Happy New Year to all of you.  Here on this page, we have been discussing content distribution and protection issues for two years, beginning in January of 2007. Our core story has been that there is a tremendous business opportunity for content owners in digital distribution, and that watermarking is the enabling technology, and that SmartMarks, USVO’s watermarking technology, is a great choice in watermarking.

Most of the news so far this year is very negative, but there have been some bright spots. Chief among them was Apple’s announcement that it was dropping DRM from its iTunes store. Nearly two years after Steve Jobs wrote an open letter to the world on his “thoughts on music” in which he criticized DRM, the company has worked out agreements to eliminate it from the world’s single largest music store.  It is important to note that the very companies that it took this long for Apple to work out DRM free licenses with, had already allowed DRM free sales at Amazon.com and Play.com among others, for over a year. 

One doesn’t have to dig too deeply to see a number of agendas and issues being played out here, but for those looking forward to, and investing their efforts in a world free of transaction blocking, customer hating, inhibiting prevention oriented applications and thinking, this is a landmark. One challenge in the watermarking space is to distinguish it from DRM, so let me state once again that SmartMarks are not DRM, but rather an enforcement approach to content security.

As stated in these pages time and again, the key to leveraging digital technology for content distribution is trust. All of us prefer to deal with entities we know and trust, and for as long as the motion picture industry has existed, it has not trusted new technology or its customers with that technology. As a result, it has not benefited from the power and cost effectiveness available there. 

Instead suspicion has been the dominant thinking. If theft was possible, it was probable, even though the vast majority of computer enabled customers just wanted the content as conveniently as possible.  Until iTunes was rolled out, that convenience was supplied by various pirate services. Because of its success, iTunes has become the flagship of a slowly modernizing music industry. So the dumping of DRM from that ship is clearly worth the headlines and analysis given it.

A great summary of web reactions was published at Billboard magazine, the trade paper of the music industry. Opinion varies, but in all cases the impact is considered significant. At the Boston Globe, the judgment is right in the headline, “Apple’s iTunes changes may show digital rights management’s a loser”

The chip heads have dug in and have investigated the details of the execution as well, and pronounced their own judgments. This too bodes well for watermarking, because while the songs are now DRM free, they are not without some security. Turns out that Apple is making each download traceable to the email address registered to the iTunes application that downloads the song, whether that is on a computer or the latest channel for delivery, the Apple 3G iPhone.  While a savvy user can be expected to work around this, as they have much of the restrictive aspects of iTunes, the model for enforcement strategy is in place at the world’s largest music retailer.

While it is nearly a decade that the motion picture folk have been saying that they aren’t going to do what the music people did, and have done just what the music industry had done, there are still those saying that DRM free video downloads won’t ‘ever’ happen. But the cognoscenti are already calling for DRM free video. Driving this demand is the need for new sales- “But until the day consumers can buy content once and move it to any device they want, the market for purchasing video content won’t see the kind of growth that many of us in the industry have been waiting for.”

And this is the big promise of the decision. For the first time, in a well established marketplace, vendors can watch how DRM free content sells. This is the beginning of the DRM free era in content. We should expect more theft, a number of new schemes for cost avoidance and more. But key will be how much new business Apple can do now that one of the restrictive aspects of the iTunes/iPod/Apple silo has been deleted.

Welcome back, and expect to see more comments in the days ahead as the pressure on content distribution companies create new opportunities, especially for strategies that are targeted on new sales.