Originally expected as long as a year ago, the technology--internally code-named Janus--has been seen as a potential way to let subscription music services such as Napster and RealNetworks' Rhapsody move to portable MP3 players. Those services, which allow subscribers to listen to unlimited amounts of music in return for a single monthly fee, are typically tied to PCs today.
But the new digital rights management tools also include features that would protect content that is streamed around a home network, or even block data pathways potentially deemed "unsafe," such as the traditional analog outputs on a high-definition TV set. That's a feature that has been sought by movie studios in advance of the move to digital television.
"This release of technology really enables all kinds of new scenarios that are emerging now," said Jason Reindorp, a group manager in Microsoft's Windows digital media unit. "We're taking quite a holistic view."
The software giant said that companies including AOL, Dell, Disney, Napster and Freescale, a subsidiary of Motorola, have agreed to adopt the new technology.
Microsoft is betting that the steady release of new content protection technology will help its audio and video formats become standard ways of distributing digital music and films, in turn, keeping people purchasing and using the Windows operating system and associated products.
The company has spent considerable time and money wooing record labels and movie studios over the past several years, hoping to see more content released online in its formats. To date, the majority of mainstream label- or Hollywood studio-authorized online services do use Microsoft's formats.
Nevertheless, Apple Computer's iTunes music store, which distributes music in its own rival proprietary copy-protected format, remains far more popular than any of the Microsoft-based services, controlling about 70 percent of paid music downloads.
Apple has wholly eschewed the monthly subscription model for its music store. But others services have looked to the predictable income as a better revenue source. They believe that ultimately consumers will prefer to fill their hard drives completely in return for a low monthly payment, instead of purchasing each song one by one.
Not yet in tune with consumers
However, even some of the most sympathetic subscription-model backers predict it will take a long time before consumers warm to subscriptions on their MP3 players.
"There's a lot of hype and talk about subscription downloads" for portables, said Sean Ryan, vice president of music services for RealNetworks, which operates the Rhapsody subscription service. "Our views on this are that it will be important in the long term, but it won't be in 2004."
RealNetworks uses Microsoft's audio format for the Rhapsody service, and so could theoretically take advantage of Janus. The company has not said it plans to license the technology, however.
The technology itself will likely take many more months to work through the often difficult process of being integrated into actual devices and chips. A long list of manufacturers, including Dell, Archos, Creative, Rio and iRiver have said they will support it.
But the services themselves may take just as long to emerge. The record industry is far from certain how to treat a service that allows consumers to fill up their 40-gigabyte MP3 players with music in one digital gulp. Labels worry that the model might simply siphon off the most active CD buyers.
"It would be very attractive if it expanded the market," one top record label executive said in a recent interview. "Anything that cannibalizes the market isn't as attractive. No one knows yet."
As a result, licensing negotiations are ongoing, executives said.
Along with chipmakers, device makers and music services, America Online and Disney both have indicated their support for the new digital rights management technology, further evidence that Microsoft's strategic alliances with both companies may be bearing fruit. Neither gave details on how they planned to use the new release, however.
