM 2.0 to a PC, so that the two may swap content 2) port Playready to Symbian and Linux handsets (it’s already on Windows Mobile) 3) Invent something new.
Until the Nokia announcement our money was on the third option. Adobe has licensed the dominant Intertrust DRM patents so that it can write its own DRM system which will be part of its media player, due out on PCs this fall, and handsets sometime after. Most online video is Flash Video these days, and with a DRM this system could be adapted for premium content and bridge the PC handset divide.
Under this scenario further payments to Intertrust come from the tools which create DRM content, and not from each device and the famous and successful Adobe Acrobat business model is shifted across to DRM. Perfect.
Adobe would have no control over the underlying platform, has a history of being agnostic about overall architecture and happy to play as a component within other systems. Microsoft on the other hand has a habit of building enforced monopolies that the cellular industry has aggressively spurned over the past ten years, especially Nokia.
Another variation under the ‘something new’ is to build an interoperability bridge between the two environments, and we have examples in the Intertrust Nemo interoperability architecture endorsed by the Coral Consortium, and also in Core Media’s Windows Media DRM to OMA bridge, built under license from Microsoft.
The second option was to put OMA on the PC, a relatively trivial matter, and something that we know is happening, but not something that has been adopted widely by the cellular community. Part of the reason behind this is that OMA has a licensing cost problem. There is a license for the essential patents to offer OMA DRM from the MPEG LA but it was thought of as too expensive with Intertrust and its parents, Sony and Philips, plus ContentGuard and Matsushita all holding key patents. Intertrust has offered its own licenses directly and recently Telefonica and LG Electronics have taken Intertrust licenses, to go with the one Vodafone signed up for in 2005.
ContentGuard is now controlled by Microsoft, Time Warner and Thomson, and it was always thought that if the MPEG LA license was so high, and the Intertrust one so low, that it was Microsoft that was forcing up the ante for the MPEG LA license, giving its own DRMs, including Playready, a chance to breathe. If that was so, then the tactic has proved successful.
Telefonica was also the only operator that has publicly taken a trial of the Microsoft Playready technology, and also a license to the Intertrust patents.
Which makes it extremely odd then that the third option, endorsing the Microsoft system for both mobile and PCs, has now become a preferred option for Nokia.
We put this to Sebastian Nystrom, Director, Technology Strategy,
Nokia Corporate Strategy, and something of a DRM strategist for the handset maker. ‘We have merely added another DRM, we have not put it ahead in preference to any other DRMs that we support,’ Nystrom was quick to point out.
‘The reasons for endorsing the Microsoft product is that it can operate in user domains and brings an ease of use to DRM that isn’t in other DRM products,’ he added.
The Microsoft software comes with two distinct improvements over Windows Media DRM and the Zune DRM, which is that rental models, purchase models, subscription and pay per view can all be supported on Playready, and it supports what are known in the DRM world as domains.
A DRM domain is a cluster of devices which are shown to belong to a single family or person, so that once registered, they may share content without decrypting it, through a series of encryption key issuing techniques between the devices. A PC, for instance might authorize manually a number of handsets, say five or so, and then lose the ability to authorize any more. There is a crude version of this in the iPod and in iTunes, and naturally this is now extending into Nokia territory through the iPhone.
We think that is might be the arrival of the iPhone as a common foe that has led to this move by Nokia, to endorse a piece of software that overnight gives it iPhone like DRM capabilities or better.
But Intertrust remains an obstacle. It has filed a number of patents, some issued, others pending, relating to how a domain is built using DRM keys. Our understanding is that it filed these AFTER it agree its landmark $440 million court enforced licensing agreement with Microsoft. At the time Microsoft was licensed for ten years to use the existing (not future) Intertrust patents, for free, on its own platforms, and for a further fee on non-Microsoft platforms.
So it doesn’t look like Nokia can avoid Intertrust even by adopting Playready. It will need a patent license for the existing Intertrust technologies already licensed to Microsoft, because it cannot offer them for free on a non-Microsoft platform, and it will further need access to patents filed after the Microsoft Intertrust settlement. ‘No comment,’ said Nystrom, when we asked if Nokia was an Intertrust Licensee, but we now know that it is not.
Nokia can of course hide behind the idea that it is operators that choose their DRM, and Nokia just needs to be agnostic and support the operator choice, but this is not the Nokia way and it never has been. Look how aggressive Nokia has been about OMA BCAST versus DVB encryption for DVB-H systems. It had dogmatically stuck to one over the other.
Which we why we see this move at least partially as iPhone avoidance, and showing that giants can move rapidly when their market share is at stake. It must be understood though that if all iPhone handsets shipped for the next two years came out of Nokia’s market share, it would be barely a blip, so this is more about ensuring that Nokia can meet current expectations, some of which are set by the iPhone.
Both Nokia and Microsoft are among the 18 voting members of the Digital Living Network Alliance, one of the single most powerful consortia built around the concept of the digital home. The DNLA has yet to embrace a single DRM, and told Microsoft three years ago that if its software only runs on Microsoft systems, then its technology would not be chosen. By launching Playready is was preparing to get around that obstacle and by gaining Nokia’s backing it goes one step further, and it is now a straight fight between Playready and the Intertrust inspired Coral Consortium for content interoperability. It is likely that both may get the nod and to the exclusion of all other digit home DRMs.
There is in fact a history of co-operation between Nokia and Microsoft, despite them being deadliest of enemies when it comes to controlling the device agenda on the handset. They entered a pact over linking Nokia email clients to Microsoft email servers over a year past. However that was seen as a move by Microsoft to cede that it could not replace the Nokia software stack on the handset, and was an honorable draw. In this instance it looks more like Microsoft is gaining some foothold on the Symbian and Nokia proprietary platforms of S60 and S40 devices, which includes the popular N and D ranges of Nokia.
‘There’s only one internet,’ said Nystrom, pointing out that the mobile web and the web are one and the same, and hinting that Nokia just has to support a common toolset on both.
‘We are always in close discussions with operators and we have shared with them the information that we planned to support Playready and they have shared their thoughts with us,’ said Nystrom, ‘and they are in approval.’
As part of the new agreement, Nokia and Microsoft will also collaborate on expanding and simplifying consumer scenarios for accessing, experiencing and moving digital content using mobile devices, they said in a prepared statement.
‘Through our collaboration with Nokia, we aim to deliver a compelling platform that offers consumers seamless access to virtually any type of digital content they want,” said Amir Majidimehr, corporate vice president of the Consumer Media Technology Group at Microsoft. “Nokia’s breadth of offering in this space, coupled with core digital media technology from Microsoft in the form of PlayReady, will bring new mobile entertainment scenarios to life for millions of consumers around the world.”
Microsoft PlayReady is designed for digital entertainment services, devices and applications, with a specific focus on meeting the needs of mobile operators, service providers and device manufacturers. The technology supports a range of business models that can be applied to almost any type of digital content (music, video, games, ringtones and images) and a wide range of audio and video formats (including Windows Media Audio (WMA), Windows Media Video (WMV), AAC, AAC+, AMR and H.264).
The next question seems to arise is that if Nokia is pro-actively supporting Playready, does this mean that it will prefer it over the Adobe Media Player, which is about to come off beta. If so will it support the Microsoft Silverlight rival to Flash video? If it does that it risks opening the door perhaps a crack too wide for Microsoft to attack through. So we reckon that while Microsoft pushes Playready, and Intertrust and its partners push OMA Intertrust interoperability, we feel that Nokia has just signed up to ensure its offerings are up to date during the coming iPhone panic and that after that, the consumer’s love of ease of use will continue to push most consumers towards Adobe Flash Player, on both the PC and the handset.