With the copying of files on the internet so easily done, especially using peer-to-peer distribution services such as Napster and Gnutella, the time is ripe for technologies that protect the rights of content owners. These technologies are known as digital rights management, (DRM).
"This is about taking any digital content and enabling it to be charged for on any digital platform," says Ian West, vice chairman of InterTrust Europe, makers of DRM technology.
DRM is about "enabling new business models," says Michael Aldridge, product manager at Microsoft's digital media division. Other companies offering DRM technologies include Adobe, Softlock and ContentGuard.
Until now, these services have mainly been used in such products as books and financial reports. For example, when Simon & Schuster published Stephen King's novel Riding the Bullet on the net, it used digital rights management software provided by Glassbook. Now, however the spotlight has shifted to the music and film industries.
DRM technologies work something like this: when a user receives a file and tries to open it, the computer or device will check whether the user has the right to use the content. If yes, the content, such as a music file, will play, if no, then the consumer will be taken to a website where rights can be purchased.
After the input of a credit card number, the retailer will release a so-called electronic key that is stored on the consumer's computer. The content can then be used in accordance with the rights granted.
For example, the consumer may purchase the right to listen to the music a limited number of times, purchase it outright, purchase the right to make a limited number of copies, and so on. InterTrust's technology also allows detailed usage information to be collected by the content owner, enabling detailed user profiles to be constructed.
For DRM technology to work properly, it should be universal, protecting content on all sorts of devices, including PCs, portable MP3 players or digital television.
Here Microsoft has an advantage. Its Windows operating systems run on more than 90 per cent of the computers in the world and Microsoft has bundled its Windows Media package with the new Windows XP. Both it and InterTrust have been working with almost all manufacturers of MP3 players to ensure that content protect by their respective technologies can be used and protected on those devices.
InterTrust is distributing its technology with the 150m or so CDs that America Online, the internet service provider, sends to its customers. Adobe is to ship InterTrust with its Acrobat Reader software, thus ensuring that documents posted on the internet in its popular Portable Document Format can be protected.
InterTrust is also about to test set-top boxes which have been modified to enable protected content to be viewed on TVs. Nokia, the mobile phone manufacturer, recently took a 5 per cent stake in InterTrust, in a deal which will lead to content on its mobile phones being protected. InterTrust is compatible with almost all music players including the popular WinAmp. However, it does not currently work with Windows Media files, the format championed by Microsoft.
From the user's point of view the technology must be easy to use, to the point of not being noticeable. After all, when they adopt this technology, content providers are asking consumers to change the way they buy and listen to music and video.
Many content companies are dipping their toes into the water to see if these technologies work - and if consumers approve. InterTrust has signed up BMG, the media conglomerate so it can distribute its music catalogue on the internet.
Microsoft's technology is
being used to protect video distributed by U2, the rock band. It also counts media giant Sony among its customers.
Because of the popularity of peer-to-peer services such as Napster, both Microsoft and InterTrust, through its partner RightsShare P2P, allow users to send content to one another, provided it is in accordance with rights granted. The person receiving the content can then purchase further rights.
To ease customers into the idea of rights management, InterTrust has agreed with Virgin Music and Zomba Music Publishing that Daft Punk, the French band, will release a CD on which some of the tracks can be released with InterTrust technology. Of course, this will involve putting the CD into a computer as the additional tracks will not be available on a normal CD player. Further protected content will be available at the Daft Punk online club.
Although DRM technology will benefit content owners greatly by giving them more control over use of their material, users will have a lot less freedom in how they use the content they buy. "A lot of people who used to make party tapes won't be able to do that," says David Chance, executive vice chairman of InterTrust - unless, of course, they buy the rights to.
But DRM technology is only so much software. To tie it all together, digital rights clearing houses such as Reciprocal or Bertelsmann's Digital World Services, sit between retailers and content providers to control transactions.
Digital World Services has undertaken to provide DRM services to files swapped on Napster, which is now backed by the German company. For promotional material, companies such as article27 or DX3 use rights management to protect their clients' intellectual property.
The rights clearing houses create applications which serve the content to the user, send the keys to access the content, collect payment and pass it onto the content provider, splitting it between various interested parties if that is appropriate. The content will be hosted by another service. Reciprocal encrypts and packages it with the appropriate rules before allowing the consumer to download it, says John Schwarz, the company's president and chief executive.
US-based Reciprocal, which has more than 100 clients including all the music industry companies, is technology agnostic, says Mr Schwarz. Customers tell it what markets they wish to target and then Reciprocal defines a solution, choosing the appropriate DRM technology.
Although implementing a DRM solution adds to initial costs for content owners, there could be long-term benefits. It is early days, but if DRM is successful, distribution costs will plummet. "Instead of making £3 on a video, you could make £8-£9," says Mr West at InterTrust.