Will Zunes Zap Unauthorized Content?

Microsoft’s Zune and NBC’s downloadable television shows stand at the center of the latest digital rights management (DRM) dustup. On Wednesday, The New York Times’ Saul Hansell reported that Microsoft might build a copyright manager into every Zune player, ostensibly in response to an NBC demand for copyright protections of its downloadable content.

In the article, Hansell qualified that the development was only a possibility, not a certainty. However, the article suggested that NBC preferred Microsoft’s Zune Marketplace over Apple’s iTunes store — from which the broadcaster pulled its programming last year — because Microsoft was willing to attempt to develop a program that would filter out unauthorized copies of copyrighted material and prevent them from playing on a Zune device.

Hansell talked to J.B. Perrette, an executive with NBC Universal’s digital distribution unit, who asserted that NBC split with iTunes because of both price flexibility disagreements and disagreements about filtering out pirated content.

Later, Microsoft’s Cesar Menendez posted a response on the Microsoft Zune Insider blog.

Cesar wrote, “We know you guys are following this discussion closely, and wanted to be absolutely clear on this issue: We have no plans or commitments to implement any new type of content filtering in the Zune devices as part of our content distribution deal with NBC.”

That, in turn, prompted a clarification on the original New York Times post, as well as a comment from Hansell on the Zune Insider post, which added a small clarification in the form of an open-ended Microsoft spokesperson quote: “We have agreed to work with NBC across a range of topics, and protection of copyrighted material is certainly one of them.”

What’s Definitive?

One commenter on the Zune Insider post asked the most obvious question:

“Are you saying that Microsoft will never implement this type of thing in the Zune device or Zune software, or simply that there are no plans to do so at the present? Those are two very different things and I thing [sic] Microsoft needs to be very clear on this,” wrote a poster identified as “Dan H.”

As of press time, this comment had not been answered by Microsoft’s Menendez on the Zune Insider post.

The DRM Storm

Regardless of Microsoft’s official and unofficial statements, digital distribution of copyrighted content is laden with issues and controversies that are far from being resolved. While Apple’s iTunes solution contains some DRM protections, which have been mostly accepted by consumers, Apple also exerts control on its own vision of digital distribution: Buy what you want at a low fixed price and play it on Apple hardware. Even though users have flocked to Apple’s iTunes/iPod model and made it a clear market leader, it doesn’t solve the problems of old-school media suppliers, nor does it generate ad-supported revenue or allow users to easily share — or socially promote — the content.

Those issues brought Apple and NBC to a stalemate last year, leading the broadcaster to discontinue offering its programs for sale on iTunes.

“One thing this is clearly still showing is that copyright in this digital age is a still a big red hot button,” Mike McGuire, a vice president of research for Gartner, told TechNewsWorld.

“If you look at the music industry battling this, they’re realizing they have to embrace the online distribution transition. This is the challenge: Television shows are used to having this closed system for digital distribution, but with the consumer essentially in charge — consumers are content foragers, looking for whatever they can find — the industry is still struggling with finding the right business model,” McGuire explained.

“Ad-supported is what they understand, which his why NBC is doing Hulu,” he added. Hulu lets consumers stream ad-supported television shows to their PC or Mac.

Avoid Lock-Down

Gartner’s take on the matter tends to recommend that content producers lean away from the “notion of a hardcore lockdown and more toward ‘digital experience management,'” McGuire said.

For example, it’s pretty clear that many consumers enjoy the use of social networks to communicate and share snippets of shows that interest them, which acts as a promotion of a show, driving additional interest that could help build a bigger fan base. The challenge is to monetize the use of sharing content without making it overly obtrusive, whether it’s ad-supported or not — and at the same time find a balance that will let users view their content wherever or however they want.

“It’s an ongoing issue,” McGuire said, noting that he expects that Microsoft is trying to “find a middle path.”

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