What are DRM and its Functional Architecture?

Windows Media DRM is a system for encrypting media files and then issuing licenses to allow viewers or listeners to see and hear the content.
Protect your media content and sell it in different ways - that's the opportunity that DRM can offer to content owners and entrepreneurs.
The encrypted media files can be distributed from streaming servers, from web servers, on CD, on DVD and via peer-to-peer networks. The files remain encrypted and can't be seen, until the viewer gets a license.
For example: To record a conference presentation, and then sell that presentation online. With Windows Media DRM, encrypt the presentation video file and then distribute the encrypted file from the website.
When a viewer watches the video file, the Windows Media Player identifies that the content is protected and takes the viewer to a unique page of information about the content. On the page is payment options e.g. pay by credit card or Pay Pal or even by an SMS message from your mobile phone. Once the payment has been made, the license is sent back to the Windows Media Player and the viewer can watch the content.
The Functional Architecture, which covers the high-level modules or components of the DRM system that together provide an end-to-end management of rights.
Functional Architecture
The overall DRM framework suited to building digital rights-enabled systems can be modeled in three areas:
• Intellectual Property (IP) Asset Creation and Capture: How to manage the creation of content so it can be easily traded. This includes asserting rights when content is first created (or reused and extended with appropriate rights to do so) by various content creators/providers.
• IP Asset Management: How to manage and enable the trade of content. This includes accepting content from creators into an asset management system. The trading systems need to manage the descriptive metadata and rights metadata (e.g., parties, usages, payments, etc.).

• IP Asset Usage: How to manage the usage of content once it has been traded. This includes supporting constraints over traded content in specific desktop systems/software.