DRM Conflicts Delay Lucrative 144 Million Device Market, Says Strategy Analytics

According to the Strategy Analytics, insufficient and incompatible digital rights management (DRM) solutions represent one of the last remaining hurdles facing technology equipment providers racing to cash in on the "connected home". In a connected home, consumers can download and transfer music and video content between their home PC, home theater and portable media devices.

The Strategy Analytics report, "Connected Home Rollouts Await Direction From Content Owners", finds that major content owners such as Disney, Fox and Warner are still not convinced that digital rights management (DRM) solutions are meeting their needs. The analysts say connected home proponents -- such as Intel, Sony and Philips -- must give high priority to solving DRM interoperability challenges if they are to maximize the revenue potential from this 144 million connected device market opportunity.

"Consumers increasingly want to share media between different digital devices," said David Mercer, Principal Analyst at Strategy Analytics. "But incompatible DRM solutions mean that they cannot know whether a particular piece of music or video content will play on a particular device. While the efforts of organizations like the DLNA and Coral are commendable, the process of establishing widely accepted interoperable and open standards is likely to prove lengthy and arduous. Apple's iTunes/iPod model demonstrates that proprietary and incompatible solutions can be successful, in the short term at least."

According to the report, wider adoption of media-sharing devices will be delayed as long as content owners disagree between themselves on how they wish to benefit from DRM technologies. Technology providers, in turn, cannot develop a horizontal market for connected devices until major content providers have agreed on a common framework of DRM interoperability.