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Why DRM Will Have a Negative Affect in the Long-Run

By Alexander Grundner | August 28th, 2005 Interest Level: SMOKING HOT


cd drm crackdown graphicUpdated: [Opinion Piece] I was just bouncing around some ideas about DRM (Digital Rights management) and its impact on consumers. I’ve read various reports on the topic (most long-winded and vague), but I was never satisfied with their findings. So here’s how I see it…

Points/Categories:
Category 1: Average consumers buy what’s made available to them and they don’t pirate music and videos (this represents the majority of the population).
Category 2: Above average consumers, with knowledge of how various peer-to-peer (P2P) technologies and DRM stripping techniques work, will find ways to circumvent DRM on media they own or will download illegal copies of the same works and others of interest (this is a small portion of the population).
Category 3: Blatant pirates, people who make it their life’s work to crack DRM and distribute pristine illegal copies of media through various online channels, are virtually impossible to stop (these are the one percent-ers).

Conclusion:
No matter how many barriers media companies place on protecting their media from duplication or piracy, an unlocked version will always be available to those who seek it. (FYI, although it’s available, it doesn’t mean it’s practical to get – i.e. multi-gig High-Definition video). Moreover, if media companies restrict duplication and interoperability to the point where fair-use is not an option, you’ll see more consumers jumping into Category 2. So, in reality, media companies are pushing consumers to engage in “illegal activities” by offering an inferior product (be it physical or software based) instead of courting them with a new, and even more empowering feature-set.

Aside:
In order to understand what consumers want, you have to look at what they currently have – in particular CDs and DVDs.

  • CD/DVD: extremely high-quality digital media that you physically own
  • CD: ability to transcode the audio into different codecs and bitrates
  • CD: unlimited duplication capabilities
  • CD/DVD: playable on any CD/DVD drive (interoperability factor)
  • CD/DVD: share media with friends and family by either burning a copy or letting someone borrow a CD or DVD

* The truth is once you strip DeCSS encryption from a DVD, you have the exact same features a CD allows you to have.

* Further thoughts — re-published from forum comments

The sad part to all of this IMHO: I think we’re seeing a major shift on how media companies want consumers to obtain and view media. It’s not just DVDs being released on the same day as feature films (BTW, movie studios make more in DVD sales than they do with theater proceeds), but a bigger shift is happening. I strongly believe media companies want to lock-down their content so they can squeeze the most profit from their investments (no matter if it hurts their long-time business partners – ie. record stores, movie theaters, etc. – now even Steve Jobs is feeling it with the iTunes track pricing). For example, I think they look at CDs and DVDs as a vehicle that was innovative for its time, but now as a technology that threatens their profit margins by its openness. Moreover, if HD video wasn’t so hard to transfer digitally over broadband, I think they would prefer to get rid of physical discs altogether (I’m talking within the next 10 years or so).

Another big loser in all this is our schools and libraries – no sharing of e-Books, digital music or video because it’s not accommodated under current DRM schemes.

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____________
Alexander Grundner is the Editor & Publisher of eHomeUpgrade. He has been following "Digital Home" developments since 2003. He's also a fan of cross-platform, open development software and industry standards related to media, networking, and the web. You can catch his daily tech musings on Twitter: @agrundner.
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  • Gadget Fetish: According to the Washington Post, the studios may shorten or completely remove the delay between theatrical and DVD releases! While this does not signal the end of the MPAA's war on P2P technology, it's one of the first signs that I've observed that they need to pay attention to the desires of their customers. After all, a growing number of consumers would prefer to watch a movie at home than in the theatre. For that matter, as the Post cites, the studios make more profit from DVD sales than theatrical releases! The only potential loser here is the already waning theatre industry.


    Yeah, I read that story in my local paper... I have mixed feelings on it. Personally, I think that the movies studios, by going this route, are putting a death nail in the coffin of movie theaters. As you've probably already read, they are struggling big time to bring in viewers. Sure, the complaints about high ticket prices, too many commercials, and annoying people have something to do with it (remember, theater owners make the majority of their money selling Popcorn, Soda, etc), but I strongly believe theater owners are right when they say Hollywood is at fault for their lack of business because they continue to release such CRAP movies.





    I know I only go to the theater when a high-rated movie is playing, and I know l will enjoy seeing it most on a big-screen -- else I'll wait for the B and C rated movies to come out on DVD. Nonetheless, if the movie and DVD were to start being released on the same day, I would prefer going to the movie theater to watch an A rated movie than seeing it at home on my 32-inch TV.





    The sad part to all of this IMHO: I think we're seeing a major shift on how media companies want consumers to obtain and view media. It's not just DVDs being released on the same day as feature films (BTW, movie studios make more in DVD sales than they do with theater proceeds), but a bigger shift is happening. I strongly believe media companies want to lock-down their content so they can squeeze the most profit from their investments (no matter if it hurts their long-time business partners – ie. record stores, movie theaters, etc. – now even Steve Jobs is feeling it with the iTunes track pricing). For example, I think they look at CDs and DVDs as a vehicle that was innovative for its time, but now as a technology that threatens their profit margins by its openness. Moreover, if HD video wasn't so hard to transfer digitally over broadband, I think they would prefer to get rid of physical discs altogether (I'm talking within the next 10 years or so).





    Another big loser in all this is our schools and libraries as Cory points out -- no sharing of e-Books, digital music or video because it's not accommodated under current DRM schemes.
  • The problem is the US Congress. They're largely owned by corporate interests via the lobbies. The DMCA simply could not have passed with so many concessions without leashed congressmen and the worst offender: a public largely ignorant of technology.




    By way of example, I still well recall a dinner conversation that I had with a friend of mine whose a casual technology consumer. When I first asked him if he'd heard of the Broadcast Flag, he hadn't a clue. Seeing as how the DMCA and WIPO preceded the Broadcast Flag, imagine how little the general public knew (and possibly still knows) about the DMCA!





    I well recall the EFF fighting against the DMCA but I never heard much chatter about it anywhere outside of Slashdot! The media industry effectively did an end run on the general public. They saw what was coming and instead of fighting with innovation (excuse the shameless self-promotion but check this out) they fought with legislation.
  • Cory Doctorow of the EFF recently made this public statement that seems fitting:

    Any software system, open or not, that blocks users from making legal use of digital content is not consumer friendly. And DRM systems are notorious for blocking people from making fair uses of content by preventing the duplication of all works, even if those works are in the public domain, are being copied for educational purposes, or are publicly owned materials such as government-gathered facts. Because the Digital Millennium Copyright Act (DMCA) makes it illegal to circumvent DRM, there is no lawful way for people to override DRM systems -- even if they are doing it to make legal copies.

  • Mayhem9
    Nice Summary.




    A nice example is minidisks (MD players). It has always been great technology-- recording is near DAT grade at very low prices; however, you must first convert the recording back to analog and then re-digitize before buring a CD. I can only assume this restriction was to protect music producers who imagined to sell MDs. In reality, it killed the market.





    I started to use P2P and DiVX because I wanted particular subtitle files to movies. Again, the DVD publishers decided to produce DVDs with different regions so they could charge more. In addition, even the expensive Region2 DVDs come in different versions with different groupings of subtitles-- always a suprise. P2P DivX is just easier. I always get what I want.
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