Microsoft and Content Protection: Where's the Love?

Stephen Wildstrom

University of Auckland (New Zealand) security researcher Peter Guttman created a bit of a stir over an otherwise quiet holiday week with his thoughtful and detailed analysis of the cost of the content protection technology that Microsoft is ladling into Windows Vista.

I'm not sure I agree with Guttman's contention that the technology, which is designed to prevent high-definition video content from being output through connections that lack strict piracy-prevention measures, will significantly raise costs to all PC users, even those who don;t run Vista. After all, it's just silicon and license fees, and both tend to decline dramatically when markets achieve the sort of size that Vista will generate.

But I do find his larger point, that this is not only bad for users but suicidal for Microsoft, compelling. In fact, it may be worse for Microsoft than he thinks.

The only reason I can figure that Microsoft is installing content protections beyond what is required by law is that it is part of the company's relentless effort to impress Hollywood with its enthusiasm for antipiracy measures. The trouble is that this attempt to make nice seems so far to have availed Microsoft nothing. Just to get NBC Universal to make its music library available on the Zune player, Microsoft had to set a dangerous precedent of offering a royalty based on devices sales in addition to music downloads. It still hasn't won an agreements to provide video downloads for the Zune, depriving the player of one of its few advantages over the current generation of iPods. So far, Apple's more confrontational approach has won more success than Microsoft's stroking.

The long-term cost of Microsoft's content-protection binge is that to the extent it makes life more difficult for consumers, it will make the Media Center PC less viable as the center of home entertainment.It's going to be very interesting to see how Apple approaches the same issues with its iTV entertainment device. We should have a much better idea next week.

Before it's here, it's on the Bloomberg Terminal.