WinInfo Daily UPDATE, February 9, 2004

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1. In the News

by Paul Thurrott, [email protected]

Disney Adopts Windows Media DRM
Ending days of speculation, entertainment giant The Walt Disney Company announced a multiyear agreement with Microsoft to license Microsoft Windows Media technologies, including the Digital Rights Management (DRM) component that can be used to protect the delivery of digital content. Windows Media technologies are increasingly gaining favor with Hollywood, as content creators seek to find secure ways to expand into new digital markets and Internet content delivery. Disney is the second major Hollywood player to embrace the technology in recent days; Time Warner licensed it last fall. But the combination of Disney and Microsoft represents a melding of two of the most respected brands in America and reestablishes Windows Media as the de facto standard for digital-media delivery.
"Disney is dedicated to providing consumers with entertainment content on various platforms, and this agreement with Microsoft helps facilitate those new business initiatives," Peter Murphy, senior executive vice president and chief strategic officer for The Walt Disney Company, said. "The continuing migration of content from analog to digital formats has exciting implications for both consumers and content owners, and we believe this agreement will accelerate this evolution and bring about a vibrant market for legitimate, high-quality entertainment delivered to new categories of end-user devices, such as personal media players and home media center PCs." Microsoft and Disney revealed three primary focus areas for their nonexclusive agreement:
- creating and securing delivery of high-definition digital content enabled by Microsoft's new Windows Media High Definition Video (WMV HD) format
- accelerating digital-content delivery to consumers over networks, on optical media, and on devices such as Portable Media Centers
- ensuring the seamless flow of secure content among devices throughout the home and on portable devices

Although the companies haven't revealed specifics of the deal, analysts expect Disney to use WMV HD technologies to deliver animation, live-action movies and sports, and other TV content through ESPN, the Disney Channel, and Disney's other outlets. The linchpin of the deal is Disney's licensing of Microsoft's DRM technologies, a platform that can bridge the gap between PCs, set-top devices such as connected DVD players and digital-media receivers, and portable devices such as the recently announced Portable Media Centers. In contrast, Apple Computer's FairPlay scheme, used in the company's wildly successful iTunes Music Store, is specific to that store and isn't extensible to other scenarios. Furthermore, to date Apple has refused to license the FairPlay DRM technology to third parties, further limiting its appeal. On the Microsoft end, fears about the software giant extending its reach into new markets has limited its Windows Media technologies' spread in some cases. But the technical excellence of Windows Media--proven by its use in digital-movie projection and WMV HD DVD titles--is swaying content creators in Hollywood.

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