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A group of leading technology firms has decided to cut proposed royalties on essential anti-piracy systems rather than face a potential feud with mobile phone companies.
MPEG LA, which includes ContentGuard, Philips Electronics and Sony, announced this week it will revise the terms of a joint patent portfolio license it will offer for use of the Open Mobile Alliance (OMA) Digital Rights Media (DRM) 1.0 specification. The companies own all the essential patents on DRM-enabled mobile services.
The group now plans to scale back royalty tariffs on the anti-piracy technology approximately 30 percent. The new proposal would mean a charge of 65 cents per mobile phone.
MPEG LA also proposes to charge 25 cents per mobile phone subscriber per year. The number of songs or digital content a subscriber purchases during that period will not affect the fee.
The initial calls for tariff reductions suggest phone operators feared that high royalties might slow the desire for digital music and video.
The GSM Association of mobile operators had also reportedly complained about the initial suggested price of $1 per device, as well as 1 cent per transaction fee on each online purchase.
"Their input has enabled us to appreciate relevant market conditions and adjust the license to meet them," Baryn S. Futa, MPEG LA CEO, said in a statement. "The terms announced today strike a balance between users' interest in reasonable access to this opportunity-enabling technology and patent holders' interest in a reasonable return on their research and development investments.
"This achievement is made possible with the wireless industry's cooperation and strong show of interest in OMA DRM technology," Futa said.