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Driving A New Approach To Mobile Music
Issues & Implementations
Devon C. Burke MSc.
Principal Consultant, Telecom Media & Entertainment
About Me
 A member of the Technology profession within the global Telecom Media and Entertainment
(TME) practice of Capgemini
 Have taken a active role in the research and development of Digital Rights Management and
Digital Media Management offerings.
 Have worked with several global Wireless companies on various aspects of their Digital
Media & Digital Rights Management implementations for 2.5 & 3G services, including:
• Leading the technical due diligence and DRM selection process for the first European 3G service
• The implementation of the world’s first DRM protected 2.5G Music Download service
• The regional implementation of a Global 3G Full Track Music Download service.
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Agenda
 IPR Background
 DRM: Definitions and Key Activities
 The ROI Conundrum
 Mobile Music Revenue and the Walled Garden Approach
 Emergent Mobile Music Scenarios
 Music Service Implementation Issues
 MP3 phones versus MP3 Players
 Summary & Conclusions
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IPR and Digital Rights Management
Changing Times
Intellectual Property and the Digital Era
 In the early 17th Century, the Japanese Shoguns kept all European traders out of Japan,
Only the Dutch were allowed restricted trade.
 In 18th Century England, the first work published under Handel’s name were songs from
the opera Rinaldo.
 John Walsh’s firm made £1,500 from it, but Walsh was in the habit of giving Handel only
£20 for the right to publish an oratorio.
• Handel wrote to Walsh “My Dear Sir, As it is only right that we should be on an equal
footing, you shall compose the next opera and I will sell it.”
 In recent years, the Rolling Stones were paid a large sum by Microsoft for the rights to
use ‘Start me up’ - because they kept the publishing rights to their own music.
 The Napster phenomenon engendered a public belief that high quality content will
always be available at no cost. Content Providers now battle to challenge this belief.
 Today, having a DRM system is business imperative. Content owners will no longer enter
in to commercial activity with a distributing company that does not have comprehensive
rights management as an integral part of a Digital Media framework.
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Digital Rights Management - Some Definitions
 Digital Rights Management (DRM) is the secure exchange of intellectual property, such as
copyright-protected music, video or text, in digital form over many different digital channels, or other
electronic media, such as CDs and removable disks.
 DRM is ‘Technology that protects content against unauthorised access, monitors the use of content,
or enforces restrictions on what users can do with content.’ (Forrester)
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Digital Rights Management Value Chain Activities
Contract
Rights
Manage
ment
The
registration of
contract terms
and rights,
tracking of
usage and
payment of
royalties
(residuals)
Rights
Informati
on
Storage
The storage of
rights
information
e.g. play track
5 times; and
usage rules
e.g. if they
have a UK
domain and
have paid 3, as
well as rights
segmentation
and pricing
structures etc.
Licence
Manage
ment
The
management
and issuing of
licences in line
with the Rights
and
Conditions.
Without a
licence the
consumer
can’t use the
content.
Persiste
nt
Content
Protectio
n
The use of
encryption,
keys and
digital
watermarking
to securely
package digital
content.
Clearing
House
Services
Managing and
tracking the
distribution of
the packaged
content and
the licence in
line with the
defined Rights
Information
Billing
Services
Charging of
consumers for
purchased
content and
payment to
parties within
the value
chain.
This stops the
consumer
using the
content
without a
licence.
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High Level DRM Process
Financial
Clearing
House
Handles
Payment
Billing Services
Author/
Creator
Publisher/
Aggregator
Creates
Content
Packages
Content
Rights Information
Storage
Distributor
Holds
Protected
Content
Service
Provider/
eTailer
Sells/Provides
Content
Consumer
View/Play/Read
Content
Digital Asset
Protection
Contract & Rights Management
Content
Clearing
House
 Content Process
 Finance Process
 Rights Management Process
Authorises
Usage
Licence Management
Super
Consumer
Copies
Content
Clearing House Services
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ROI, Mobile Music Revenue and Walled Gardens
Changing Times
The ROI Conundrum – Show Me The Money!
The Music Industry
“In an industry renowned for aggressive pursuit of a healthy Return on Investment (ROI) from its successful artistes, and
where it is the norm to invest large sums on developing new acts, why does it take the introduction of enabling technologies
like the Internet and compressed digital audio to really shake things up? The ability to share and swap music may have
permanently shifted the balance of power in favour of the end-user, and we may be witnessing the next stage in the
evolution of the music business” *
* Jude Umeh - Evolving the New Music Business
The Mobile Industry
“We believe that operator strategy will be driven by (trends including) :
The unsustainability of a mobile operator business model founded on high subscriber acquisition costs (principally handset
subsidies), high churn levels and falls in the price per minute of mobile voice telephony.
Mobile operators’ mounting frustration with their inability to derive meaningful revenue streams from mobile data services (not
including SMS).” **
** I N F O R M A T E L E C O M S & M E D I A - MOBILE INDUSTRY OUTLOOK 2006
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Mobile Music Revenue and the Walled Garden Approach
The Push For Revenue
 Mobile operators dream of growing healthy revenues in the soil purchased with their 3G license
investments.
 In a survey conducted by Forrester earlier this year with 23 European mobile operators; almost 60%
thought that mobile music had the highest revenue potential of all the current mobile data services
 The major Mobile companies have invested millions of Euros in their own ‘Portal’ services, such as
Vodafone Live, O2 Active, and T-Zones. However, they are coming to realise that these are not delivering
the expected returns
 There is a realisation that it is an expensive business running your own content and portal teams, and that
it can be a better idea to let external partners source and manage the content, and derive revenues from
traffic and billing services
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Emergent Mobile Music Scenarios
Emergent Mobile Music Scenarios
DAB Downloads
 UK digital radio station Heart FM is beta testing a new service that will enable consumers with Digital Audio Broadcasting
(DAB)-enabled mobile phones to purchase songs they hear on the station as permanent downloads using Windows Media
DRM.
Dual Device Downloads
 There has been a marked increase in the amount of download services that are finally beginning to support end-users desire
for downloads that live on their phones and their PCs. This is usually facilitated by supporting dual-DRM systems such as
OMA and Windows Media
 This has only become possible because pent up user demand has forced the issue
Full Track and Video Downloads
 Many mobile operators have launched ‘Full Track’ Music Download services over the last 2 years, with some operators such
as ‘Three’ focussing on Video Downloads.
 In September 2005, Vodafone passed the 1 millionth full-track download by its customers after four months of their service’s
operation.
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An Outline Full Track Music Download Service
 Today, Full Music Track Downloads (FTMDs) are generally a mandatory product for 3G providers, and
provide the ability to download full length music tracks via service providers ‘Portal services’ such as
T-Zones or Vodafone live! - to 3G handsets.
 To use FTMD services, a customer must “unlock” the download content with the appropriate usage
rights via DRM Technology.
 There are many flavors of Digital Rights Management (DRM) software in use by the mobile
companies, but the main standard in use throughout Europe today is the Open Mobile Alliance (OMA)
DRM 1.0 standard.
 A Full Track Music Download solution usually consists of several individual component applications:
• The Ingest Server Front-end
• The License Management Server Subsystem
• The License Packaging Server Subsystem
• The License Storage Server Subsystem
• The License Delivery Server Subsystem
• The Transaction Control Subsystem
• The Customer Care (CC) Subsystem
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Typical FTMD Logical Architecture Groupings
Centrally Hosted
LogicalFTM D
Architecture M usicProvider
Label/
Royalty
Reporting
Ingest
Workflow
System
Local/Offline
Packaging
Tools
Content
Mgmt/DAM/
Storage
LogicalFullTrackM usicDownload Architecture
TC Customer Care
MW
Customer
Care (1)
‘My Music’
Folder
LogicalArch
M ediation +M IS
CAE 2.1
XACCT
CRE 3.1
CLARIFY
3PI 5.1
Terradata
LogicalArch
Billing +
LogicalArch
CC + UE Support
ER 4
ER CC
PPA S
TC CC
interface
(see 2)
ICCS
MW CC
Interface
(see 1)
Customer Care (2)
DRM Content Packager
License Management
Server, inc License
Production
LicenseServer
Packaging Server
Transaction Controller
(inc Transaction W/H)
Transaction Control (Workflow Server)
Dow nload
Server
License Host
(Key Store & License
Delivery Server)
LogicalArch Core
Stack
LogicalFTM DM essaging Stack
SMS-C
Licence Key & RO Delivery - Via SMS
SMS-C
Connector
Push Gatew ay
Logical Core Stack +
FAST 4.0
(Search 5.n)
Openw ave MAG6 WAP GW
Access 2.n
MO Delivery - Via WAP
Dublin Hosted
Locally
Hosted
3 G T e rm in a l
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A Sample FTMD DRM Use Case – 1st Time Access
8) OTA ‘successful’ Install Notification
7) MO download via Redirect URL
6) Decrement FTMD Credit
OTA Confirmation
8
Mo Delivery
7
2
5
3rd Party
(Musiwave)
5
Core Stack
1
1) User
requests
Content
4) Present
‘successful
purchase’
page
9
5) … Call PML,
present
Redirect URL
2
7
3
4
6
2b) Offers FTMD ‘Free Trial’
subscription option, or ‘buy
now’ option
2c) Customer chooses ‘Free
Trial’ subscription option
2d) Create ‘Free Trial’
subscription, populate ER
FTMD account with 5 credits
5
Musiwave
Download
Server
9
5) Init MO transaction
9) Initiate
RO delivery
transaction…
Transaction
ER4
SMS-C
3
Clarify
Control
9
10
9) …and
deliver RO
10) Confirm SMS delivery...
3) Record ‘Free Trial’
subscription in Clarify
10) … and log
Success or
/failure on TC
9
RO Delivery
DRM License Server
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Typical FTMD Physical Component Overview
DMZ (VLAN 503) 10.163.136.0/23
CRE
DRM Ingest Server (Prod)
Proxy
TESTDMZ (VLAN 508) 10.163.135.0/24
CRE
DRM Ingest Server (Test)
DRM Ingest Server (Dev)
APP (VLAN 502) 10.163.194.0/23
MMS P/P
CAE
3PI
ER Core
DRM Cluster (Prod)
Access Control
LDAP Server ?
TESTAPP (VLAN 507) 10.163.134.0/24
INT 3&4
F/W
CAE
3PI
DRM Cluster (Test)
DRM Cluster (Dev)
DRM Oracle db Cluster
(Test & Dev)
Access Control
LDAP Server ?
DB (VLAN 501) 10.163.192.0/23
Oracle9i Oracle9i
RAC
RAC
Dual Oracle 9i RAC cluster
running on 2 domains on
Sun6800 serving multiple
application DB requirements
Oracle Test
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MP3 phones versus MP3 Players
Ubiquity versus Evolution
Towards Real ‘Jukebox’ Download Handsets
 There is a view that many current mobiles phone still have significant issues for use as
music players.
• Poor music quality
• Slow download speeds
• Limited storage capacity
• Poor battery life and power consumption
 iPod Versus Standard 3G phone - No Contest
SE Walkman
900i - 4GB
 iPod Versus ROKR – Not really
 iPod Versus Standard Nokia ‘Music’ or Walkman Phones’ - Hmm
 iPod Versus Top ‘Walkman’ or Nokia ‘Music’ Phones - Contest
Nokia 5300
Xpress Music
Store up to
1,500 tracks
Nokia N91
4 GB
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Summary – Digital Music & DRM Trends
Then
Now
 “Consumers
don't think of
themselves as wanting
"interoperability"; they want
an adapter for playing music
on their iPods through their
car stereos (Griffin, US
$35), a movie download that
they can watch throughout
their homes (Linksys, $300),
or music downloads that
they can play on both iPods
and their Windows Media
devices ($0.49 or more
each, RealNetworks)”.
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Summary – Digital Music & DRM Trends
 “DRM ecosystems are seen by many media and
technology companies as a way of ensuring we can
consume our digital content on all our gadgets
Then
Now
 Today, consumers want access to content and data on
their terms - anywhere, anytime, any device…and any
rights model
 Maturity of both the Mobile Music Business Models and
the DRM market to support protected content is still
some way off, but companies must continue to
experiment to test different value propositions
 The success of Apples ‘iTunes, the different reactions
to the recent cracking of Microsoft’s and Apple’s DRM
systems, and Microsoft’s recent announcements
regarding its Zune strategy shows the strengths and
weaknesses of differing business models
 Capgemini understand the Digital Music Market, and
where its going. We have:
• Detailed knowledge of technologies, vendors, businesses
and processes
• Access to best-of-breed packages
• Strong relationships with Key Vendors and Media
Companies
• A proven track record of implementations and Telecoms,
Media and Entertainment experience
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Thank you !
Devon C. Burke MSc
Principal Consultant, Telecom Media & Entertainment
E-mail: [email protected]
Phone: + 44 (0)870 238 8623
www.capgemini.com/industries/media