Research Group Puts Price Tag on Interoperability Quagmire

The inability of several industries to resolve their differences over DRM could stunt the evolution of future digital markets, while potentially putting “hundreds of billions of dollars” at risk.

This comes from the supply chain analysts at iSuppli, who recently pointed to emerging problems across various sectors, including digital music, broadband video, mobile TV, high-definition DVD, Internet Protocol Television (IPTV) and home networking. iSuppli singled out interoperability and portability as two key expectations of consumers that are not being met. “The industry’s vision of enabling all digital content to be played on any device in any location is at risk due to DRM interoperability issues,” said iSuppli vice president Mark Kirstein. “When it comes to DRM and conditional access, conflicting interests abound, both among industries and among companies.” The concept of DRM is usually tied to the actual file itself, though conditional access refers to controlling access to specific pieces of content.


Regardless of the broader revenue threats, iSuppli predicts that the DRM and conditional access markets in networked and mobile applications will reach $4.7 billion by 2010, triple the $1.5 billion market recorded last year. Meanwhile, format interoperability is becoming a distant possibility in the digital music industry, where stalemates are hampering overall adoption levels. The DRM-free MP3 format is the universal standard among file-sharers and device manufacturers, though it is shunned by many content providers, showcasing the disconnect between media companies and the consumer. Meanwhile, Apple has lunged ahead with its FairPlay DRM architecture, though a refusal to license the system has bred distrust and resentment among major labels, consumers, and even lawmakers.


Story by news analyst Richard Menta.