DRM is not binary

Much of the dis­cus­sion over Dig­i­tal Rights Man­age­ment has focused on the extremes, offer­ing only and all or noth­ing approach. How­ever, my own recent expe­ri­ence is that there is much more gran­u­lar­ity to DRM than most peo­ple in the space want you to think.

Fresh­ness vs. Con­ve­nience vs. Value

When watch­ing movies, I have sev­eral options. I can

• Go to the movie theater
• Wait for the movie to be avail­able on video or DVD and rent it
• Wait for the movie to be avail­able on video or DVD and buy it
• Wait for a movie to show up on pay-per-view and rent it
• Wait for the movie to be avail­able online legally and down­load it
• Wait for the movie to show up on free TV and watch it or record it then
• Down­load it illegally

Those are basi­cally all the options I have. Let’s exam­ine what the dri­vers behind a par­tic­u­lar choice my be:

• Fresh­ness: I want access to the lat­est movie as soon as it’s viewable
• Con­ve­nience: I want to watch the movie where and when I decide
• Value: I want to pay a fair price for the enter­tain­ment value I get out of that movie

If we start map­ping each of those against the cur­rently avail­able options, pat­terns emerge: In order to get fresh­ness, I have to sac­ri­fice con­ve­nience (since I have to go to the movie the­ater and watch the movie at a set time) and pay a value pre­mium (since I have to pay the price of a movie ticket, which also gives me access to a larger screen, bet­ter sound, and a shared expe­ri­ence). In order to get con­ve­nience (down­load, rent, or buy), I have to give up fresh­ness (as movies are released in the­ater first and avail­able in other media later) and pay a lit­tle extra (price of rental or pur­chase) than I would if I waited for the movie to be free on tele­vi­sion. Last but not least, if I want to watch the movie for free legally, I have to give up fresh­ness (since movies are released to TV sta­tions at the tail end of the release cycle), deal with less con­ve­nience (I either have to record the movie or watch it on the station’s time and date and, if I want the com­pletely free option, I have to agree to watch­ing some ads in the mid­dle of the movie) . If I’m will­ing to break the law, I have to give up con­ve­nience (have to hunt down the movie on a peer to peer net­work, then make sure the down­load works prop­erly, then check that no virus has been embed­ded. To add to the prob­lem, the qual­ity of “fresh” movies avail­able over those free net­works is gen­er­ally bad, with sound and image gen­er­ally being of low quality.

DRM can be good

Now imag­ine a sys­tem where I could get all three. A sys­tem that I would call “Fair­Share.” In a Fair­Share sys­tem, I get access to every­thing for the right price and with max­i­mum con­ve­nience. If a new movie is released, I can pay a pre­mium to have it imme­di­ately avail­able in my house on the same day as it is avail­able in the the­ater but here’s the catch: I have to pay for that extra con­ve­nience. So I may have to pay more for that movie than if I went out to see it in the the­ater but I get the con­ve­nience to play it at home on my own clock. How much would I pay for that con­ve­nience? Well, it depends. Part of the pric­ing here is the value equa­tion: do I want to watch it alone at home or am I hav­ing a party with friends. Is this a movie I really want to see now or can it wait a week, a month, or longer. Can I hag­gle over the price?

That last part is impor­tant. Look­ing at the Ebay econ­omy, we can now fig­ure that there are cer­tain price points for just about any­thing and that those price points, when left to the cus­tomer to decide, are gen­er­ally within a stan­dard devi­a­tion of the actual price of an item. What if there were mar­ket­places for movie down­load rights? Let’s take a highly antic­i­pated release (the next Star Wars, for exam­ple). Some peo­ple would prob­a­bly be will­ing to pay a high pre­mium in order to see it at home with their friends? Just look­ing at the US box office returns for Episode 2, Attack of the Clones one clearly sees the impor­tance of fresh­ness: The movie made $110 mil­lion in its first week (bol­stered by a first week­end take of $80 mil­lion), $90 mil­lion in its sec­ond week, and $31 mil­lion in its third week. That means peo­ple would have been will­ing to pay a pre­mium to see the movie in week one and two but less of one in week 3.

Once the price has been set, it then only become a ques­tion of proper DRM licenses being avail­able. For exam­ple, I use a ser­vice called Movielink. It’s got a col­lec­tion of movies that can be down­loaded for any­where between 99 cents and 5 dol­lars. In that price range, the movies are about the cost of a video. How­ever, I don’t have to worry about return­ing them and, while choice is cur­rently lim­ited, it’s pretty con­ve­nient. Granted, I’m not the reg­u­lar user in that I already have a com­puter con­nected to my big screen tele­vi­sion, but the con­ve­nience is worth the price.

I think I could tech­ni­cally make a copy of a movie I down­load and give it to a friend. What would hap­pen when they run it? Well, the same thing that hap­pened to me recently. I wanted to rewatch one of the movies I rented and had watched pre­vi­ously. When I went to start it, a screen popped up, ask­ing me if I wanted to re-enable rights for 24 hours at a sub­stan­tial dis­count (99 cents vs. the $4.99 I had pre­vi­ously pay for the rental). Had I rented that movie in the video store instead and wanted to go through the same expe­ri­ence, I would have paid for the price of a rental twice. Once I started using the ser­vice, I noticed it also altered my buy­ing pat­tern. When I rented a movie I liked, I might buy it on DVD if I wanted to play it more than once. The cost of a DVD gen­er­ally is between 10 and 20 dol­lars. How­ever, when I started down­loaded, the replay for 99 cents fea­ture started to make the cost of buy­ing a DVD look expen­sive by com­par­i­son. While I do replay movies I bought, I don’t replay them often enough to war­rant a 20 dol­lar price point (that would be equiv­a­lent to replay­ing a mov­ing I down­loaded 15 times.)

What hap­pens here is that the prod­uct is priced prop­erly and even com­pet­i­tively, com­pared to other alter­na­tives. In a Fair­Share model, those prices would vary and all movies, either still in the­ater or released decades ago, would be avail­able at prices that would fluc­tu­ate based on demand. For exam­ple, movies from 1890 may not be very pop­u­lar but I’m sure there are hun­dreds if not thou­sands of peo­ple around the world who might want to watch those. At a cou­ple of dol­lars a piece (or local cur­rency equiv­a­lent), that’s thou­sands of dol­lars left on the table. Mul­ti­ply that by hun­dreds of thou­sands and you’re talk­ing about poten­tially bil­lions of dol­lars left on the table by busi­ness and poten­tially tens of thou­sands of gems that are cur­rently unavail­able to the public.

Shop­ping for legal music

Of course, all this works because I am deal­ing with a sin­gle device and a sin­gle model. How­ever, DRM becomes evil when it is lim­it­ing and tries to tell me what to do and where I should do it (hence reduc­ing my con­ve­nience). For this, I will bring up another exam­ple. I recently heard a music album that sounded good. Now, in the post nap­ster, free-music-for-all, world we live in, I could have eas­ily down­loaded it from a P2P net­work and kept it at that. For my own enlight­en­ment, I decided to actu­ally look for the album (not a sin­gle track but the whole album) on one of the P2P net­works, con­firm­ing a sus­pi­cion I had: Pop­u­lar tracks do show up on those net­works but less pop­u­lar tracks from an album do not. As a result, it is impos­si­ble to get a good feel­ing for an artist’s work beyond the hits.

My curios­ity sat­is­fied, I decided I would go and try to buy the album from a down­load­able ser­vice. Before I go any fur­ther, let me explain what I expect from tracks pur­chased online: I own sev­eral com­put­ers run­ning sev­eral oper­at­ing sys­tems (OSX, sev­eral ver­sions of Microsoft Win­dows, and Linux, pri­mar­ily); I also own a Treo, which I use as my portable MP3 player. Why that device in par­tic­u­lar? Because it com­bines my GSM phone, PDA, and MP3 player all in one and can hook up to the dif­fer­ent oper­at­ing sys­tems I men­tioned above. It’s the ulti­mate in choice and porta­bil­ity as I do not want to carry mul­ti­ple single-use ded­i­cated devices.

First stop was the iTunes music store, which fre­quent TNL.net read­ers will rec­og­nize as the tar­get of many posts. Well, turns out that it might be a bit of an issue. Apple doesn’t seem very inter­ested in sell­ing music to play on non-iPod devices and as far as trans­fer­ring a song to Linux, well… I guess I’ll have to wait for the Linux ver­sion of iTunes which should come out just around the same time as bliz­zards blow­ing through Hades.

Next stop, Real. After all, they made a big stink a while back about fight­ing Apple and pro­tect­ing open­ness. They’ll help me, right? Looked like the Treo would work but I was annoyed to learn that you had to use the RealPlayer to play the tracks. Where was the free­dom of choice in that? Why would I be forced to install their player in order to play the tracks? What if they went under and their player were no longer com­pat­i­ble with my oper­at­ing sys­tem? In one felt swoop, they elim­i­nated a whole bunch of stores to visit: basi­cally, the ones that force me into using the Real player in order to play music I bought legally.

War­ily, I approached, the remain­ing giant in the space: Microsoft. The good news was that they had a pro­gram called “Plays for Sure”. Finally, some­one will­ing to go with a real guar­an­tee that my music will play any­where! The tag line, right there on the home­page said it all:

Choose your music. Choose your device. Know it’s going to work.

That sounded really great: finally my music, my Treo, my dif­fer­ent oper­at­ing sys­tems would all work har­mo­niously… except for the fact that PlaysFor­Sure is another mar­ket­ing name for Win­dows Media Player. Basi­cally, it’s the same deal as Real: if you use their player, and their player works on the device you want to use, it’s OK. Oth­er­wise, you’re on your own.

I gave up on the online down­load sites and bought the CD, which I then ripped to MP3 tracks myself.

DRM can be evil

What hap­pened in that case was a case of what I would con­sider evil DRM, where the con­sumer is treated as a crim­i­nal by default. Because it is assumed that I will abuse my right, the sys­tem forces me to work within a walled gar­den. I can either get my con­tent from Apple on Apple devices, from Microsoft (and part­ners) on Microsoft pow­ered devices, or from Real (and part­ners) on devices that run the RealPlayer. This is not choice, it’s entrap­ment. If I were to fol­low the same logic to the extreme, I would have to have a dif­fer­ent tele­vi­sion in order to watch dif­fer­ent TV chan­nels. In other words, the case of music down­loads shows that DRM can be mis-directed. Why? Sim­ply because of com­pa­nies try­ing to main­tain cer­tain monop­o­lies and force the users to do their bidding.

DRM depen­den­cies

Look­ing at the two sce­nar­ios above, you might start notic­ing some inter­est­ing trends. First of all, DRM is sit­u­a­tional. A sin­gle DRM strat­egy does not fit all offer­ings. Why is that?

I would ven­ture that the rea­son is one of expec­ta­tion. The expec­ta­tion that I have of a music track are dif­fer­ent that the expec­ta­tion that I have of a movie or TV show and it is largely related to the inter­ac­tion with each media type. In the case of a music track, I want some­thing that will be portable and can move rel­a­tively quickly from one device to another; this is largely due to the fact that music is con­sumed on the run, and more often than not, it is con­sumed while doing some other activ­ity. Movie or TV watch­ing, how­ever, is some­thing that requires more involve­ment; it’s hard to read a book, drive, or run while watch­ing a movie or TV show! As a result, mobil­ity is not as essen­tial and the need for a movie to run on mul­ti­ple device is not as high. if it runs on my TV, maybe on a lap­top too and can be trans­ferred to a sec­ondary TV, it’s OK. The uni­verse of devices on which it needs to run is smaller and gen­er­ally more tied into the net any­way, which makes the DRM inter­ac­tion more seamless.

What I am try­ing to high­light is that while pro­po­nents and oppo­nents of DRM solu­tions both see the world in black and white, they may want to start a dia­logue and real­ize that there’s a lot of gray areas out there.

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