Chosen few to rake it in thanks to SDMI support
Aris watermarking technology costs up to $50,000 per year plus 25 per cent of gross revenues
Everyone knows the digital music market is a licence to print money -- and none more so than the technology companies at the heart of the Secure Digital Music Initiative (SDMI). Take Aris, developer of the watermarking system to be incorporated into Phase One of the SDMI's specification for protecting music held on portable playback devices. According to the Aris licensing agreement obtained by online music retailer MP3.com, hardware manufacturers who wish to use the company's watermark decoding software will have to cough up $10,000 per year to do so. If the vendors also want access to Aris' source code, the licensing fee shoots up to $25,000. What's more, if they want encoding software, that's another $10,000 per year, rising to $25,000 for the encoder source code, and -- get this -- licensees have to hand over to Aris 25 per cent of gross revenues made through the sale of development tools. Anyone concerned they might need technical help with Aris' software will be pleased to know that it's included in the fee -- well, four hours' worth is, at any rate. And that's only for the first year -- after that, Aris will bill you at a rate of $100 per hour phone help or $1000 per day on-site support. Of course, to us mortals, all that sounds horrendous, but to the companies planning to flog solid-state Walkmans to a new generation of music buyers and/or music encoding software to the music industry, such monumental fees are just a small fraction of their total income. That said, vendors have rebelled against excessive technology licensing fees before -- witness the trouble Apple got itself into over its $1-per-port FireWire IP licence -- so Aris could be forced to rethink its pricing plan, not least because the watermarking technology won't be a pre-requisite for SDMI support until Phase Two comes in. ®
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