SafeNet Exits Consumer DRM Business

SafeNet last month sold its consumer media DRM product lines to Authentec, a maker of fingerprint sensors based in Melbourne, FL, in a cash and stock transaction valued at US $11.3 Million plus a potential $2.5 Million earnout.  The DRM assets included in the sale were the company’s DRM Fusion products, which comprise server DRM packaging and license management and DRM client software.

The DRM assets came from DMDSecure, the Dutch company that SafeNet acquired in 2005, and Beep Science, a Norwegian company that it acquired in 2008.

The deal primarily involves SafeNet’s Embedded Security division, which includes hardware and patents as well as software and expertise; the DRM assets are barely mentioned in Authentec’s press release.  It is clear that Authentec wants to expand its product line from fingerprint readers to the security solutions for which they serve as authentication input.

DRM could possibly become part of such solutions, but the history of using biometrics in DRM is not particularly encouraging.  The only applications of biometrics-based DRM that have existed in the market are schemes such as Musicrypt’s DMDS and Thomson’s NexGuard, which are used for “B-to-B” applications such as sending video to post-production houses or sending music to radio station chains.  Such applications are valuable and fairly widely used, but their scale is nowhere near that of OMA DRM (especially OMA DRM v.1).

The SafeNet management team responsible for DRM Fusion and the OMA DRM software has gone over to Authentec and will continue to sell and support the products.  Perhaps they will find synergies between the DRM technology and Authentec’s biometric products in consumer applications after all.  But otherwise it’s difficult to read anything into this other than a consolidation of the OMA DRM market — a potential loss of one of the technology’s primary independent suppliers.  CoreMedia of Germany and MarkAny of South Korea are virtually the only ones left.

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