Blackfriars' Marketing

Saturday, July 16, 2005

Robert X. Cringley, Apple/Intel, and display Digital Rights Management (DRM)

Tags: , , , , , ,

Robert X. Cringley this week speculates that the Apple/Intel deal was really to be able to provide content from the not-yet-announced iTunes Movie Store to Intel-branded DRM'ed entertainment devices to be available this Christmas as well as to video iPods.

I believe Robert is right to parse Steve Jobs claims about the Apple/Intel deal with a critical eye. I agree with him that this deal wasn't done just for Pentium chip speed or power consumption. I believe the real value of the deal is that Apple will have access to a wide variety of Intel technologies, including XScale processors, WiMax wireless chips, and flexible wireless systems (remember Intel's Labs' Radio Free Intel initiative? It asserted a goal to put wireless capabilities into every major system that Intel made!). Also, Steve has got to be looking at various types of digital rights management (DRM) technology for movie content, since that affects the bottom line of Pixar, the other company he leads.

I mention DRM because I believe this to be one of the new marketing battlegrounds between Apple and Microsoft. Engadget had a fairly scary article this week on the possible use of very restrictive DRM in Microsoft's Longhorn OS. In essence, the article says that when people upgrade to Longhorn, much protected content such as DVD movies and games will not display on non-DRM protected displays. Only those with HDCP (high bandwidth digital content protection) inputs will be able to display protected content at full resolution. On other displays, users will see a black screen or (if they are lucky) standard definition TV resolution.

As someone currently typing on a 1600x1024 pixel display, I can tell you many users will scream bait-and-switch if this type of DRM hits the market. Think about it. You upgrade your computer to the latest version of your OS. Of course, this OS has a shrink-wrap license that says once you install it, you can't return it. And then you discover that the best quality media you buy -- the latest HD DVDs or highest quality video games -- for your computer won't play on your old display. You need to buy a new one. Last I checked, very high resolution displays aren't cheap, often exceeding the cost of the computer that they are connected to. This is bad marketing at its zenith.

Oh, lest you consider this to only be a problem for computer users, the next generation of DVD players -- both HD-DVD and Blu-Ray -- and the next generation of video game consoles -- XBox 360 and Playstation 3 -- are likely to have exactly the same DRM as Longhorn will implement. The main difference: they expect to connect to TVs, which are more likely to boast HDCP ports. But computer displays are still back in the DVI and VGA era, so computer users will get to experience the hassles of DRM first.

So what will Apple do about display DRM if it launches the iTunes Movie store? We won't know all the pieces to this puzzle for a while. But we should get some ideas at the Intel Developer's Forum next month. You can bet I'll be there looking for technologies that Steve Jobs will be delivering to market in 2006 and 2007, as well as what Intel is implementing in its hardware for DRM. That should be a show worth watching.