Apple: Cross Platform DRM

As pre­dicted, Apple intro­duced a ver­sion of iTunes for win­dows today. A lot will be writ­ten about how this solid­i­fies Apple’s lead in the dig­i­tal music player mar­ket but what many may be over­look­ing is how Apple is push­ing its own ver­sion of Dig­i­tal Rights Man­age­ment into a wider mar­ket. I sus­pect this is a strat­egy sim­i­lar to the one they used in the early 1990s to make Quick­Time a strong con­tender for dig­i­tal video.

While com­pa­nies from Intel to Microsoft are talk­ing about how they plan to imple­ment dig­i­tal rights in the future and are tak­ing ten­ta­tive steps in that direc­tion, Apple is work­ing on a strat­egy that cov­ers mul­ti­ple plat­forms begin­ning today. The iTunes music store may be an inter­est­ing story in terms of the con­sumer mar­ket but it seems to me that there is also an inter­est­ing play at hand for a busi­ness to busi­ness model. If Apple suc­ceeds in its imple­men­ta­tion of the music store (and there is lit­tle doubt that they will), they could turn around and start offer­ing a set of prod­ucts and ser­vices to orga­ni­za­tions deal­ing in dig­i­tal goods.

I believe that the iTunes music store will even­tu­ally drop the music part of its name in the future, when video becomes the thing to down­load. The under­ly­ing data struc­ture already points to Apple’s ambi­tion to move into other media for­mat. So let’s look into the future…

As broad­band becomes more per­va­sive, video becomes an attrac­tive thing to down­load. At that point, Apple start offer­ing TV shows and movies in a store sim­i­lar to the Apple music store. They can then decide that there are areas they want to play in (read: where they want to man­age the store) and other areas where they might want to offer cus­tomized sys­tem. Show­ing the iTunes music store as a proof of con­cept of their way to do DRM, they approach large stu­dios and/or labels. From there, they can show that their store is run­ning on Apple hard­ware and runs a server ver­sion of their oper­at­ing sys­tem. Much like they are pack­ag­ing stream­ing solu­tions with that soft­ware, they could start pack­age dig­i­tal rights man­age­ment solutions.

So who’s the mar­ket here? Well, for starters, Apple is prob­a­bly not going to want to cre­ate too much com­pe­ti­tion with its busi­ness to con­sumer seg­ment so I think look­ing at movie stu­dios may not be the right thing to do. How­ever, they could look at TV sta­tions, both in the US and abroad and start offer­ing on-demand video ser­vices, wrap­ping Quick­Time (as a stream­ing for­mat) into their own pro­pri­etary DRM fla­vor. Going beyond that mar­ket, they could also look at the cor­po­rate mar­ket for com­pa­nies that want to do inter­nal pre­sen­ta­tions but ensure that only cer­tain groups have access to cer­tain presentations.

Another poten­tial direc­tion for Apple would be to look at soft­ware deliv­ery. Using their pro­pri­etary DRM and an infra­struc­ture sim­i­lar to the one pow­er­ing the Apple music store, they could deliver soft­ware pack­ages either on a per-use basis, or as com­plete pack­age. Now that they have crossed the divide between the mac mar­ket and the win­dows PC mar­ket, there are a lot of poten­tials for them to fig­ure out how to mine the field.

Bot­tom line: Apple now has a strong cross-platform offer­ing for dis­trib­ut­ing pro­tected data. As the early lead in the mar­ket, they now have poten­tials to expand a lot beyond the world they run in.

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