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Business News (more headlines) 08-05-2003

Digital Rights Management Will Turn 'Pirates' Into Legitimate Users

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24 July 2003. Lawsuits will not solve the problem of file-sharing, but Digital Rights Management (DRM) can, says Ovum the analyst and consulting company.

Next month, the Record Industry Association of America (RIAA) will begin to file thousands of lawsuits against individuals who trade copyrighted music online. But Ovum does not believe that this costly and lengthy process will bring an end to file-sharing.

Instead, Ovum is urging ISPs and content service providers to work together to develop services for music and video content to stimulate the market against file-sharing. Only by offering compelling commercial alternatives to downloading music, video or film can they hope to legitimate usage.

"The threat of civil and criminal penalties in the US will not stop more than 10 million people worldwide using file-sharing for swapping music," says Dario Betti, senior analyst with Ovum and digital content expert.

"It is time for content providers to stop treating file-sharing users as criminals, and focus on how to turn them into proper users of commercial services."

According to Ovum, DRM can help content owners capture revenues for their content while allowing a fair degree of flexibility to meet user requirements.

And although the RIAA threat may not have immediate consequences for ISPs, it is in their interest too to examine how to sell and protect multimedia content. "The file-sharing culture is one of the main drivers for users to upgrade to broadband," says Betti. "And the availability of paid-for content is key for the future of broadband."

DRM enables the control and charging of content by defining the following parameters:

* Access: when the content is accessed; for example, viewing, listening or reading

* Portability: which devices can be used to access content; for example, on feature phone, PDA or PC

* Duplication: the ability to make copies of the content to store on other devices

* Distribution: P2P distribution (secondary distribution by consumers) of the content and the rules that govern it.

"The recent success from Apple's iTunes shows that turning file sharing into a commercial proposition can be done," says Betti. "The rest of industry is starting to follow into their footsteps."

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