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Technology Stocks : InterTrust Technologies (ITRU) -- Digital Rights

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To: Walter Morton who wrote (22)11/12/1999 4:52:00 PM
From: chris431  Read Replies (3) of 201
 
Creative Secures MP3 Player
by Christopher Jones

wired.com a.m. 12.Nov.1999 PST

Despite the difficulty of building
consensus across the music industry, the
RIAA's goal of creating a secure digital
music delivery platform appears to be
within reach.

Portable players with skeleton support for
SDMI are starting to pop up, and just in
time for the Christmas rush.

On Thursday, Creative Labs announced
that its next version of the Nomad player
will support a digital rights management
system, a core component of SDMI
compliance.

The Secure Digital Music Initiative (SDMI)
is a technology standard that the
Recording Industry Association of America
is developing together with software and
hardware companies that aims to provide
an interoperable system for securing
copyrighted music.

"We have basically what we need today
to deliver a product based on the [SDMI]
specification," said Chris Smith, the
portable audio program manager at
Creative Labs. "There are a number of
digital rights management systems that
will offer us the facilities to offer the
protection that is required [to build into
the Nomad II]."

The first phase of the SDMI system
requires that manufacturers implement
several security components, foremost
among them a digital rights management
(DRM) system that will allow record labels
to securely distribute and track files as
they are transmitted over the Net and on
to portable players.

The Nomad II's DRM capabilities uses
InterTrust's container technology and
software created by MusicMatch. But,
since the SDMI specifications are still in
flux, none of the portable music
manufacturers will be able to put
together an SDMI-compliant system by
Christmas.

"We will have an SDMI-capable
[upgradeable] device out by Q4," said
Smith. A fully SDMI-compliant device will
most likely be available in Q1 of 2000.
Creative will also post a download in Q1
to make the early players compatible.

In addition to its SDMI components, the
Nomad II will use flash card memory, have
a built-in FM tuner, voice recording, and
connect to a PC via a Universal Serial Bus
(USB); a wired remote also comes with
the package. Smith said the Nomad II will
support MP3 and probably Microsoft's
Windows Media Audio (WMA) format.

Smith said he expects to see about a half
dozen portable players in Q1 that are
SDMI-compliant. Each of the players may
choose different music formats --
Microsoft's WMA, MP3, AAC, and Lucent's
EPAC are the current choices -- and
different DRM systems.

Thomson's Lyra was the first portable
player to advertise SDMI-friendly
features. The Lyra can encrypt MP3
and/or Real Network's G2 files and save
them to CompactFlash memory cards.
Like the new Nomad, the Lyra is
re-programmable to adhere to the SDMI
specifications when they are ready.

Microsoft threw its hat into the DRM ring
on Wednesday, when it announced the
Windows Media Device Manager (WMDM),
software that links DRM to audio
hardware and software players.

Whether consumers will bite on these
security-conscious players is another
matter -- and one that's squarely on the
shoulders of the record industry.

"It's incumbent upon the labels to make
that value [SDMI-equipped players]
valuable said Smith. If they don't put
anything up, people are just going to buy
the unprotected MP3 players."
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