Advanced Television

Global DRM market to reach $2.5bn by 2017

November 21, 2011

Rapid proliferation of the Internet made it all the more easier for unauthorised people to gain access to digital information and illegally circulate the same. This situation calls for immediate attention as piracy and data losses not only cause huge revenue losses for the company but also tarnish the image of the company for ever. Against this backdrop, the importance of Digital Rights Management (DRM) software has been brought to the fore, given its role in ensuring protection of data against piracy, within and beyond their corporate networks.

Not only software and corporate information, media and entertainment industry too require efficient DRM solutions to protect their media and movie files against illegal distribution and sharing over the Internet and other illegal supply channels. Given the increasing levels of caution among content developers over safety of their high value content, the future definitely holds good for DRM applications, says Global Industry Analysts.

Despite the popular perception that the dynamic environment of risk that companies and media houses operate in, and the ever-present data security threats, which interestingly tend to escalate during periods of economic downturn, make data security technologies recession proof, the global Digital Rights Management (DRM) market ironically in the year 2009 depicted a marked weakening in the midst of a steady deterioration in business climate. The length, breath and duration of the economic slowdown has been unprecedented and the contraction in business activity widespread across diverse industries. The economic storm, in other words, wiped out numerous companies in software and enterprise segment and even pushed many large media houses on the verge of bankruptcy during the period. With enterprise focus shifting towards survival, demand for content protection solutions, during this period, stood significantly weakened. Numerous corporate failures in emerging application markets such as banking and financial services, BPOs, and TV Home Entertainment, therefore squeezed opportunities in the DRM market.

Despite the 15.9 per cent erosion in growth witnessed during the period 2007-2009, the DRM market made a smart recovery in the year 2010. This is largely because the underlying economics of content protection goes beyond the temporary weakness in the market’s climate. Companies, especially software firms and large media houses, cannot afford to cut corners on DRM for long, given the disproportionately higher costs associated with data losses, piracy and unauthorised circulation of original content. These costs tend to far outweigh any gains stemming from cutting DRM expenditures as a measure to save money. Additionally, a large percentage of the DRM market is built upon legally binding requirements. Observing the rules and regulations of Health Insurance Portability and Accountability Act (HIPAA), vertical sections of business like manufacturing, financial services, energy and health care are paying more attention to updating DRM technology. Future growth in the market will be primarily driven by emerging opportunities from niche segments such as educational services, healthcare, e-Books and financial sector will also drive future gains in the market over the next few years. Application of DRM for Electronic Medical Records, in particular will generate tremendous prospects for the market in healthcare market.

The US continues to remain the largest regional market for DRM. Asia-Pacific represents the fastest growing regional market for DRM waxing at a CAGR of about 19 per cent over the analysis period. Growth in the Asia-Pacific DRM market will be especially driven by continued demand for payTV services, which continues to boost demand for conditional access and pay-TV DRM in the region, particularly in emerging markets of China and India. Media & Entertainment DRM is the fastest growing market segment by end-use type, with revenue from the segment growing at a CAGR of about 15.3 per cent over the analysis period.

Major players in the marketplace include Adobe Systems, Apple, Rovi Microsoft, Oracle and RealNetworks among others.

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