Silverlight Is Beating Flash When It Comes to DRM Protection

In an interview this week in the Wall Street Journal, Adobe's (ADBE) CEO said that with the recent round of layoffs, Adobe would be better focused to grow its online video business. That's good news to hear from Adobe because being at the top requires a lot of work to stay there, especially when the competition is heating up. If there is one thing Adobe needs to really work on, it's the company's strategy for getting content owners to use Flash for video that needs digital rights management [DRM].

To date, Microsoft (MSFT) is still winning the business that requires DRM. Microsoft's free PlayReady solution supports connected playback with streaming or progressive-downloaded content and on Thursday it announced another customer, BSkyB, that is using Silverlight powered by PlayReady. Other recent wins by Microsoft also include Netflix (NFLX) which is using Silverlight for its Watch Now service for Mac users.

Adobe, on the other hand, is selling a server for DRM called the Adobe Flash Media Rights Management Server with a list price at $40,000 per CPU. If that price has come down, I hope someone will let me know, but from what I can tell, it is still that expensive. Right now, content owners need more tools and support to help protect their content and try to make a business model out of online video. It would make more sense for Adobe to give away the DRM functionality to act as an enabler for content owners to use the other pieces of their Flash video platform.

I'm sure Adobe is just trying to be compensated for the work it has done to create the DRM server, but with so few content owners willing to pay the price, Adobe could make more money in the long run by bundling the DRM functionality into one of the other Flash Media servers.

Disclosure: None