DECE & KeyChest. A comparison

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1 & KeyChest A comparison

2 Introduction At the sound-bite level, & KeyChest/SingleFile goals appear very similar and that KeyChest/SingleFile is ready When you drill down, there are key differences in the two approaches and we believe KeyChest/SingleFile is far from ready Taking everything into consideration, is much further along than KeyChest/SingleFile and solves key studio issues that KeyChest/SingleFile does not address 2

3 Approach Designed to support existing, proprietary silos (e.g. Apple itunes) that benefit device platforms Designed to to be open (e.g. DVD) Designed for Content independent of device platforms KeyChest perpetuates the existing fragmented marketplace with single vendor domination Content can only flow from 1 silo into other authorized silos Devices that are not part of a silo cannot play KeyChest content and limits the addressable market Does not change market dynamics that favor Apple levels the playing field and opens the market by creating a single, branded digital media product was designed independent of existing silos Like DVD, all devices can play content purchased from any retailer 3

4 Industry Support Disney developed alone Apple participation unknown Developed with cross-industry support with 50+ companies No existing open standard or format (e.g. DVD) has been adopted without broad cross-industry participation It is unlikely that any company would simply adopt the Disney specifications without change Microsoft said they would not adopt Disney will need to go through a similar process that has already gone through to gain support (currently signing NDAs) As 3 rd parties review the specs, modifications will need to be made The Disney specification just a starting point This will take time has already gained broad industry support 4

5 Control & Governance Disney sole control LLC with Mgmt Committee Voting rules & IPR policy Given that changes will need to be made, how will these changes be managed? It is unlikely that any adopter would seed all control of specifications to a single company Disney will need to establish some governance body like Disney acknowledged this at the DEG meeting Intellectual Property Rights (IPR) policy will need to be established This will take time has already established this 5

6 Consumer Experience Inconsistent user experience A collection of proprietary silos Multiple, decentralized device registration processes Uniform user experience A single, branded digital product A single, centralized device registration In KeyChest, since playability across silos is determined by each studio, content will not always play consistently across a consumer s participating devices not all content behaves the same way In, content from any retailer will always play on all devices all content behaves the same way 6

7 Copy Control KeyChest provides no control mechanism to control copying across silos Each silo has its own usage model The more silos, the more copies provides centralized coordination to control copying across retailers (including fraud detection) established a unified usage model across all retailers More retailers do not result in more copies Interoperability should not result in the loss of studio control over the total number of copies resulting from a single purchase Adding centralized controls to the KeyChest system would require additional development and technical specifications This takes time has already done this 7

8 Content Protection KeyChest does not enhance security KeyChest defers all compliance and robustness rules to silos provides enhanced security approves DRMs and specifies compliance and robustness rules Because KeyChest leverages existing silos, studios cannot negotiate for higher content protection standards (anti-trust). As such, KeyChest cannot address content protection issues Because is developing a new standard product (no anti-trust issues), studios can negotiate for enhanced compliance & robustness rules across all devices and services including: Output controls Analog sunset Verance WM Hardware root of trust 8

9 Consumer Protection KeyChest provides central repository for content rights purchased from any silo However, if a silo fails, all of its associated devices can no longer receive & play new content provides central repository for content rights purchased from any retailer Consumer s devices are not impacted by retailer failure Service failure should not result in loss of device functionality This is a fundamental limitation in KeyChest 9

10 Device Scalability Devices must be part of a silo to participate there is no such thing as a stand-alone KeyChest device Any device manufacturer can make a compliant device by following the specs (Like DVD players) not required to be part of an existing silo opens the market creating a network-effect as more retailers and devices adopt. This increases the overall addressable market 10

11 Brand Promise Because there is no predictable, uniform experience, KeyChest cannot easily communicate a brand promise All content will carry a brand and a logo (like DVD) The brand simply conveys a predictable, uniform experience the brand promise Since studios determine which silos that content is available in, each title can carry a different user experience causing consumer confusion A KeyChest brand would not be meaningful to consumers without further policy development Disney acknowledged the need for this in the future This takes time has already defined a usage model and developed a brand 11

12 Summary Launch Criteria KeyChest & SingleFile Industry Support Unknown 50+ members Governance None Complete IPR Policy None Complete Usage Model None Complete Common File Format No industry support Near Completion with industry support Brand None Complete Copy Control Mechanism None Central Coordinator RFP in process DRM Compatibility Unknown 5 DRM submitted for approval 12

13 Disney Fallacies Disney Claims Open like DVD The Reality Not a standard digital media product Content is still tightly coupled with silos Each silo sells a different set of rights Not all devices can play content sold by all silos SingleFile requires no DRM changes SingleFIle spec is complete Disney KeyChest Server is production-ready Not true DRM licensing mechanisms are unchanged, but all DRM clients will need to be modified to work with SingleFile. Disney demo did not work with any existing DRMs Not in reality In order to develop such a standard, crossindustry support is required. The Disney spec is more like a first draft which will no doubt require revisions to gain cross-industry acceptance. Disney doesn t know that has also specified a common file format, but with broad industry support Disney has no experience in managing high-volume transactions or providing a high-level of reliability 13