On April 27 at WinHEC, Microsoft announced a joint venture with Xerox called ContentGuard, a startup Internet company that is a spin-off of Xerox. ContentGuard will provide digital rights management (DRM) software technology that protects and manages books and documents, music, software, and other valuable content for distribution over the Web. Microsoft will contribute future technology and startup money to this venture, and Xerox will contribute about 17 key patents to the new company. Xerox will own 75 percent of ContentGuard, and Microsoft will own the remaining 25 percent. ContentGuard will be based in McLean, Virginia, with offices in Palo Alto and El Segundo, California. A striking example of the need for this new DRM technology involves Stephen King's online release of his e-book novella, Riding the Bullet. With downloads of the e-book exceeding 500,000 in the first 48 hours, it didn't take long for hackers to break the book's encryption code and illegally distribute the book worldwide. Steve Ballmer, Microsoft president and CEO, said, "People love getting content delivered to them wherever and whenever they choose, and we want to ensure that they continue to have many opportunities to do so. The secure and safe delivery of digital media is of primary importance to not only everyone in the business of content distribution, but consumers of this information as well." Rick Thorman, Xerox president and CEO, added, "ContentGuard will offer a safe and secure e-commerce environment for publishing and distributing any high-value or copyrighted material." Industry analysts anticipate that future word processing documents, spreadsheets, email messages, media players, and e-book readers will all have built-in DRM features, and that these features will be almost transparent to the document publishers and readers. High-value digital content, such as market research, business reports, books, periodicals, sheet music, patent applications, and academic course packs, have all been early adopters of this technology. Xerox and Microsoft jointly announced plans to extend ContentGuard's technology to audio and video content. Xerox developed ContentGuard's DRM technology at its Palo Alto Research Center and augmented it with contributions from Microsoft. ContentGuard will provide software, consulting services, and Internet-based solutions to help content distributors disseminate digital content over the Internet in a way that's protected but still easily accessible to consumers. ContentGuard's Internet content protection software locks digital content, preventing unauthorized users from forwarding it or copying it unless they have paid or registered with the content owner. A reader must obtain a digitally-signed license to unlock the content. When users attempt to access a ContentGuard-enabled document, they are sent to a DRM Web site where they make a payment as they would in any standard e-commerce transaction. The user can then download the digital content and see or hear it by employing a standard viewer or player. Although the user can distribute the work, subsequent readers or viewers will also require a registration. ContentGuard currently has competition from other companies offering DRM technology in the market. ContentGuard uses Extensible Rights Markup Language (XrML). To work broadly, this technology requires a standard for DRM on the Internet. In the WinHEC announcement, Microsoft and Xerox noted that Microsoft and ContentGuard will collaborate on the development of a common DRM standard for the digital content. ContentGuard will deliver its DRM XrML code royalty-free to developers and content providers to make this standard widely available. ContentGuard will continue to collaborate with Microsoft and Xerox on future development of DRM technology. Microsoft announced that it will support ContentGuard's licensing and rights labeling format in its own DRM solutions. Microsoft Reader, which displays books on screen, will be the first product to incorporate the new ContentGuard technology when it appears this summer. ContentGuard will also extend its technology to support future versions of Windows Media Player and Windows Digital Rights Manager.