LONDON (Reuters) - Music giants Warner Music (NYSE:AOL) and Bertelsmann's (BERT.UL) BMG introduced on Monday a new anti-piracy technology enabling music fans to download songs onto a mobile phone and share the music with friends.
The new digital rights management (DRM) technology, called the OMA DRM server, was developed by Oslo-based Beep Science AS, the companies said in a statement. It is based on a standard developed by industry trade group the Open Mobile Alliance.
The new technology works on the concept of a restricted peer-to-peer network in which owners of mobile phones equipped with multimedia messaging, or MMS, can send and receive pictures and sound clips to and from other mobile phone users.
With OMA DRM, the music labels can collect revenues for each song downloaded off a central computer server and for those that are swapped between mobile phone users, said Jan Rune Hetle, chief executive of Beep Science.
The emergence of MMS phones enables media companies to sell a variety of short media clips from songs to condensed sports highlight reels.
Jupiter Research in London predicts European sale of ring tones and logos alone will jump ninefold by 2007 to 3.7 billion euros ($4.32 billion).
However, the money-making potential is fraught with uncertainty, and music executives are desperate to keep tight controls on the exchange of songs between mobile phones.
Unsanctioned peer-to-peer networks on the Internet, including Kazaa and Grokster, have created a booming black market for free music, which the industry blames for contributing to a three-year decline in recorded music sales.
Jupiter Research analyst Mark Mulligan expressed some skepticism the new technology would stamp out mobile piracy.
"DRM is a great idea if it meant users could only secure the music from secure sites. But you can still get around DRM by sourcing the music elsewhere," Mulligan said.
Rune Hetle said BMG and Warner Music are the first two major music labels to try the technology, which is being deployed in conjunction with mobile technology outfit Netsize Group. Netsize offers the technology to 50 mobile phone operators across Europe, including Vodafone (VOD.L) and Swisscom (SCMZn.VX).
The technology works with Nokia's (NOK1V.HE) 6220 handset.
"All the big handset makers are expected to follow suit, including Siemens and Samsung," said Rune Hetle.
OMA DRM was showcased for the first time on Monday at the ITU Telecom World 2003 trade fair in Geneva.