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Commentary: DRM's short-term woes

The slow road to maturity for digital rights management technology has caused it to lose its immediate market opportunities. New developments may take several years.

By Mark Gilbert and James Lundy, Gartner Analysts

Digital rights management once promised to protect content published on the Internet, but few companies showed an interest. New opportunities may arise, such as in the enterprise market, but probably not for several years.

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DRM allows corporations to put a "leash" on their content to control its use after it leaves the house--for example, to allow it to be transferred to only a few specified users. Without that capability, corporations are reluctant to distribute truly high-value content electronically for fear it will be copied and shared, thereby jeopardizing their business. Therefore, commercial publishing, music, film and other industries--including the legal profession and pharmaceuticals--continue to base their businesses on distributing content through channels other than the Internet.

The slow road to maturity for DRM technology has caused it to lose its immediate market opportunities. In 2000, with Napster roaring ahead, DRM promised to secure rights and revenue for creators and publishers distributing content over the Internet. However, legal action, rather than rights-management technology, shut down Napster, and few companies paid attention to DRM, so the market barely developed.

Of the nine DRM vendors Gartner followed in 2000, five small, independent companies have run into trouble. Three others are large information technology firms that can afford to maintain their investments in the field, regardless of the poor market conditions today.

Much of this situation stems from the slow rate of change in business and consumer media-buying habits. Consumers are not used to paying for content on the Internet. If they can't find the content they want or if they must pay for it, they typically use a search engine to try to find free copies. Consumer buying habits must change before DRM can take off. In the business-to-business area, the contracts that have governed B2B interactions for years are still good enough for content usage. This area hasn't adopted DRM much, either.

DRM will probably never develop as a distinct market. Rather, DRM capabilities will likely be integrated into larger offerings, such as enterprise software suites and home media servers.

Gartner believes that the clearest opportunities for managing digital rights lie in the enterprise market. Collaborative commerce and Web services will lead corporations to put more of their business online and to interact more often with partners, suppliers and customers over the Internet. Accordingly, corporations will increasingly feel the need to protect their documents and intellectual property through controls such as DRM can provide.

Just as important, the world of business involves structured relationships, so enterprises will more readily accept the controls that a vendor places on its documents and software.

Restrictions such as these pose a big hurdle for acceptance of DRM by consumers, since it will keep them from copying and trading content among themselves as freely as they are able to do today.

(For a related commentary on digital rights management issues, see gartner.com.)

Entire contents, Copyright © 2002 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.