Is DRM dead?

Now EMI decided to deliver “DRM[1]” free music, (no limitations once the music file has been downloaded) it seems that everyone in the technology and CE space is going to take a wait-and-see attitude for the next few months. It is highly unlikely that any big player in the field like Philips will do anything in the area of encryption-based DRM in the very near future.

On the other hand, this could be a huge boon for watermarking. Check DMRC – it spiked mildly (3%) on the news, then retreated somewhat – although only a small percentage of DMRC’s revenue is media related (as opposed to government and other applications). Still, if you were to invest in individual securities, buy DMRC right now. (There are money managers who deal with this).

So we take it DRM is not dead. One fact that got lost in the recent hoopla is that DRM-ed tracks from EMI are still going to be available on iTunes. So, it’s about offering consumer choice and responding to the market, which is what DRM is supposed to be about. For companies like e.g. Intertrust that have DRM technology for all types of content, it looks that it’s not going to make much difference, though they are most likely going to have to cut their royalty rates for music devices.

However other companies may do less well, like e.g. SDC of Switzerland, because they are music only –good news for Michael Bornhaeusser because he cashed out in time (SDC was recently, and quietly, acquired by a US company called PacketVideo that makes software for media applications on handheld devices).

[1] Digital Rights Management