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3/9/2007
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Is DRM Doomed? The Case Against Digital-Rights Management

In the wake of Steve Jobs' call to eliminate anti-copying technology, are the music and movie industries poised to move from protection to monitoring?

The debate over digital-rights management is coming to a head. On the one hand, efforts to implement technology to prevent the copying of consumer-oriented entertainment is increasingly viewed as ineffective. Indeed, no less an industry figure than Apple CEO Steve Jobs has called for the elimination of DRM. At the same time, content providers continue to search for a magic technical elixir that'll protect their revenue streams against unauthorized copying.

Still, what with industry leaders such as former Yahoo Music head David Goldberg joining the chorus in support of Jobs' stance, it's apparent that the industry may be nearing some kind of inflection point, which could lead to a new approach toward DRM.

Clearly, the current tactic isn't working. A recent survey by JupiterResearch shows broad dissatisfaction with existing DRM models on the part of European music executives, two-thirds of whom agree that dropping DRM would drive sales. Elsewhere in Europe, consumer groups from Finland, France, Germany, and Norway are pressuring Apple to make its DRM interoperable with the services and devices of other vendors.

The music labels "should drop DRM," said Steve Gordon, a New York-based entertainment attorney and consultant, former director of business affairs for TV and video at Sony, and the author of Future Of The Music Business. Even though DRM is less restrictive than it used to be, it still creates headaches for consumers. If you put up any roadblocks, you're hampering the success of the digital market. And it's just absurd, as Steve Jobs pointed out, when people can get music without DRM for free anyway."

Even those who pioneered the development of DRM technology acknowledge its problems. Protexis CEO Karl Hirsch recounts a conversation he had with the chairman and CEO of a public company who advised him, "DRM is a tar pit. You've got to get out because it's going to be gone in five years." That's a sentiment Hirsch said he mostly agrees with, though he still believes DRM can work if it's less restrictive, more obvious to consumers, and decoupled from a specific distribution channel, as Apple's FairPlay is tied to iTunes.

Maybe so, though James McQuivey, principal analyst at Forrester Research who covers television and media technology, is less sanguine about the market demand for DRM. "I can't imagine any scenario in which a new and revolutionary DRM solution would make things better," he said. "In fact, I can only see it making things worse."

It's hard to see how acceptance of DRM-encumbered systems could get much worse. Since the early 1980s, when the computer and entertainment industries warmed to copy protection technology, DRM has done more harm than good.

DRM is supposed to stop unauthorized copying. But the two most seemingly successful consumer-facing DRM systems, Apple's FairPlay and Macrovision's video-cassette copy protection, succeeded because they convinced content owners to enter the market, not for the strength of their content locks. That's because copy protection can be defeated, as recent reports that hackers have discovered the "processing key" for HD DVD and Blu-ray discs demonstrate.

DRM is supposed to protect revenue streams for content and software companies, but with the exception of Apple, it looks a lot more like a business risk. Ill-conceived DRM has injured or killed plenty of promising technologies and damaged many a corporate reputation.

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