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New Approach to Digital Rights Management

Copy protection, watermarks, digital fingerprinting, and conditional access are all Digital Rights Management (DRM) technologies used with the intent to enforce copyright protection of video content. However, the problem is, typically they don't.

Apparently, efforts to stop the reported 12 billion peer-to-peer (P2P) downloads occurring annually in the U.S. have come up short, according to the latest market study by In-Stat.

In-Stat believes content owners and service providers need to shift from content protection to a two-pronged content monetization strategy consisting of digital rights information management and offering a better user experience than consumer P2P services.

"What is needed is a new approach to monetizing digital content including moving a relatively small group of consumer households that do the bulk of P2P downloading (power users), to legal services," says Keith Nissen, In-Stat analyst.

The question is whether the big media companies in the video industry wishes to control its own destiny, or get crushed by technological change, similar to what is occurring in the record labels within the music business.

In-Stat's market study found the following:

- U.S. broadband households download 14 billion videos copies each year; 85 percent are not licensed.

- In-Stat sees watermarking becoming a growing technology to track licensed usage rights.

- A migration of power user households from P2P to legal video services would potentially generate $1.4 billion in subscription revenue and $1.1 billion in advertising revenue.

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