ContentGuard Stake Could Help DRM Strategy

In a move with implications for its consumer strategy, Microsoft has teamed up with Time Warner to take a controlling stake in digital rights management (DRM) specialist ContentGuard. The investment is a first step toward fostering interoperability among the many DRM schemes being proposed by computer and consumer electronics companies, who are anxious to help content owners enforce their copyrights on digital media files and secure these files from unauthorized usage. However, real interoperability will require deeper cooperation and broader participation from DRM providers.

What ContentGuard Offers

On Apr. 5, 2004, ContentGuard announced that Time Warner had taken a stake in the company, and that Microsoft, which was already an investor, had increased its stake. The venture is the first concrete instance of Microsoft and Time Warner cooperating on secure digital media, as the companies promised when they signed a cooperative agreement in June 2003. (See “Truce Reached with AOL” on page 20 of the July 2003 Update.) According to ContentGuard CEO Michael Miron, Time Warner and Microsoft now jointly control the company, with Xerox having a small minority stake. The companies did not disclose how much they paid or their precise stakes, however.