Here's a piece on Dataplay, the company who will be supplying the drives for Eiger's nextgen MP3 players. Note the involvement of Samsung, a close strategic partner of Eiger's as well...
Toshiba Plans to Invest in Venture
To Market Encryption Technology
By ROBERT A. GUTH
Staff Reporter of THE WALL STREET JOURNAL
TOKYO -- The music industry is struggling for a way to guard its tunes
from Internet pirates. A former dentist from Colorado says he has the
answer.
Steve Volk, founder of DataPlay Inc., says his company next year will
launch a tiny disk that can securely store four hours of CD-quality music,
160 digital pictures or 350 digital books on a disk about the size of a bottle
cap. If his plans pan out, by this time next year a range of digital devices,
from Internet music players to electronic books, will be equipped with
DataPlay drives. On Thursday the company announced that one of its
investors, notebook-computer giant Toshiba Corp., will invest in a joint
venture to market DataPlay technology to electronics makers in Asia.
Armed with $64 million in funding, the Boulder, Colo., start-up is racing to
meet growing demand for new and secure ways to store music, movies
and other digital content downloaded from the Web and sold in retail
stores. But it faces big obstacles, including competing storage media
already on the market.
Mr. Volk says he is in advanced negotiations with book publishers,
video-game makers and music companies to begin selling their content on
DataPlay disks. He won't disclose the companies but says three of the
world's five largest record labels have plans to release a total of "hundreds"
of albums of music on DataPlay disks next year. Universal Music Group, a
unit of Seagram Co., is an investor in DataPlay.
"We've started to develop relationships with the major music companies,
and they have made commitments to offer prepared music on DataPlay
digital media," says Mr. Volk, a storage-industry veteran with a doctorate
in dental science from the University of Missouri.
DataPlay has also put together a list of hardware makers to back it. Mr.
Volk says his investors include Samsung Electronics Ltd., Toshiba and
Creative Technologies Ltd., maker of the Nomad digital-music player.
Toshiba Director Tetsuya Mizoguchi says his company is considering using
the technology in notebook PCs, portable music players and a "wide range
of products," but he wouldn't disclose specifics.
DataPlay is worth watching because its technology tries to address some
of the key problems with storage devices now used in electronic gadgets.
The appeal of the technology is its size and price. A DataPlay disk looks
like a miniature floppy disk, and including its colorful protective case is
about the size of a small matchbook. Each disk can store 500 megabytes
of data and will cost between $5 and $10 when they hit store shelves next
year.
The technology also is designed to alleviate fears of piracy among music
labels and book publishers. The DataPlay system is a combination of three
technologies: a one-time recordable disk, a small optical-disk drive, and an
encryption technology called ContentKey. The device will allow record
companies, for instance, to sell large amounts of music, video and text on a
single disk that is protected from being copied in digital form, thus
preventing mass piracy. The disks would also enable publishers to sell
consumers a variety of different products on a single disk. For instance, a
music label could sell a disk containing a music album for $12, but on the
same disk also encrypt additional music, pictures and articles. The buyer
could then, for a fee, download a "key" from the Internet to unlock that
extra content.
But DataPlay faces big obstacles. It is entering a highly fragmented
data-storage market, awash with a confusing array of options, from DVDs
to miniature hard drives. DataPlay's biggest competitor will likely be flash
memory. Already used in a plethora of gadgets like digital still cameras and
music players, flash memory is small, light, rewriteable and, unlike the
DataPlay system, has no moving parts that can break.
Mr. Volk says that DataPlay will enjoy a price advantage over flash, which
can cost $200 for 64-megabyte versions. Still, leading makers of flash
memory, including Toshiba and Intel Corp., are investing billions of dollars
to ramp up production of flash chips. That could rapidly lower the cost in
coming years.
Toshiba and DataPlay, through their joint venture DataPlay Japan Inc.,
expect to record annual sales of 30 billion yen ($278.1 million) in products
and licensing fees within three years. In January at a consumer-electronics
industry show in Las Vegas, about a dozen hardware vendors will
demonstrate 20 DataPlay products, Mr. Volk says. Products will be
available in large volumes in the third quarter of next year, he adds.
Write to Robert A. Guth at rob.guth@wsj.com |
