Philips Will Launch Open Digital Media System Soon
Tue Dec 16, 2003
By Lucas van Grinsven, European Technology Correspondent
EINDHOVEN (Reuters) - Philips Electronics (PHG.AS)(NYSE:PHG - news) said on Tuesday it was six months away from launching a system against illegal copying that will allow consumers to play digital video and music on any digital media player.
Philips hopes the so-called digital rights management (DRM) system being developed by Intertrust, which it jointly owns with Japan's Sony Corp (news - web sites). (6758.T), will replace a confusing array of proprietary systems.
Digital music stores which have opened on the Internet this year use different DRM methods to protect songs against unlimited copying. But consumers can then only play the music on computers, CD and MP3 players which support the same DRM system.
"Consumers want an open system, and the electronics industry wants it too," Ruud Peters, chief executive of Philips's intellectual property and standards unit, told Reuters.
U.S. software maker Microsoft (Nasdaq:MSFT - news), for instance, has opened music stores on the Internet that sell music encoded in such a way that they can only be played back with a Windows Media Player.
This player can be installed on any personal computer, and Microsoft has already struck deals with consumer electronics makers to build it into hundreds of devices.
"The electronics industry recognizes that Microsoft is a formidable player, but consumer electronics makers do not want to become dependent on Microsoft. They need an interoperable and independent system," Peters said in an interview.
"DRM is an accelerator which will boost digital sales of media, because it will convince media companies their content is protected. It should not be a competitive weapon," he added.
"We hope to have an interoperable system between now and six months," Peters said. When launched, the new DRM system will be endorsed by a large number of electronics companies and media companies such as film distributors and music publishers, he said.
"When we launch we want to give guarantees that it will be sufficiently supported," Peters.
Philips is Europe's largest maker of consumer electronics and the world's No. 3, while Sony is the biggest. Intertrust is the biggest holder of DRM patents, and all digital music players need Intertrust's technology to develop their own DRM system.
Philips and Sony bought Intertrust early this year to make sure key DRM patents would be available to everyone in the electronics industry, and also because they saw that DRM technology would become a crucial part of digital media. They have said they would make them available on reasonable terms.
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