Secure Digital Music Initiative

Creating

a Digital Music

Marketplace

What SDMI is:• A multi-industry forum to develop a voluntary

open framework for playing, storing and distributing digital music to enable a new market to emerge.

• A forum for dialogue

Who has been involved?

• Broad multi-industry participation

• Over 120 companies and organizations - blue-chips, start-ups, record companies, Internet companies, software companies, consumer electronics companies …..

SDMI Participants

• 4C Entity

• Adaptec

• AEI Music/PlayMedia

• America Online

• Aris Technologies

• AT&T

• Audible, Inc.

• Audio Explosion

• Audio Matrix

• Audio Soft

• Audiohighway.com

• Aureal Semiconductor

SDMI Participants

• BMG Entertainment

• Bose

• Breaker Technology

• Canadian Audiotrack

• Casio

• CD World

• CDDB

• CDuctive.com

• Channelware

• Cinram International

• Compaq

• Comverse Info Systems

SDMI Participants

• Creative Technologies

• Dentsu

• Deutsche Telekom

• Diamond Multimedia

• Digimarc

• Digital On-Demand

• Digital River

• Digital Theater Systems

• DIVX

• Dolby Laboratories

• EMI Recorded Music

• Encoding.com

SDMI Participants

• Enso Audio Imaging

• Fraunhofer IIS

• General Instrument

• GoodNoise

• Hewlett Packard

• Hitachi

• HMV Group

• I2GO.COM

• IGUIDE

• Infineon

• InterTrust Technologies

• Intervu

SDMI Participants

• IOMEGA

• J. River

• J VWeb

• Kent Ridge Digital Labs

• Lexar Media

• LG Electronics

• Liquid Audio

• Lucent Technologies

• M. Ken

• Macro Vision

• MAGEX at NatWest

• Matsushita

SDMI Participants

• MCOS

• Memory

• Media Fair

• Mediamatics

• MCY Music World

• Micronas Semiconductors

• Microsoft

• Multimedia Archives & Retrieval Systems

• MusicMarc

• Nippon Telegraphic & Telephone

• Nokia UK

• NTT Mobile Communications Network

SDMI Participants

• Packard Bell NEC

• Philips

• Pioneer

• Plug ‘n Pay Technologies

• Portal Player

• Pricewaterhouse Coopers

• QDesign

• QPICT

• RealNetworks

• Rights Exchange

• RPK Security

• Saehan Information Systems

SDMI Participants

• Sanyo North America

• Seca on behalf of Canal Plus

• Sharp

• Softlock Services

• Solana Technology Development

• Sonic Solutions

• Samsung Electronics

• SanDisk Corporation

• Sonopress (BMG Storage Media)

• Sony

• Sony Music Entertainment

• SpectraNet Communications - ThrottleBox

SDMI Participants

• Sphere Multimedia Technologies

• ST&Hilo, a subsidiary of Telefonica

• STMicroelectronics

• Sun Microsystems

• Supertracks

• TDK Electronics

• Telian

• Texas Instruments

• The Mitsubishi

• The Music Connection

• Thomson Consumer Electronics

• Tokyo Electron Device

SDMI Participants

• Toshiba Corporation• Touch Tunes Digital Jukebox• Universal Music Group• Victor Co. of Japan• Warner Music Group• Wave Systems • Waveless Radio Consortium• WavePhore• Xerox• Yamaha

The Path to SDMI• 1970’s: Tape recorders

• 1980’s: DAT

• 1990’s:– CD-R; CD-RW– Recordable DVD– Storage capacity– Small, portable, removable hard drives– Flash memory devices– MP3 files

Confrontation to Collaboration

• Legal rights difficult to enforce

• Need for technological solution

• Need for collaboration to allow a legitimate market to emerge

Benefits of Collaboration

• New business models for music usage can develop

• New products and services can be created to support these new uses

• Consumers gain– easier access– to more music– in new, more enjoyable ways

Pirate markets benefit no one

• Piracy-based markets are short-term only; consumer frustration hurts everyone

• If content loses value, technology driver is lost

• Lost opportunity for e-commerce

Legitimate markets benefit everyone

• Easy access to music

• Easy to acquire

• Quality sound

• New ways to use music

• Interoperable devices

Legitimate markets benefit everyone

• Companies that make products

• Artists who make music

• Consumers who want both

Goals of SDMI

• To secure music in all forms, across all delivery channels

• Brand music with indelible markings, at the source

• Identifiers and usage rights data travel with music

• All devices read and act on data in predictable ways.

SDMI is commercially motivated

• Not intended to reinvent

• Intended to build on what has already been achieved and what is already available in the market

Short term need: Portable Devices

• Customer demand• Technology partners eager to join that market• Internet could otherwise turn into a permanent haven for pirated music• Therefore, portable device issue had to be addressed on a very fast track

SDMI on concurrent tracks

• Short term needs requiring prompt resolution: Portable devices on a fast track

• Long term objective: Meta-level architecture

SDMI’s Launch

• February 26, 1999• Executive Director - Leonardo Chiariglione

– Chair of MPEG

• Portable Device Working Group– Immediately tasked with focusing on Portable

Devices– Jack Lacy, Chair– Met June 30, 1998 deadline for initial Portable

Device Specification

Portable Device Specification Version 1.0

• Adopted June 28, 1999

• Released July 13, 1999, after technical review

• Publicly available, along with overview and FAQ, at www.sdmi.org

SDMI- Framework, Not Format

• No intent to select a compression technology (MP3, AAC, MSAudio, etc).

• No intent to select an encryption technology.

• Reasons:– Technology is

continually developing and will improve.

– Encourage innovation and competition.

– Allow maximum flexibility.

– Allow market to choose the best formats.

PD Specification Covers

• Application

– Program that manages import of content, music libraries, playback and rights management

• Portable Device (PD)

– Device that stores protected content and plays it back

• Portable Media (PM)

– Media that stores protected content

• Licensed Compliant Module (LCM)

– Interfaces and/or translates communications between LCMs and PDs/PMs

Core Principles• SDMI components must respect any “usage

rules” - which describe how the content can be used - that may come in the content in the future.– Any artist, band or record label that chooses to permit

unlimited copying will have that option.

– Any artist, band or record label that chooses to limit copying of an original will have that option.

– This is a general principle for future application (e.g. electronically distributed music), not current product.

Core Principles

• Any content to be used in an SDMI Portable Device must be protected at all times after it has been imported into the SDMI domain.

• Subsequent storage, use within, or transfer between SDMI components must be done in a manner that protects the content.

Core Principles

• Content must be bound to a Portable Device or Portable Media.– This ensures that a copy on a PD or PM will not

become the source for additional copies.

– This does not limit consumer usage because consumers can make copies for any device they choose - and as many devices as they need - and portable media can be transferred among compatible devices.

Core PrinciplesSDMI components will accept both protected and

unprotected music, e.g. MP3 files.– Unknown, unprotected music will be converted

into SDMI content and stored in protected form.

– Music from unknown sources (garage bands, church choirs) will not be excluded.

Core Principles

• Legacy content (music on existing CDs) will not be technologically protected.

• Reasons:- Effective protection is not possible.- Technological impediments would merely be minor speed bumps to copying.- Necessary in order to permit church choirs and garage bands to use SDMI.- Respects privacy rights.

Core Principles

• Future content (music on future CDs, DVD-A and EMD) must be protected against Internet piracy. – Mechanism for protection yet to be determined.

– One way this could be done is through a Dual Watermark System.

• Robust watermark - will not degrade when compressed.

• Fragile watermark - will disappear when compressed.• All music from unknown source passes through screen in

SDMI application. Screen only permits in content that either has both marks or no marks.

Core Principles

• Personal copying of CDs is permitted; Internet distribution without authorization is prevented.

• Where “usage rules” are not found, SDMI components will only make 4 copies from every rip from the original. This allows personal copying - as much as necessary - but impedes piracy.

Core Principles

• SDMI technology must be robust.– Security mechanisms must achieve certain

requirements.– Tamper resistance in both software and

hardware.

– Content must be protected whenever exposed.

Implementation

• Devices to develop in 2 phases.

• 1st Phase– Screen music for a signal - time to upgrade to

become a 2nd Generation device.

• 2nd Phase– Dual Watermark or other system– Only upgraded phase 2 devices will play future

releases.

Compliance with the Standard

• Compliance is a condition of obtaining a trademark license to use an SDMI mark.

• Compliance is a condition of obtaining a technology license for the Aris/4C watermark.

Marketing Efforts

• Logo and Tagline for SDMI Compliant products.

Expectations

• Some manufacturers have already announced plans for SDMI compliant products, and they should begin coming to market by January, 2000.

• Goal and expectation is that SDMI compliant products will overtake non-compliant products within a few years.

Announcements to Date

• Portable Devices– Diamond, Creative, Matsushita (Panasonic),

Toshiba, Mitsubishi, Lucent, Sanyo, Philips, Sony, Thomson (RCA), Audiovox

• Portable Media– Texas Instruments, QDesign, Iomega, SanDisk,

Matsushita, Toshiba

Announcements to Date

• Software– Microsoft, Intertrust, Reciprocal, WAVE,

MusicMarc, Liquid Audio, Fraunhaufer, NatWest

• Content– BMG, EMI, Sony, Universal, Warner,

Rock.com

Future of SDMI - What’s Next?

• Develop Functional Requirements

• Issue Call for Proposals for implementation technologies

• Develop specifications

SDMI has already achieved goals

• Need for secure distribution accepted

• Provided forum for dealmaking

• Proved technology and content companies can work together

• Launched legitimate market for digital music

Secure Digital Music Initiative