Time Warner is making a multimillion-dollar investment in digital rights management technology company ContentGuard in a bid to help set copy protection standards for Hollywood and spur its own digital entertainment initiatives.
Investment is part of the conglom’s partnership with Microsoft, which signed a deal to work with TW on digital content last year.
Microsoft already has a minority stake in ContentGuard and is increasing its investment along with Time Warner. Together, the two companies now share majority control in ContentGuard, taking over from former stakeholder Xerox, which helped develop most of the company’s intellectual property.
ContentGuard licenses a number of key patents to big players in the DRM arena, including Microsoft. Along with its equity stake, TW gains direct access to those patents, which it plans to use throughout the company.
“All our divisions are behind this because they all have specific parts of their business plan related to the safe distribution of digital content,” said Time Warner senior VP Ron Grant.
The conflict between different DRM standards that don’t interoperate has been a major stumbling block in the evolution of a market for digital content. All three companies involved in the deal are hoping their combined presence will help to establish DRM based on ContentGuard IP as a standard for the industry.
“There are a number of obstacles to a free-flowing digital marketplace, and this addresses several of them,” said ContentGuard CEO Michael Miron. “Together we’re aiming to solve the lack of standards and the need for broad access in the entertainment industry to this sort of IP.”
Microsoft’s increased stake in ContentGuard should also bring the DRM company closer to Disney, with which the software giant recently signed a partnership similar to its one with Time Warner.
Along with its investment, Time Warner gains two seats on the ContentGuard board of directors; Microsoft already has two.