French DRM ruling will spark protracted legal battles

Gartner is predicting widespread disruption in the digital content market

The recent decision by the French government to seek legislation forcing Apple to open iTunes to users of media players other than the firm's iPods will have a far-reaching impact on the owners of digital content, Gartner predicted today.

France is currently voting on a bill to let consumers circumvent digital rights management (DRM) schemes from firms including Apple and Microsoft to ensure 'service-content-device' interoperability.

New compensation models may evolve as a result, according to Gartner, but only after a "protracted legal fight".

The warning comes after the French parliament's recent vote to make changes in French copyright laws that would force Apple and Microsoft to open up their DRM systems to allow interoperability among various hardware devices purchased by French citizens.

The legislation now heads to the French Senate for a final review scheduled to start in May.

"To call this legislation disruptive would be an understatement," said Gartner research director Mike McGuire.

"Forcing companies such as Apple and Microsoft to provide information about their DRM technologies so that protected content can be played on any device has the potential for confusing a marketplace that is just starting to evolve.

"French politicians have told the press that the bill is designed to protect customers by forcing interoperability."

McGuire added that there is also an undercurrent of concern regarding two US-based companies (Apple and Microsoft) dominating the distribution of music and video content online.

"Taking steps to avoid the establishment of monopolies might be laudable, but there is no evidence in this case to suggest that Apple has achieved monopoly status in terms of music services," he said.

"Other devices and services exist for consumers to use, including services distributing files in Microsoft's WMA format protected with its own DRM."

Gartner predicts that a number of disruptive developments are possible if the French legislation withstands the "inevitable" legal and legislative challenges.

It is likely that the legislation would prompt online providers such as Apple, Napster and others to demand "drastic changes" in the consumer usage rules enforced by DRM technologies.

Additionally, Apple and the music labels could simply shut down the iTunes France store. Such a move would inevitably lead some consumers to go to illegal peer-to-peer (P2P) networks to find music and video, Gartner believes.

The analyst firm further speculates that voluntary or compulsory licensing models could emerge.

"If media companies detect no appreciable increase in leakage of copyrighted content onto P2P networks, or loss of legitimate sales through online stores, they may begin to treat DRM more as a tracking and accounting tool than a locking mechanism," said McGuire.

"If rights holders ever doubted the need for rapidly redirecting their resources towards developing new business models and new partnerships, this should serve as a wake-up call."

Gartner advises copyright holders to shift their energies from trying to shut off perceived losses caused by P2P traffic towards enabling more and better ways for consumers to legally share content.

"You need only look at various social networking sites to see how consumer-to-consumer 'taste sharing' tools are the keys to the future, not a scourge," said McGuire.