There is a tug of war going on between the hard-pressed music industry and Apple, the dominant player in the business of MP3 downloads. Steven Jobs, one of Apple's founders and its current CEO, has suggested that major record labels distribute their music libraries without copy protection. Based on the fact that Apple dominates the industry for music downloads so completely, the idea is presently under serious consideration. The movie industry and other purveyors of entertainment are watching from the sidelines for now, but it will only be a matter of time before other segments of the entertainment industry come face to face with the same issues. Is the music industry ready to give up trying to protect its content from unfettered distribution? If every form of entertainment can be played on any device without controls, then who wins—other than device makers like Jobs?

For entertainment content creators, physicians, accounting firms, and everyone else attempting to share information only when limitations can be placed upon who receives it and how it will be used, managing and protecting information in the age of the Internet is a critical issue.

Digital rights management (DRM) involves the combination of software and hardware technologies that enable the content owner and distributors to assign and control rights and conditions for viewing, listening, and employing the content present in digital media and applications. DRM has become something of an umbrella term that covers the generation, distribution, and usage aspects of intellectual property on a digital communications network—be it a song, a movie, a medical or financial record, or a software game. In a nutshell, the goal of DRM technology is to implement the following:

- restrict access rights to authenticated users only;
- ensure a viable business model to content owners and distributors; and
- track and monitor the usage of digital media.

Akin to DRM is the conditional access system (CAS), a protection mechanism used by broadcasters to ensure that only authorized TV subscribers are able to receive broadcast media signals. CAS is applicable only to audio and video media, whereas the scope of DRM includes all types of entertainment as well as literary works and even medical or financial records. The end-user equipment in CAS is also limited to a set-top box (STB) and a television set, whereas there is tremendous diversity in end-user equipment for DRM.

CAS and DRM share several attributes including:

- control of content distribution;
- control of content viewing or listening;
- user authentication; and
- user authorization.

Thus, DRM is a software tool that is playing a significant part in a three-way struggle between service providers, content providers, and the consumer regarding information freedom and intellectual property rights. Large entertainment and media companies that have successfully lobbied to increase the duration of copyright protections in order to ensure continued revenue have run smack into the Internet, which has increased their market reach while at the same time removing all barriers to the distribution of digitized information by anyone in possession of a copy of it.

DRM thus evolved over the last two decades in response to challenges such as information piracy, peer-to-peer (P2P) file sharing, regulatory requirements, and most importantly the pervasive ability of the Internet to facilitate the exchange of digital information of all types. As a result of the Internet becoming the medium of choice for many types of commercial transactions as well as a mechanism for widespread information exchanges, the telecommunications infrastructure now plays a key role in DRM implementations. This report thoroughly analyzes the drivers and challenges in the DRM marketplace in terms related to wireline and wireless network architectures used to distribute content.

DRM did not arise to meet the market needs of the end users of DRM-enabled content; in fact, it may be said to have evolved to spite the end user. While organizations such as Creative Commons have emerged to balance the respective (and oftentimes conflicting) rights of artists/creators, media companies, and individuals who share content, by and large the focus of the DRM industry is on protecting the rights of the content owner, not the end user.

With this caveat in mind, INSIGHT has identified six principal market segments:

- wireline retail users;
- wireless retail users;
- TV and home entertainment network (HEN) users;
- software application retail users;
- software application corporate users; and
- DRM intellectual property users.

Though DRM implementations can be classified based on the content protected and the end-user markets served, analyzing where DRM is being targeted yields the clearest picture of the specifics of DRM implementation. Additionally, because a DRM implementation can have varying attributes, focusing....

Market Segmentation

By Geography
North America
Europe, Middle East, Africa
Asia - Pacific
Caribbean, Latin America

Revenue by Segment
Wireline
Audio/Video (non-IPTV) Streaming
Online Music and Video Download
Wireless
Server Implementation
One-Time Client Installation
Content-Based Royalties
Content-Based Revenues
TV and Home Entertainment Network (HEN)
STB License Fees
IPTV Content-Based Royalties
IPTV Content-Based Revenues
Corporate and Retail Software
Software Copy Protection
Enterprise DRM

Impact of Standardization
OMA DRM-Compliant Handset Shipments
Total Wireless DRM Revenues
TV and HEN DRM Revenues
Enterprise DRM Revenues

Internet Content Revenue
Total Wireless Content
Audio/Video (non-IPTV) Streaming
Online Music and Video Download
IPTV
Value of Internet Content DRM

Software Sales and Piracy
Total Software Sales Revenue
Estimated Piracy Revenue
Legitimate Software Sales Revenue
Software Copy Protection Revenue

Users and Subscribers
Wireline Broadband Subscribers
3GSM Subscribers
EV-DO Subscribers
IPTV Paying Subscribers
OnLine Music Downloads