New DRM System Targets Mobile Phones

A new Microsoft digital rights management (DRM) technology for the mobile phone industry will support multiple file types (including executables such as games), content transfer between devices, and interoperability with other DRM systems. However, as with any DRM system, actual usage rights will be negotiated between many different business participants, making its improved flexibility strictly theoretical for now. How PlayReady will intersect with DRM on other Microsoft platforms, particularly Windows Mobile and Zune, remains unclear.

Riding the Mobile Entertainment Wave

Entertainment is an increasingly important source of revenue for the mobile phone industry: ringtones have exploded in popularity, generating US$6.6 billion worldwide in 2006 according to Jupiter Research, and Gartner predicts that all music downloads (including ringtones and full songs) will reach US$32 billion worldwide by 2010.

Microsoft believes growth in mobile content will create an opportunity to sell enabling technology to carriers, handset makers, and content owners, allowing it to earn licensing fees and to sell back-end infrastructure for distributing the content. Apple’s planned iPhone adds a threat to the mix: if the iPhone dominates the market for music-enabled phones as the iPod has with portable media players, then Microsoft’s Windows Mobile platform for mobile phones may be relegated to business users.