Guest Post: The Rise and Fall of DRM?

We bring you a guest post by Swaraj Barooah, an enterprising law student in his final year at NALSAR, Hyderabad (readers may recollect Aysha’s earlier post highlighting that NALSAR is now the number one law school in India).

The Rise and Fall of DRM?

The better part of the last decade saw the recording industry using Digital Rights Management (DRMs) as a form of copy-protection locking up digital media bought by customers for the prevention of illegal usage. The internet was facilitating piracy in increasingly growing numbers. It was a different matter (for the entertainment companies atleast) that along with the prevention of illegal activities, a good number of perfectly legit activities were being blocked as well. Examples of this are the restriction of number of back-up copies that can be made, restrictions on format conversions, restrictions on which players can play the media in question and my personal favourite: restrictions on what is known as, and is explicitly protected under copyright law – ‘first sale’ – the right to give away or sell your property. And you thought you owned what you bought? Certain subscription services even require a monthly payment to be made for a subscriber to listen to music that he has already bought!

And as a more blatant example of what can be done with these rights that vest in the hands of the suppliers, last month, MSN Entertainment suddenly announced that come August 31st, customers would not be able to play music ‘bought’ from MSN on any new computers or any new operating systems. Among the other senseless difficulties that consumers have had to face, ‘region codes’ have introduced a concept of being able to enjoy your newly acquired media only in certain places of the world.

So if DRM is so bad, why have it in the first place? Besides the supposed defense of protecting the rights of artists and such, a peek into history shows that incumbents in the entertainment industry have almost always viewed innovative practices as disruptive to their business out of the fear of being out-competed by new market entrants. This can be seen right from the piano roll (which ended up into the phonogram on which the entire recording industry was built), the radio, cable television, the VCR and the DAT recorder to name a few.

Major services often mislead their customers with their marketing schemes. Apples iTunes Music Store says ‘Own it Forever and a Day’ and ‘Just 99c a song, Plus Generous Personal Use Rights’. What they don’t mention is that they reserve the right to change what you can and cannot do with your music at any time they wish. For example, they started off with a policy of allowing the same playlist to be burnt a max of 10 times. Then suddenly via an ‘update’ in April 2004, this was reduced to a max of 7 times.

It also doesn’t allow the media to be played on any player other than an iPod and other Apple devices only. Several of the common restrictions mentioned earlier in this post are also present here. Similarly, Microsoft put out a ‘Plays for Sure’ label for media in Microsoft Windows DRM format which could be used to match compatible products. However, they fail to mention that if you wish to play your media on an incompatible player, you’ll have to re-buy all your media. Ironically, Microsoft’s own Zune player is incompatible with their ‘Plays for Sure’ content.

DRM in the developing world

Most security systems today, including those used by US military, rely upon peer review to ensure that it is up to date and secure. Unlike these other security systems, DRM relies on secrecy and non-disclosure for its system to work. What this translates to is that DRM by itself is useless; it requires legal backing to prevent the sale, manufacture and dissemination of equipment which can be used to crack it. These anti-circumvention laws have infamously led to academicians being prosecuted for criticizing the working of DRM in academic conferences.

Although currently anti-circumvention laws are more popular in developed countries, there is no doubt that developing countries will be pressurized to introduce such a system into their own legal structure through international agreements. There is also the danger of foreign players bypassing local laws altogether as new relationships with customers in developing countries will depend not on local law, but on the EULA by which customers will be bound thus putting it under the scope of contract law and not copyright law this leading to the imposition of rich-country values on poor nations.

Re-sale and usage of second hand goods which is very common in developing countries would be severely curtailed as DRM often prohibit sale, lending out or even donation thus presenting a specific danger to developing countries where such kinds of activities have widely relied upon. DRM are also based upon infrastructure which is assumed in developed countries but these assumptions are not necessarily applicable in developing nations. For example, many DRM vendors rely upon an internet connection that the DRM restricted media uses to verify whether that media can be used in a particular way. Herein lies the assumption of reliable telecom and electricity infrastructure. Furthermore, developing countries rely heavily on innovation and as such require a conducive legal environment.

A more indirect effect that DRM would have is on the artists themselves. If such DRM laden systems push their way into mainstream, with the DRM vendors holding the keys to the system, local artists would have to pay a duty to the foreign vendors in order to get their material locked in the system which makes it available to the public. In effect, local artists would be sending money out of the country so that their countrymen can access their work.

Beginning of the End?

Take a look at some of these statements:

“In the beginning of this year, Sony BMG, well known for its rootkit fiasco, became the latest of the big four record companies (the other three being Warner Music Group, EMI and Vivendi) to offer music free of DRM.”

“7digital, a leading digital media delivery corporation announced a year on year sales growth of 188% at the end of 2007 coinciding with the removal of DRMs from their service that year.”

“We believe consumers will pay more, or purchase more music, without DRM,” says Dave Goldberg, general manager of Yahoo! Music. “Given the choice, consumers will always choose music without DRM.”

“On the same day when Universal Music decided to experiment with DRM-free MP3 downloads, Google announces the closing of its video store. (DRM section)”

Internet giants have finally realized that DRMs tend to punish the innocent legit consumers more than those pirating the media and it doesn’t make commercial sense to push away your consumers by such treatment. It certainly appears that the predictions made by Michael Arrington (named by TIME/Forbe magazine as one of the most powerful/influential people on the internet/world) more than a year ago are starting to come true. His statement: “The eventual death of DRM is inevitable.”


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3 thoughts on “Guest Post: The Rise and Fall of DRM?”

  1. The apparent end to DRM in terms of mp3’s is due to a peculiar situation. One brought on by none other than Apple. Now it’s quiet ironic, that the very vehicle of the music industry Apple and their DRM enabled ipods play,content either encrypted through apple itunes or music which is “drm free”. Now the music industry is not very happy with the pricing they get on apple itunes. Isn’t that simple enough for the music industry ? ditch apple and get on to a different bandwagon. Gotya, there are too many ipod’s out there, so the only way to get music into the hands of customers is to stop using DRM. There you have it … music labels need to kill DRM to get mp3s and videos into those ipods. Do I believe that DRM is on the way out, I can bet my life on it that it will be back, in a shadier form, but it’s here to stay.

    How about watermarking your mp3s with your credit card info ? I believe it’s a very simplistic assumption to state that DRM is on the way out. It’s down but not out.
    My personal take on DRM is it’s here to stay, only v 1.0 failed.

    AC from an eponymous Technology house.

  2. “One brought on by none other than Apple.”??

    Apple has been fighting tooth and nail for DRM (instead of its eradication). Tried to pass it on as a condition necessitated of it by its content providers instead of using its clout in favour of customers.

    Talking of DRM depresses me. I shall not subject myself to this any longer on such a pleasant night.

  3. Funny Bit that… You want the steve jobs quote on DRM ? (well google it up …. )

    “When Apple approached these companies to license their music to distribute legally over the Internet, they were extremely cautious and required Apple to protect their music from being illegally copied. The solution was to create a DRM system, which envelopes each song purchased from the iTunes store in special and secret software so that it cannot be played on unauthorized devices.”

    Apple’s views on the topic …

    Apple for your kind information does sell DRM free music for a higher price… (from EMI if my memory serves me right.)
    Oh if u consider it plain DRM none exists on the music, they do have ur name on every MP3 (you can remove it easily …) but are u sure there is no watermarking on those which can be traced back to you to slap with a huge penalty ? What prevents the industry majors from doing that ?

    Palm did that to their ebooks if u buy stuff from you would know that palm ebooks need you to enter your credit card number.

    Like I said earlier DRM might be down for now, but it’s only an iteration away.

    Reminds me of the satellite decryption systems in use in DTH. Most of the systems used by Direct Tv in USA and Sky in UK and by extension TataSky in India are now difficult if not impossible to break. Even that for your kind information is DRM. Well there is a shady way of doing that called card sharing, it still requires you to have a valid card… and even that is not technology that you can buy off the street. Anyways DRM is not about preventing copying, it’s an economic interest keeping the cost of the potential infringement high, either via technology or via legal threats so that the average joe is scared into being law abiding.

    AC from an eponymous technology house.

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