Let me start this post by summering up the conclusion of the recent months: The reign of Digital Rights Management has seen better days…
Since the classic battle for keeping customers in line back in the Napster lawsuit the Greedy Business ™, consisting of major parts of the music, movie and software industry, has been trying more than hard to force DRM down into the consumer’s throat. The music industry back then was faced with a problem they and their expensive analysts could not account for: Their sales were declining… Something had to be wrong – It couldn’t be that their distribution model or their quality has faltered… Only one thing could come to mind in their heads: The consumer must be doing something bad! They started pumping tons and tons of DRM into their productsas they seemed convinced for some reason that this would eliminate piracy or reduce it to a bare minimum… Now ten to fifteen years on and how did the strategy fare?
Well, they are still seing declining sales and after thousands upon thousands of lawsuits against their customers they have also completely lost consumer trust. Even though the numbers are staring them in the face they still cannot see it. DRM has reduced piracy by 0,001 % at best. My guess is that piracy is actually doing much better today than back in the days of Napster. What happened to DRM then? Well, it left the average consumer back in a frustrating situation: He buys the CD or DVDs so he helps the declining sales, but he cannot get his versions to work correct because of DRM and looses interest in the product. Meanwhile the pirated versions provide an option you cannot find the legal market anymore: High quality music without technical hazzle or restrictions on use!
How does for example RIAA, as a glorified member of the Greedy Business ™ react to this situation? They watch the music business’ revenue slump year by year, but see absolutely no result on their work. However, they can still not see the picture – not even after more than ten years! They have not tried to search for a different answer in all that time. Even the most damp of analysts can see that most of their declining sales numbers can be explained by the “Single Effect”, but nevertheless they regard no other option than to sue their customers and place bad products on the shelves for the legal market as the only choice. In most analysts outside the Greedy Business ™ it is clear as broad daylight that the Greedy Business ™ is having dire problems with album sales and cannot find an alternative distribution model to account for this loss. Even though DRM has not even been succeeded in stopping a single pierce of music from reaching illegal distribution channels the Greedy Business ™ still pursues the way of DRM, like there are no alternative.
Another problem arises when you have entire industries, like the Greedy Business ™ represent when talking about the music and movie industry, that cannot fathom the technology and how to harvest its new possibillites. While others were quick to see the potential of the Internet and its amazing use as a distribution channel the Greedy Business ™ first tried to have the entire Internet shut down instead. Instead of understanding and taking advantage of a new technology like Internet Radio the Greedy Business ™ completely messes things up with a radio tax that will utterly destroy the technology and leave behind another vacuum in a place where a possible distribution channel could have been created. Furthermore RIAA goes into the case and suddenly poses as the only authenticated place get money from the collected Internet Tax – even though they do not represent many independent artists that are played on the radio. And who who want to be represented by the company that got the vote as the worst company in USA in 2007? Not exactly what most upcoming musicians think of good publicity for their fans… Like RIAA the MPAA of the Movie Industry is just as slow and complacent about new technologies. The great fears of piracy has let the MPAA to slowly destroy the once great experience of going to the cinema – an experience the movie industry shouldn’t want to loose as the sales of DVDs are set to drop dramatically from now on, as the battle for the next-gen DVD is still very unclear and far from consumers. Every day new technologies appear that can open up new markets, like BitTorrent, but the first thing the Greedy Business ™ does is to try and stop it. The father of BitTorrent has been known to say that he thinks the current DRM technologies are destroying new technology like BitTorrent.
Meanwhile the technology firms continues to come up with newer and more expensive copy-protection schemes, that has one thing in common with all the DRM schemes that has come before it: It will be cracked with days and will not prevent a single pirate from pirating a DVD or CD… Sony’s latest attempt at a DVD DRM scheme proved to be so useless that the DVDs could not even be played on Sony’s own DVD players! Luckily because of their long history with malfunctioning DRM schemes, containing rootkits and other malware, Sony was for once quick to recognize the problem and fix it… The constant reign of trouble that Sony has been causing with their DRM schemes over time has quickly made the company one of the most hated companies on the Internet. The most discussed DRM today is AACS, that was claimed to be impossible to crack, like many other before that. Once again we see history repeat itself. In the same manor in which the DVD protection scheme, CSS, was published all over the Internet like wildfire and made copying a DVD a trivial task for most users, the next-gen DVD formats like Blu-Ray and HD DVD can now be copied thanks to the Internet distribution of an AACS crack code in Hex. The most interesting part of that tale is that it showed how little people wants DRM as a revolt suddenly appeared on the social newssite Digg, when AACS LA tried to remove references to the hex code. It is my guess that this revolt will create an even more polarized world, which is quickly becoming us versus them – and that’s not exactly the kind of publicity and public relations the movie industry should go for, when they are desperately trying to win consumer over to their next-gen DVD replacement in a time where they need the sales to go up, instead of down.
While DRM continues to be made and shipped to unknownly consumers who struggle with it daily another battle is raging in the courts, where the Greedy Business ™ is busy suing their customers. It can be a pretty daunting task to sue your customers when you your understanding of technology and IT is several centuries old, like RIAA’s “expert” witness in one of their court cases. Their methods in court are often comparable of those used by the mafia, and even judges are starting to tire of this misuse of their authority and their methods. The problem of going to court is that even though you spend half of your development budget on lawsuits against your customers you might end up with a court ruling that goes against your wishes, like one the latest court ruling against the DVD consortium where the judge actually approved of DVD copying. The worst part about court rulings is that when you loose a lawsuit you leave yourself open to countersuits. Currently RIAA is having major problems with countersuits and furthermore being accused of copyright misuse at the same time. In the mean time in another court RIAA is being accused by the judge of lying in court. In another attempt to rol in some money for the needy executives of the Greedy Business ™ they have decided to start a propaganda campaign and a massive launch of lawsuits against college student across USA. Luckily some of the Universities doesn’t bend over to this oppression and have instead chosen to counter-sue RIAA for waste of time and ressources on their part. One could only hope that this would prove how ridiculous their claims and logic far too often is. Unfortunately some politicians doesn’t have a single analytic part in their brain and buys this propaganda without questions, calling the Universities “A wretched hive of scum and villany”. One that buys the numbers issued from the RIAA/MPAA without questions certainly doesn’t qualify as intelligent in any way. Especially since it is by now a wellknown fact that the MPAA has been caught lying on numerous occasions. And for the Greedy Business ™ to start this campaign? Well, it sounds like a perfect business plan: To ensure that their current largest market segment is sued into hell… Makes good sense! Just like the business plan is sound when you sue a ten year old girl with a disabled mother or a stroke victim…. The Greedy Business ™ have misled themselves and they have ended up with a completely screwed up image of their customers. It isn’t always a good idea to try and act the hero against the “evil pirates”. Especially if the Greedy Business ™ themselves doesn’t mind pirating from others. The “antipiracy” strategy of RIAA/MPAA of using lawsuit upon lawsuit against their customers are backfiring big time now. The situation has become so tragic that one can only ridicule the Greedy Business ™ for not altering the strategy immediately.
The discussion of DRM is slowly moving into the public spectrum as more and more people are affected daily and with it times are heading for a change. The wind of change can be seen, especially with the latest development on the DRM stage… The closed DRM system employed by Apple in the iPod/iTunes distribution model has been getting scrutinized by the European Union as of late. The European Union and especially Norway and the other Scandinavian countries will no longer accept such vendor lock-in by DRM from Apple.
It is clear to many now that DRM has nothing to do with stopping piracy. The Greedy Business ™ can read numbers as well as I can. It has always been about controlling the market, controlling the consumer. In terms of software we can see how Microsoft has become a market leader and quickly become a master in forcing people to get DRM into their products and then been quick to use this power to control the market afterwards. The concept of DRM and its current appliances has been dealt a hard verdict by the Economist and by now it should be apparent to everyone in the industry that even though they thought DRM could wield the market for them it will never become the new distribution model they hoped for. For too long have the Greedy Business ™ used it to keep control over markets and kept a distribution model alive that should have been replaced more than a decade ago. The Greedy Business ™ found that instead of going with innovation and giving their customers what they asked for, like a normal market player would do in a free market, they chose to misuse the law – and especially the DMCA – and sue their customers into hell in their thousands. Luckily it has been proposed that a FAIR USE act should be applied to the DMCA, which of course meets fierce resistance from the Greedy Business ™ that fear that their army of lawyers, which by now must be around 80% of their workforce, would end up loosing each and every case and in the end become unemployed. In the meantime another problem for the Greedy Business ™ have appeared in the EU, where a proposal is preparing to allow personal copying and filesharing, where there are no profits made. This sort of embrace of technology and progress is the direct opposite of what the Greedy Business ™ wants to do. In their wretched minds they want more DRM and it should be more restrictive, like the AACS, to give them more control over the consumer and the entire market. They do not see the problems that DRM causes, like the fact that the current DRM schemes is killing legal BitTorrent movie download and thereby destroying an emerging market, or the fact more than 75 % of all customer problems are caused by DRM. They only see profits, not customers, which they regard as cattle – nothing more! Attempts have been made to try and explain DRM and the problems that it is causing to executives in the business, but little understanding is met – only profits matter… They have completely failed to realize that what they actually did with their DRM iniatives was to alienate their customers!
There are plenty of bad signs in the industry that they still don’t see what they are doing, but lately something has happened. Major artists are deciding to go the non-DRM way and head for the new dsitribution model, instead of swelling in the past. The MPAA chairman has been out saying that he promises free DVD copying and interoperable DRM. These are good signs in a bad time, but the major light at the end of the tunnel is the result of the pressure EU has put on Apple because of their Vendor Lock-in DRM in iTunes and the fact that EMI is in financial trouble and needs a change in their distribution model. This was the perfect match… A company like Apple with a new and popular distribution channel that has proven its worth and a member of the Greedy Business ™ in dire straits that wants to make profits. They have announced a deal that means that EMI’s music catalog will be available without DRM on iTunes as of this summer. This move towards the end of DRM and higher quality in digital music is seen by many as the way forward and back to the consumers for the Greedy Business ™. There has already been many reactions to the deal between EMI and Apple. There has been speculations that Apple has been taking too much credits for this move, which is essentially EMI’s exclusive decision. However, there is no doubt that this deal is having repercussions throughout the entire market. Amazon is preparing to launch a DRM-free music service to compete with iTunes, Microsoft has suddenly expressed interest in selling DRM-free music… Suddenly the world is turned upside down! One cannot escape the past, however, and Apple and Microsoft has been caught in battle by another company, that are using their own weapons against them. Apple, Microsoft and many others of the DRM-pro team, who has helped the Greedy Business ™ by inventing, implementing and forced DRM into many of their products are suddenly sued for not using DRM, in accordance with the DMCA. I could not come up with a better twist than that – especially since the DRM-pro team has used the DMCA together with the Greedy Business ™ for long to suppress other companies. Most companies will soon see that DRM is heading for the end of its lifetime and alternatives are suddenly examined. With countries like Norway seing that we need modern laws that allows filesharing in a modern society it is only the completely consumer-blind companies like Warner Brothers that firmly stick to DRM these days. Of course Warner Brothers gets ridiculed for this by more modern company leaders, like Robertson of MP3.com. Of course one could ridicule Warner Brothers, but why bother? They are only saying this because they can no longer innovate and find an alternative. One should instead ridicule a company like HBO that wants to change the name of DRM to make it sound more positive! No positive spin will make the consumer see why all their good money is spent on a product that doesn’t work, costs a lot and allows you to do much less than the free one offered by the pirates! The change is coming and only the non-innovating companies like Warner Brothers and HBO will be left behind. Later they will see, like Sony did far too late with MP3, that the consumer still holds the key to profits and they will be in dire straits…
The most interesting part is about to happen… Apple is about to renew all their contract with the content-providers on iTunes. It will be interesting to see how the repercussions of the EMI deal will affect those dealings. My guess is that Warner Brothers will soon find themselves to be rather alone on the matter of keeping DRM alive without non-DRM alternatives on iTunes… Once again Apple is holding all the cards, some dealt to them by EMI and the rest by the amazing performance in terms of sales that iTunes is generating. At this point in time, with no alternative on the new distribution channel, companies like Warner Brothers will be left in the dark without Apple – and in the dark no profits are made …
