Intellectual Property Rights: Potential of Digital Rights Management for Digital Content

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1 Intellectual Property Rights: Potential of Digital Rights Management for Digital Content Marc Fetscherin August 2003

2 Digital Rights Management Currently only 3 books worldwide including in the title Digital Rights Management, all published in 2002 Next September 4 th book about DRM: Digital Rights Management - Technological, Economic, Legal and Political Aspects Berlin, Springer

3 Agenda Problem Statement Impact for content providers Digital Rights Management Practical Example Q&A 2

4 More people are on-line... Million of internet users WIPO SURVEY 2002 Ca 10% of population are on-line In 2002 have been 600 millions Increasing internet penetration in all countries Source: World Telecommunication Development Report, ITU March

5 ...with faster internet access Million of users with broadband access EXAMPLE US CAGR 16% New channels to connect to the internet Wireline: e.g., ADSL*, Cable, Modem, Power Wireless: e.g.,w-lan, mobile Decreasing hardware costs Decreasing cost of internet access E 2002E 2003E 2004E * Asymmetric Digital Subscriber Line Source: Forrester; Jupiter 4

6 Technology advances... Hardware Scanners CD(rw) DVD(rw) Portables players Software Compression format like MP3 or MPEG Burning software Capturing software (e.g., SnagIt) Always affected intellectual property issues (e.g., VHS, CD, DVD) 5

7 and networks... Such as the Internet Several billions pages of information Growing at 7 million pages per day Internet traffic doubling every six months including transmission of works of intellectual property Source: 6

8 ...enable easy transformation/sharing of content Traditional content sharing Current situation Physical From/ ownership Digital Physical* Vinyl cas CD cas. N/A To/share N/A N/A Digital Physical From/ ownership Digital Physical Vinyl cas CD cas. CD CD DVD DVD MP3 CD MP3 other devices To/share Digital CD MP3 File sharing like P2P, websites, Ownership attached record carrier => Quality decrease Ownership decoupled of record carrier => No quality decrease * record carrier 7

9 Agenda Problem Statement Impact for content providers Digital Rights Management Practical Example Q&A 8

10 Digital content can therefore be... Easily accessed by everybody from everywhere wireline wireless at any time Easily being transformed (e.g., see matrix) Digitize, store, copy, modified Easily being distributed or shared (e.g., P2P) 9

11 ...where this results Des-intermediation of the value chain Low copying, production, and distribution costs for individuals and content providers Increasing amount of digital content available illegally (piracy) Few content providers are making money with digital content 10

12 Example of file-sharing system Example Kazaa

13 Agenda Problem Statement Impact for content providers Digital Rights Management Practical Example Q&A 12

14 Technology solutions are needed... Digital content demand protection technologies to fight piracy make money with digital content also to protect sensitive information and privacy ( ) Digital content demands same protection as physical product does New technologies enable innovative business models (e.g., superdistribution) Managing, controlling, securing, and tracking of digital content are key requirements for the future where Digital Rights Management is playing a key role 13

15 ...where Digital Rights Management emerges as the tool content providers are looking for No standard definition DRM entails the operation of a control system that can monitor, regulate, and price each subsequent use of a digital content [Einhorn 2001] Managing rights means managing rights throughout the entire value chain and the life cycle of a digital content Seven components exist for a DRMS At the core is the rights model 14

16 There are seven key components... Access and usage control Integrated E-commerce systems Protection of authenticity and integrity Payment systems Metadata Copy detection system Hardware and software 15

17 Rights Model: examples of types of rights * render = represent it on an output; derivated = deal with manipulation Source: Rosenblatt/Trippe/Mooney [2002] 16

18 DRM Reference Architecture 1. User gets content package through downloading (www, FTP, ) 2. Excercice rights on the content, activate the DRM controller 3. DRM controller send identity and content information to the license server 4. Authenticate client identity against identity database 5. Look up rights information to the license server 6. According to rights information, kick off financial transactions 7. Creation of license (encrypted), license generator pull together rights information, client identity information encrypted key 8. Send license back to the client 9. Decrypt the content and release it to the rendering applications 10.Rendering applications plays, shows, etc., the content to the user Source: Rosenblatt/Trippe/Mooney [2002] 17

19 Agenda Problem Statement Impact for content providers Digital Rights Management Practical Example Q&A 18

20 Application of Digital Rights Management Industry / Segment Objectives Market General Companies (documents, e- mails, presentations, budget figures, sensitive information like HR, training courses) Financial Institutes (reports, trading information) Healthcare (patient information) Law Firms (contracts) Universities (courses, e-learning) Telecom (mobile business) Government (documents, s) Protection -Access and Usage control -Authenticity -Integrity Confidentiality Privacy B2B/ B2G Media & Entertainment Industries (music, film, games, software) Publishing (books) Protection against Piracy Monetization of Content B2C Focus 19

21 Example DRM for Books Quelle: ozauthors.com 20

22 Example DRM for Music Source: Homepage HMV,

23 Selecting the subscription Source: Homepage HMV,

24 Accepting the licence agreement Source: Homepage HMV,

25 Purchase the subscription Source: Homepage HMV,

26 Filling out user information Access and Usage Control Source: Homepage HMV,

27 Payment Payment System Source: Homepage HMV,

28 Search for a music file Metadata Source: Homepage HMV,

29 Download the music file... Hardware and Software

30 ...and play the music file Hardware and Software Metadata Authenticity and Integrity

31 License of music file (in Xrml) Integrated e- commerce systems

32 Pro and contra of DRMS Pro DRMS Contra DRMS Gives content providers the necessary technology to protect their intellectual property Enables to control access and usage of digital content Enables to protect/guarantee the authenticity and integrity of digital content If you want to consume legally digital content, DRMS is a solutions Enables new business models (e.g., superdistribution OASIS case) User pay only for the effective use of the content (e.g, pay-per-use) Hamper piracy Potential violation of data protection and privacy (e.g., track, monitor) Restrict faire use (e.g., make copy) DRMS are conceptual simple but practical very complex No standards Poor inoperabilities other systems Poor ease of use (not user friendly) Often restrict heavily the lawful consumers (thus, illegal offer more convenient than legal offer) So far any protection technology not been widely accepted by consumers 31

33 Agenda Problem Statement Impact for content providers Digital Rights Management Practical Example Q&A 32

34 The Author - CV Marc Fetscherin University of Bern - Research and Teaching Assistant Studied finance and marketing at the University of Lausanne (HEC) and holds a Masters degree in IT and Strategy from the London School of Economics (LSE). He worked as a consultant at McKinsey & Company where he got specialized in telecommunication and e-commerce. Currently he is a research and teaching assistant at the - University of Bern, Switzerland. His research focuses on E- commerce, Digital Content Distribution, and Digital Rights Management. He has published several articles. 33

35 The Author Selected Publications Fetscherin, M., Schmid, M.; How are Digital Rights Management Systems Used in the Music Industry An Empirical Investigation; Proceedings of the "Third International Conference on Web Delivering of Music (WEDELMUSIC 2003)"; IEEE Computer Society: Leeds, Fetscherin, M., Evaluating consumer acceptance for protection technologies; in: Günnewig, D., Becker, E., Buhse, W. and Rump, N. (Eds.), Digital Rights Management - Technological, Economic, Legal and Political Aspects: Berlin, Heidelberg, New York: Springer Fetscherin, M., Digital Rights Management - Schutz und Verwertung digitaler Inhalte in und ausserhalb von Unternehmen. Key-Note am 1. Media Asset Management (MAM) Knowledge- Seminar, Zürich, Fetscherin, M., Vertrieb und Verwertung digitaler Inhalte: Potential von Digital Rights Management. Invited speaker at, Fetscherin, M.,Müller, J., Copyright and the Internet, One day Compact Seminar at the College of Europe, Warsaw, Fetscherin, M., Present State and Emerging Scenarios of Digital Rights Management Systems, in: International Journal on Media Management 4 (2002) 3, S

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