Don't Go Breakin' My DRM
By Justin Pearse, Tue May 17 08:00:00 GMT 2005

Mobile music offers a big opportunity for the music business -- if the DRM and services are right -- says one major-label executive.

Barney Wragg is the vice president of the eLabs arm of Universal Music Group, which investigates and develops technologies to improve and change the way music is distributed. It's at the center of the world's largest record label's efforts to both drive new revenue streams from online and mobile technologies and to ensure its stable of artists' rights are protected. Although the music industry is often perceived as viewing mobile distribution with extreme wariness, especially when it comes to DRM, Wragg believes it offers bountiful opportunities for his company and the music industry as a whole.

TheFeature: What are your concerns over DRM in the mobile music space?

Wragg: We're concerned about protecting the investment in our repertoire and making sure that there's a way for us to benefit from consumer usage of that repertoire. We're very happy to experiment and explore many, many different business models in getting that repertoire out to people but we always want to ensure that we're getting the compensation that we've agreed. So, if we decide to distribute even in a P2P environment, we'll do so on the understanding that we'll be paid per usage or per ownership of the files that are transferred and we want a DRM that will ensure that that's the case.

So, we're out there licensing for just about every kind of service you can imagine at the moment, providing it has an adequate level of DRM that ensures our assets aren't going to be ripped off, stolen and used in a way that us and our artists are not going to get compensated. We're working with a number of DRMs deals across the world where we use a number of different DRMs.

TheFeature: How is the decision made to use a particular DRM technology?

Wragg: We do a technical analysis of each DRM, looking at things like how the security is provided, how the system can be revoked and renewed in the case of an attack and how the overall system's architected to ensure that there aren't simple forms of attack and simple forms of leak.

We're working with O2 and two as yet unannounced operators and the interesting thing about that is you've got three different DRMs being used: SDC, Chaoticom and Melodi.

TheFeature: Is that not an issue for you, having to work with different DRM technologies?

Wragg: Not really. In the Internet stage we designed our in-house systems to allow us to do that. We've also got a host of deals for mobile products -- ringtones, realtones, graphics, wallpaper -- and we use a type of DRM that's appropriate for each product.

TheFeature: Does Universal view P2P as an opportunity or a threat?

Wragg: I've kept saying for years that P2P is just a protocol for transferring files. It's not a market in and of itself. It's a protocol and we're happy to utilise that protocol if it can be legitimized. The problem with P2P protocol at the moment is it's substantially used for illegitimate purposes. People are sharing copied versions of our files and we're not being compensated for it.

But we are starting to engage in some deals. At the moment they're mainly Internet deals but we are starting to engage in some deals with companies that are looking to create a legitimate environment using those P2P protocols and we're very happy to support that and quite excited about what might happen as a result.

TheFeature: Do you view Bluetooth file sharing as a threat?

Wragg: Again, we don't worry about cables or Bluetooth or Wi-Fi as a protocol. Why we're so keen and so interested in supporting and promoting good useful DRM in the mobile space is that that DRM can allow you to legitimize all of those protocols. It can allow you to build a really viable consumer service that can be monetized, the same as we're seeing DRM doing with Internet P2P protocols right now. Yes, the prospect is that somebody will be able to forward a file onto their friend via Bluetooth. That friend will be able to either be a subscriber to a service or go and buy the rights to be able to play that song. We think it will be great. We're very happy to support those models providing there's good DRM there.

TheFeature: Does Universal get involved in DRM standards initiatives, such as OMA?

Wragg: Sometimes, yes. We have a liaison with OMA and we share comments about their specifications through that and we're involved in a number of the projects associated with OMA. So, we are quite active.

TheFeature: Simon Wheeler, head of new media at the Beggars Group record label, was quoted as saying, "As soon as people get music on the phone and share it unencrypted, who cares what the standard's like, because once DRM is broken it's out there." Do you agree?

Wragg: I think that's a bit negative. The challenge in the Internet space, the problem we had, was that the legitimate services using DRM technology came after the illegitimate services. So, it was much easier in the Internet space to create the first generation of Napster that have widespread access to those files than it was for us to build a legitimate download service or subscription service. The DRM technology just wasn't there in '96, '97, '98 to allow us to do that.

But we've still built quite an attractive and growing business in the legitimate download subscription markets on the Internet and it's a healthy growing business. The challenge for the mobile industry is to get to a position where we can have those attractive, good, legitimate services in place before the illegitimate services get a hold. I think it will happen. I think people will have illegitimate clients for cell phones and they will use Wi-Fi, Bluetooth, infrared and cable-to-cable type connections as well as the air interface. I think that will happen. The challenge is to get some good commercial services out there so that people have an alternative and a more attractive alternative from day one.

TheFeature: What would you define as being a good commercial service that would convince consumers not to go elsewhere?

Wragg: I think it's got to have the right price, the right repertoire and it's got to be easy to use and all of that's got to be put together with a marketing message If you get those things together in a service and you've got services well architected and well designed so that record companies know the content and obviously feel confident about releasing their repertoire, it will be very successful.