An exhaustive new study is estimating that the digital rights management industry will grow from $600 million worldwide in 2004 to $1.9 billion in 2009. After all, digitally delivered media that's so
(The Hollywood Reporter) -- An exhaustive new study is estimating that the digital rights management industry will grow from $600 million worldwide in 2004 to $1.9 billion in 2009. After all, digitally delivered media that's so popular nowadays needs protecting.
Leading the way will be DRM technology for protecting content delivered to mobile devices. That market, which was virtually nonexistent last year, will scurry to $525 million in 2009, according to "The Business of Digital Copyright," a study from research firm Digital Tech Consulting.
The DTC study also profiles more than 20 companies destined to benefit from the money that will be spent to protect digitally delivered content, including ContentGuard, Entriq Inc., Intertrust Technologies Corp., Macrovision, News Corp.-controlled NDS Group and Microsoft Corp.
The 241-page study projects that 311.7 million mobile hardware units capable of receiving such DRM-protected content as video and music will be shipped in 2009, up from 17.1 million last year. The figure represents 41% of all content-protected hardware units that will be shipped in 2009.
The second-largest category of devices are DVD players, of which 180.1 million will be shipped in 2009, up from 74.6 million last year, the study predicts.
Although DRM-enabled hand-held devices have been around since 2003, meaningful licensing fees won't be incurred until this year, the report said.
Driving the growth in the hand-held sector is the adoption of smartphones. While worldwide sales of mobile phones declined slightly last year, sales of smartphones have enjoyed quarterly growth rates of as high as 40%.
Also, the Open Mobile Alliance DRM, led by Nokia along with Motorola, Sony-Ericsson, Sanyo, Toshiba, LG Electronics, Siemens and others, has been a success.
The study found that users will pay an average of $3.95 per month to receive rich content, with its projections being based on recently announced licensing terms for the OMA DRM of $1 per device and 1% of content transactions.
While the mobile content market will drive the growth of the DRM sector in the coming years, music will not provide a similar boost, the DTC projects. The music CD category is forecast to be a relative laggard, generating just $130 million for the DRM industry and its players in 2009, compared with $15 million in 2004.
According to the study, 5% of all CDs shipped last year contained some sort of protective technology. While that's expected to grow to 50% in 2009 -- even taking into account considerable consumer displeasure with CD-protection technology -- declining CD sales and a drop in what rights holders are willing to pay in order to protect CD music will keep DRM revenue growth more muted than many experts thought.
The study found that content publishers two years ago were willing to pay 30 cents per disc to protect CDs, though that has dropped to 8 cents this year and should hold steady through 2009.
DTC president Myra Moore said another emerging business that bears watching are video services that are expected to be launched on a broad basis by telecommunications firms. Telephone companies are expected to spend about $25 billion to upgrade their systems to compete with cable and satellite TV firms, according to various estimates.
The study indicates that video DSL -- as these services also are known -- accounted for $100,000 in DRM revenue last year, though that will grow to $83 million in 2009, when 9.1 million DSL set-top boxes will be shipped. The estimates include $66 million in revenue derived from conditional access, while the rest will come from the lesser categories of analog and digital copy protection.
While conditional-access technology for digital cable runs from $7-$15 per box to deploy, DTC forecasts it will cost $7-$8 per box for video DSL.
While some content companies have appeared skeptical of telco TV, remembering how easily music was shared illegally over the Internet, such concerns are unfounded, Moore said. "Just because telcos are using Internet Protocol to deliver content, it doesn't mean it's not a closed system," she said.