Thursday, August 23, 2007

Moving Beyond DRM to Open Markets: Is Watermarking a Solution?

These are not the salad days for many Digital Rights Management providers, with major music producers such as Universal eschewing proprietary copy protection in an effort to blunt efforts by Apple and others to control music distribution and pricing. But just because you are enabling open copying doesn't mean that you have to give up on copyright. PC World covers a new digital watermarking technology from Activated Content that enables music producers to track copying of music via standard audio file formats. The technology in Activated's watermarking algorithms is very powerful, but because it does not prevent access to the music itself there's very little motivation for the average music consumer to crack the code. This is very much along the lines of what we've been encouraging for some time, analogous in some ways to what Attributor is doing with hypertext-based digital content.

The key to success in digital content distribution in an era that values the context that content finds itself in as much as the content itself is to not use access control as a mechanism for copyright enforcement. For those such as movie producers who have not yet come up with effective contextual monetization models DRM will be with us for quite some time, though, as evidenced by the prevalence of Blu-ray format DVD discs driving HD video sales. When your focus is more on an uninterrupted performance with a high-level technology component DRM may still be able to carry the freight. But as contextual advertising makes its way into video distribution as well (pre-rolls as in move theatres today) we may begin to see some loosening of DRM for video also, especially as it will find itself competing more with increasingly ad-driven game content for audience attention. All content producers concerned about copyright in an era that increasingly values user-initiated content distribution need to consider how watermarking technologies may be able to help further revenue streams beyond their traditional models.
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