The issues in broad economic and legal terms couldn’t be clearer. In one corner, big business content owners: Warner, MGM, Columbia Pictures, 20th Century Fox Films, Sony BMG, Universal and EMI, in the other a sandstorm of counterfeiters, hackers, bootleggers, pirates, file-sharing internet companies, of which, Pirate Bay is just the most prominent and this case just one of several hundred in court. Big business is losing money in their markets, look at the balance sheets: “Sales of Music, Long in Decline, Plunge Sharply” (Wall Street Journal 21/3/7),” DVD-ISASTER SALES” (New York Post, 4/12/7), “CD, DVD fortunes held to ransom” (Smart Company 23/8/7).
But wait a minute, is it all the fault of piracy or is the traditional business model of selling physical artefacts measured in volume of units is simply buckling under consumer trends such as a preference for electronic versions? There is evidence that (1) the effects of piracy is overstated (MPAA 23/1/8), (2) downloads illegal or otherwise actually boost sales (BBC News 24/8/6) and (3) other factors such as DVD format wars, overall slowing economic growth, lack of sales-worthy titles, artists choosing alternative marketing models, are also having an impact.
Whatever the truth behind the figures, Digital Rights Management (DRM), the methods of controlling access to copyright material (see definitions), is seen by the big content owners as essential to protect their interests and increase declining profits. Andrea Appella, Vice President & Associate General Council at Times Warner Europe delivered a presentation about what DRM means to the business. Because of the lively debate that ensued about the rights and wrongs of content protection and restrictive practices he did not get to the end of his presentation however I’d like to reflect on 3 themes: licensing models in an online environment; is DRM futile?; DRM and digital convergence.
Licensing models for online delivery of entertainment
The large content owners were slow to engage with online markets but obviously it was not something they could afford to do for long given shifting cultural trends towards computer viewing. DRM offers business a variety of options to sell to consumers or price points. With respect to films and television you can buy a licence to watch once, have for a week, add to a library or load onto a portable player. Appella describes these models as innovative solutions to stimulate and grow a potentially lucrative market. To make this model work it would have to be accompanied by “education” campaign to make illegal downloading socially unacceptable.
“Effort should be put to raise public understanding that copying and sharing commercial movies, TV shows and music is the same as shoplifting”. Richard Griffiths, Director of Technology Strategy and Development, BT Vision
Griffiths goes on to describe DRM as ‘a speedbump to make it a decision to break the law’
The problem is that people think the internet is free and unwilling to pay for online content at any price. This view is supported by an Olswang consumer survey
“…the downside is that consumers appear unwilling to pay to receive content on their home PC, with 1 in 2 not prepared to pay anything extra for streamed/downloaded content and a further 40% not willing to pay more than £5 per month”, Olswang 2006
Appella affirms that currently online sales figures are statistically negligible compared to traditional sales. This contrasts with mobile phone services where people expect to pay for value added services.
The VoD story in France, “French broadcaster hails ‘Heroes’ VOD success in eroding piracy” demonstrate that there is a market for a system that is flexible, responsive and affords a level of user control and choice. Clearly consumers like a licensing model that foregrounds instant access rather than legal constraints. However, 50,000 legal downloads is small potatoes compared to the ‘estimated’ 1.5 million downloading Heroes every month illegally, though as I’ve said earlier, figures are not be trusted.
Is DRM Futile?
Illustrations: DefectiveByDesign poster, Wikipedia public domain first three ‘cracked’ from Richard Griffiths (op cit), Photoshop parody by huhbenchichang, Wired Magazine, Pirate Bay logo, Wikipedia public domain.
“A lot of people see us as copyright haters, but actually we don’t care about the copyright”
Peter Sunde, Pirate Bay .net magazine, January 2008, p34
For some hackers the appeal is the ‘cool technology’ and the technical challenge. But there is also a campaign for DRM-free content, which large companies such as EMI and Apple have endorsed. EMI Music has been selling DRM-free music since April 2007. But to answer the question “Is DRM futile?“. The answer is, probably, though as Appella says, that doesn’t mean you stop trying…
DRM and Digital Convergence
The reason why DRM may be futile is because the compulsion of technology is to outstrip itself. Before digital, cassette recorders came with a record option, standard DVD players became DVD-read write very quickly and multi-region. Possibly hardware vendors were reacting to consumer pressure but it is more likely that they were offering these enhancements for competitive advantage and because the technology cannot stop innovating. In an era where digital convergence (see definitions) is rapidly approaching, the current, restrictive DRM model looks out of date. This trend propelled by ever faster broadband and wireless technology suggests an urgent need to revisit the strategy and the copyright law or they will become meaningless.
Currently the UK is considering whether to tackle illegal downloading by making broadband providers, i.e. Internet Service Providers (ISPs) liable for the actions of their customers. This approach is also doomed according to internet law specialist Alex Brown, Simmons & Simmons, File Sharing Law ‘unworkable’ (The Guardian, 22/2/8). The sheer volume of internet traffic makes it logistically impossible to read the contents of files sent across their systems. The solution is technical but technology hasn’t found the answer yet.
DRM (Digital Rights Management): covers the description, identification, trading, protection, monitoring and tracking of all forms of rights usages over both tangible and intangible assets including management of rights holders. Planet e-book
DRM (Digital Rights Management): a generic term referring to embedded, electronic restriction over the use of electronic content. Usually applied to copyrighted material. Apple Developer Connection glossary
Tags: Digital Rights Management, DRM, IPR
