A Microsoft spokesman has described their DRM licensing scheme as a system for reducing the number of device vendors to a manageable number, so that the company doesn't have to oversee too many developers.
Yesterday, I spoke at a DRM conference in London. Just before me was the opening keynote, from Microsoft's Amir Majidimehr, Corporate VP of the Windows Digital Media Division, which oversees licensing and deployment of Microsoft's DRM.
Amir's presentation kept referring to Microsoft DRM as "open," which was curious, because it's actually the opposite of open. An open platform is something like an electrical outlet: if you want to design something to plug into an electrical outlet, you can — you might have to satisfy a regulator that it won't burst into flames, but you certainly don't need to talk to General Electric or any other potential competitor.
Microsoft's DRM requires that device makers pay Microsoft a license fee for each device that plays back video encoded with its system. it also requires every such vendor to submit to a standardized, non-negotiable license agreement that spells out how the player must be implemented. This contract contains numerous items that limit the sort of business you're allowed to pursue, notably that you may not implement a Microsoft player in open source software.
The bombshell was Amir's explanation of the reason that his employer charges fees to license its DRM. According to Amir, the fee is not intended to recoup the expenses Microsoft incurred in developing their DRM, or to turn a profit. The intention is to reduce the number of licensors to a manageable level, to lock out "hobbyists" and other entities that Microsoft doesn't want to have to trouble itself with.
I was pretty surprised to hear an executive from Microsoft describe his company's strategy as intentionally anti-competitive and intended solely to freeze out certain classes of operators rather than maximizing its profits through producing a better product and charging a fair price for it.
Isn't that why the Justice Department and the EU went after Redmond in the first place?
