OMA DRM DOA?
By Carlo Longino, Mon Apr 04 23:45:00 GMT 2005

Handset manufacturers already balked at the price to license the Open Mobile Aliiance DRM patents; carriers have now chimed in as well. Is the DRM that was supposed to unite the mobile world now in danger?


At the beginning of the year, the MPEG LA intellectual-property licensing firm said it had pooled together the necessary patents needed for OMA DRM, and would license them to handset vendors for $1 per handset, a price device makers decried as too high. They may have a point -- after all, had the price been paid on all 684 million handsets sold last year, the revenue generated would be greater than those of music downloads on the Web.

MPEG LA also said it would license the patents to service providers for 1 percent of each transaction involving them, and now mobile carriers are objecting. OMA DRM 2.0 was envisioned as being the single DRM technology used across the entire mobile industry, and being licensed to other consumer electronics manufacturers as well, paving the way for users to be able to share content between their mobile phones and other devices. But with these two large blocs of players objecting, what's going to happen?

There are two possibilities. First, MPEG LA and the patent holders could relent and lower the price, which seems the most reasonable choice. It's hard to see what return handset vendors get from the $1 they have to spend for the rights to the technology. Essentially, they're paying $1 to license technology that's part of an ecosystem with no guaranteed spot for them. Operators, too, won't give up any revenues for which they don't think they're getting a decent return -- and if no one wants to implement the OMA DRM spec, it's only going to hit MPEG LA and the holders in the pockets. "The patent holders would be better off to lower their royalties and get a smaller piece of a much bigger pie than a big chunk of a small pie," Reuters quotes a sensible DRM software exec as saying.

The second possibility sees carriers and handset vendors turning to cheaper DRM schemes, destroying the premise of OMA DRM to unite the mobile world on a single standard and thus avoiding the fragmentation that plagues the Web-based download world. Already Nokia and Microsoft have an agreement that will see the handset giant include Windows Media DRM on its handsets, and there's the well-known Motorola iTunes device that will use Apple's DRM. Add to this the plethora of other available, proprietary mobile DRM products, and there's the potential for a very serious mess.

This is where DRM becomes a very serious problem for content providers and producers. They make money by selling content. But when the content market is confusing and frustrating, it's inefficient and ineffective -- meaning people aren't buying.

A key for mobile devices and mobile content is interoperability. If operators or whoever are selling compelling digital content over their networks, there's a good chance users won't want to only be able to access it on their handsets. The interoperability promised by OMA DRM -- and keep in mind it was just a promise -- looked to solve that. If the industry can't settle on it, it must find another common system to use or risk stunting the growth of mobile multimedia.

That, or just ditch DRM altogether and start selling.