Analysis This week Comcast surprisingly joined the supporters of the Coral Consortium’s digital rights management interoperability initiative which was begun last year by the leading consumer electronics manufacturers.
There are two ways to achieve interoperable digital rights management, says Talal Shamoon of Intertrust, “everyone in the world uses the same DRM, and that means all of us going down the Microsoft route, or we can all use different DRMs and we separate interoperability from the DRM and let a million DRMs bloom,” which pretty much sums up the role of the Coral Consortium.
And this week Coral signed one of the biggest US media names that was missing from the puzzle, in adding the support of cable TV company Comcast to the 30 odd names that have already signed up with Coral.
Jack Lacy, Coral Consortium's president, like Shamoon, another Intertrust employee, points out that this means all the major record labels, all the studios except Disney and Viacom and the two largest and most affluent US cable TV operators are signed up as supporters of Coral’s new architecture for making DRM’s interoperate. It doesn’t mean they are all going to use it, but so far so good.
The founder members include Hewlett-Packard, Intertrust, Philips, Matsushita, Samsung, Sony and Twentieth Century Fox and two batches of subsequent groups joining have included NBC Universal, Sony BMG, Universal Music Group, IFPI, EMI Music, Warner Brothers, Time Warner Cable, Cloakware, Sun Microsystems, Ardtully Technologies, and Kenwood.
But why would Comcast and Time Warner Cable get anything from joining a DRM interoperability group; after all, at present it uses conditional access systems, simple decrypt /. don’t decrypt, systems either have a single unique key built into the set top or resident on a smart card.
“I can’t speak for the cable operators specifically, but all the companies that in the past operated on very simple content distribution models have shown that they are interested in richer business models, which extend further into the living room and around the home,” said Shamoon, “companies that used to run walled gardens are now looking for new business models.”
The problem that all operators are facing is caused by open IP access. It used to be that if you owned the network, then you owned the customers, but that’s changing. Companies like Yahoo and Google own customers, but they don’t own any networks, and that’s because they only deliver services that can be delivered over open IP access. What happens to companies like Comcast when TV can be delivered over best-effort internet. Quite simply it doesn’t want to find out, it wants to offer those services itself, and to do that, it needs control over DRM.
“Some people like to cling to the past,” said Shamoon, “but these content delivery networks employ some pretty smart people and they can see that DRM offers them new ways of conducting their business.” While Intertrust and Coral doesn’t want to put words in their mouths it seems to Faultline that if Comcast and Time Warner Cable, among others, realize that they are in the business of making money out of delivering content, then they must follow that business wherever it leads.
Right now, their business model relies on getting homes to sign for a broadcast TV service, which, for the most part, contains advertising. The advertising is sold by owners of cable TV channels, and this means that they can charge the cable companies less for the content than they would have to charge without advertising. In turn that means that the cable operators can charge consumers less (not that they do).
Already Comcast and co have experimented with pay per view, video on demand, games services, music services, even dating on demand, and more recently subsidizing digital video recorders so that their customers can watch the content that is broadcast when they want, rather than when it is broadcast.
But to keep their customers loyal, and to remain central to content delivery, Comcast must go on to offer video on demand services where programs can store on a DVR, ad it must offer this for customers that are NOT viewing the programming on the Comcast network.
For instance, in January Comcast said that it will experiment using equipment designed by satellite radio maker Delphi to develop ways to allow users to store video content and transfer it to an in-vehicle entertainment system, and take it with them on the go.
Under the agreement, Delphi will work to develop an electronic consumer device for use in vehicles that enables the transfer and playback of video. The agreement includes an anticipated timeline of six -18 months for evaluation and development, which means that the service could emerge at any time from next month to this time next year. For projects like that, the video will suddenly be out of the control of its conditional access system and a digital rights management system would be needed which can allow copies to be made onto DVD’s and then subsequently safely copied onto portable devices.
At the same time Comcast and Time Warner Cable are known to be looking at bundling in mobile telephony services into their mix. This is likely to be achieved on the back of Mobile Virtual Network Operator contracts with suppliers such as Sprint Nextel. Here the mobile handsets are likely to support OMA, if the operators can ever agree a license fee to the patent holders for the OMA DRM.
So movement from fixed conditional access to portable device to phone is likely to be required from one cable company supplier, using multiple DRMs, and that implies a method for transferring content between at least two DRMs. If you add PC based home servers into the mix, that implies at least three DRMs which need to swap content. So Comcast does have a need for Coral, after all?