2006 will go down in history as the year the entertainment industry finally started to take digital content distribution seriously. So far this year we’ve seen television networks and film studios experiment with a surprisingly wide variety of new distribution models, while the recording industry has started to realize that there may be a future in downloadable music. If there’s a downside to the recent explosion of digital content it has to be the entertainment industry’s unhealthy obsession with digital rights management (DRM).

In the past entertainment companies have been hesitate to distribute content digitally due to piracy concerns. Those concerns have apparently been replaced by a complete and total faith in DRM. Or, at the very least, a belief that it will be possible to build viable new business models around DRM protected content.

There’s just one problem — DRM doesn’t work. It’s a futile exercise in artificial scarcity that punishes honest consumers while doing little to slow the tide of piracy.

Here are a few reasons why DRM is an exercise in futility:

• DRM encoded content isn’t secure. This past week we’ve seen both Microsoft’s PlaysForSure and Apple’s FairPlay DRM systems cracked. Those two systems combined protect nearly 100% of the commercially available digital music. While Apple and Microsoft will likely move quickly to patch their security, it’s only a matter of time before these systems are hacked again. It’s not just music that isn’t secure. The DRM scheme protecting commercially available DVDs is also trivial to break.
• DRM restricts fair use. While pirates have the tools to make unlimited copies of commercial content, honest consumers are faced with arbitrary restrictions preventing activities that have traditionally been considered fair use (e.g., copying for personal use).
• DRM frustrates consumers. Most DRM systems are so poorly implemented that they create needless headaches for consumers. We’ve seen countless reports online where consumers were unable to obtain or renew DRM licenses to listen to legitimately obtained content.
• DRM confuses consumers. There’s no such thing as a standardized DRM policy. The iTunes Music Store comes the closest, but only because Steve Jobs has taken the lead as benevolent dictator forcing all of the major labels to comply with Apple’s FairPlay terms. The labels, on the other hand, would like the freedom to define their own terms. If they get their way confusion will undoubtedly prevail. Imagine a world where all of your media products have different usage limitations. The entertainment industry’s dream-come-true will ultimately turn into DRM Hell for consumers.

While it’s true that the Digital Millennium Copyright Act (DMCA) outlaws the circumvention of DRM systems, it’s also true that criminals generally don’t pay much attention to the law. One of the results of the DMCA is that honest consumers are forced to suffer buggy DRM implementations and restricted usability, while criminals continue to make illegal copies of media products. At least a few honest consumers have turned to the dark side and begun using cracking tools in a last ditch effort to make legitimately purchased content work properly.

At some point the entertainment industry needs to realize that DRM is actually bad for business. There’s a very real risk that DRM could damage the market for legitimate digital content.

So what’s the answer? It’s actually very simple. Offer consumers unprotected digital content at a reasonable price. This approach would reward honest consumers by eliminating the DRM nuisance factor.

While it may seem radical, it’s worked quite well for at least one online music service. eMusic has grown to be the second largest digital music store because it provides users with unencrypted digital content. By foregoing DRM, eMusic has eliminated the complexities associated with DRM, and all of the related device compatibility issues. As a result, eMusic is the only major digital music store (besides iTunes) that can offer its users iPod compatible downloads.

While the answer seems clear, something tells me this situation is going to get worse before it gets better. Later this year Microsoft will release the Zune music player. Zune will reportedly use a new DRM scheme that will be incompatible with both PlaysForSure and FairPlay. While consumers may welcome competition in the media player market, the last thing we need is a new DRM system.

credit: Medialoper

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