DRM Landscape

November 27th, 2005

November 27, 2005

Lately, I’ve been talking with a technology company has me thinking about just who makes up the DRM landscape. There are three value chain participants that are impacted by DRM technologies

  1. Media Companies (including new ones like Yahoo)
  2. Technology Companies
  3. Consumers

Traditionally, a DRM technology companies focus has been on selling to media companies as this was perceived to be the head of the snake and that was where the power was. The most ‘dangerous’ place to sell was to consumers as they were seen to be the weakest and thus they were neglected – resulting in a bad user experience and a lot of hostility supported by the slashdot crowd and journalists. However, this traditional “top down” paradigm is being challenged mostly due to the democratizing effects of the internet and technologies. Fairplay, the only market success in “modern” DRM (as opposed to simple copy protection) has focused on the needs of the customer above the desires of the labels (non-permanent licensing, high prices).

  • Media companies are, to put it mildly, reluctant to implement technologies that give consumers more power than they currently have, excluding piracy of course. Moreover, they play a delicate political game with other media companies and therefore are not inclined to cooperate with them on the implementation of standards, even when it is in their interest. A current example is the battle between Blu-Ray and HD-DVD. Worse examples in the past have involved the media companies battling new standards like MGM vs. Betamax.
  • At the other end, Consumers are difficult to sell to for several reasons:
    - Hard to ‘capture’ enough at once for critical mass
    - Very leery of DRM solutions
  • Technology Companies are in a vulnerable position as they are the somewhat reluctant intermediaries – balancing the interests of both groups. Currently the groups perceptions are divergent enough to be a real problem, however, there is some evidence to suggest that media companies are starting to realize they are in jeopardy, and consumers are also showing some indications that they will view digital content as having real value, making them more cooperative than they have been in the past. However, they need to be pushed to the inevitable future lower margins and higher volume, as the antitrust case against the record labels shows.

DMP Thoughts

May 25th, 2004

I was at the Digital Media Project in LA, which I found very interesting and informative. I won’t describe it – there is lots of information on it at the DMP website. (ed note. not anymore!)  It seems to be trying to straddle the line between the interests of society and content owners. Nevertheless, there still seems to be a “drift” toward the interests of the content owners, to the peril of the entire DRM endeavour. I just saw an article on the difficulties the Japanese broadcast system is having getting people to accept heavily restrictive copy protection on digital TV, a topic that came up at the DMP as an example of a ‘successful’ DRM implementation.

New Job

February 2nd, 2004

So the haps is that I am now working at Dolby, well actually a subsidiary of theirs, Via Licensing. It’s great so far, and I’ll write more about as I get my sea legs.

Travel

January 16th, 2004

Phil Windley’s site had a neato visited states thingy – I couldn’t resist. You can see the paths I have taken in roadtrips – we planned to take the minivan through idaho etc to Portage La Prarie in Manitoba a couple years ago but then our fab president took us to war and gas went to $3/gallon – so that was out. :(
statemap

create your own personalized map of the USA

UPDATE: 2009: nothing has changed.  almost got out again to winnipeg but the kids are still to young to get into it. Interesting point – this image is still up at world66, where many articles referred by this blog on newspapers are gone gone.  When will newspapers get a clue?

Ouch Again

December 14th, 2003

Sunday, December 14, 2003

Not surprising, but nevertheless not a good thing: Canada is going to start charging a surtax for mp3 players:

“The cost of an MP3 player will increase in Canada after the government’s copyright agency decided Friday to charge a tax of up to $19 per unit to reimburse singers and songwriters.

The new levy on MP3s will use a sliding scale depending on memory size: $1.50 for units with up to 1 gigabyte, $11.25 for 1 to 10 gigabytes, and $19 for devices of more than 10 gigabytes.”

From ashingtonpost.com – link outdated

This is a major ouch as it penalizes those who are “playing by the rules” – see the August 26 post for more of a commentary.

Astounding

October 30th, 2003

Thursday, October 30, 2003

Amazon is obviously digitizing the entire contents of their books. I have an image of this I’ll dig up

This must be putting a lot of pressure on the publishers to get their books online. I think that Amazon is going to be a pioneer here. Apparently there is a new way to check out books from a library that perserves the concept of “one copy, one checked out”, which I think does a decent job of bridging the structural gap between atoms and bits in regards to business models.

FEE VERSUS FREE

August 23rd, 2003

It seemed appropriate to start this commentary with a discussion of the running debate between fee vs free. It’s not worth getting dragged into a discussion of which is better, or even what “free” is, though I recognize that for some people these things are important. I’ve noticed that there is a pattern, though, and people break out into their groups pretty fast:

1. Companies that have content, and particularly those that have a traditional business model, are nearly rabid in their defense of copyright at any cost…the labels are a good example, and they managed to ram through the DMCA

2. Those who think that there should be as free a flow of information as possible. We’re all pretty familiar with this one, and for some reason the media likes to take this viewpoint. There are many orgs like the eff, and this one

3. There seems to be a third paradigm emerging gradually over time….especially since the dot-com collapse…which is the “fee advocacy” movement. The end of free is a good example and there are now consultants that are seem to be working quietly in this area. Some journalists seem to get it.

One thing that’s interesting is that it’s been sometimes framed as a “media company versus technology company” battle. One CATO conference I went to recently in Palo Alto posed it this way, for dramatic tension I guess. (they don’t seem to have the past events linked but I did find this) The fact is that DRM companies (which are technology companies to be sure) have had this 3rd viewpoint for a while. It’s kind of the neutral stance, so it’s not exciting. But like many things that are not exciting in by being either evil or principled, this way is the way that will work in the long run.

THAT WAS QUICK

August 17th, 2003

Thursday, August 07, 2003

I was trying to re-tool my post to be a little less harsh on Steve but he was all over it before I could finish:

Unfortunately, I have to disagree with your quote “The not-so-subtle implication is that Apple does not use DRM.”

I am well aware that Apple uses DRM. While the
sentence in the article is open to interpretation, I
don’t think that it implies that Apple doesn’t use
DRM.

Apple clearly uses DRM to control how downloaded
content is distributed. I believe, however, that
Apple’s implementation of DRM does indeed “slip in
under the social acceptability threshold”. Their DRM
has managed to seem harmless to buyers because buyers
can copy music to three different Macs and allows
users to burn songs as many times as they want.

The BuyMusic hodgepodge is simply a very poor
implementation of DRM as several publications have
pointed out.

This is not to say that Apple’s DRM is perfect.
However, they seem to have read consumer wishes and
offered them DRM they can live with.

A spoonful of sugar helps the medicine go down.

It’s a tired expression and I used to hate it, but I have to say that I think we’re in ‘violent agreement’.

DRM AS A DIRTY WORD

August 2nd, 2003

It’s funny how the term has become a rallying cry against copyright online: I was reading about the failure of BuyMusic.com vs iTunes.

Check this out: Stephen Van Esch writes:
BuyMusic’s DRM (digital rights management) system has been savaged by The Globe and Mail, the San Diego Union-Tribune, and TechTV. BuyMusic tunes can’t be transferred to portable music players.
What interests me here is implication that Apple does not use DRM.

Of course it has to. Apple never talks about it, which is smart. The article Van Esch quotes points out that there is DRM in both systems:
Apple’s “FairPlay” rules attempt to strike a reasonable balance between the desires of the music industry (“No copying!”) and customers (“No copy restrictions!”). Apple limits the number of CDs that can be burned using the same playlist, and prevents users from storing downloaded music on more than three Macs at one time.

BuyMusic.com has left the DRM decisions up to each label and copyright holder, which complicates the buying process. Some songs can be burned to CD just once; others can be downloaded, transferred or burned to CD an unlimited number of times. This is bound to create confusion when people attempt to make “mixed” CDs that combine music purchased from different labels.

Ironically, despite its name, BuyMusic.com does not actually let you “buy” music. The system’s “Terms and Conditions” note that content is “sublicensed” to users, “and is not sold, notwithstanding use of the terms ‘sell,’ ‘purchase,’ ‘order,’ or ‘buy.’”

As I’ve said before, iTunes has managed slip in under the social acceptability threshold with its DRM. BuyMusic makes the blunder (among many others) of calling it DRM when speaking to the music buyer. Foolish. Very foolish.

THE MEDIUM IS THE MESSAGE

August 1st, 2003

This is a good summary of the “Super DMCA” that is being quietly pushed through in states all over the US. (Irony: Unfortunately it requires a subscription – Business2 just changed from a free website to one that is paid.) The essence of the this legislation is that the cable companies are pushing for legislation that gives them more control what kinds of things can connect to the Internet. It’s interesting legislation because one of the things holding back the introduction of good content and more business uses of the Internet is the ‘excessive anonymity’ that means the Internet is a generally too ‘wild and wooly’ for many content providers.

On balance, however, this legislation seems to me to be far too likely to be misused – the idea that new every device, be it a computer, phone or even a firewall/router would have to be approved by a cable company is regressive and out of touch with what makes the Internet so dynamic. The author points out that had AT&T been able to hold on to laws that prohibited the connection on non-sanctioned devices we would not have had the internet become a public phenomenon as modems would likely not have been approved, at least not as quickly.

I see a pattern: it seems that business interests with content under management (in this case cable companies) work to have restrictive laws passed, society does something else (fair use), and the end result is somewhere in between. We saw this with Xerox machines, the cassette tape, and VCR’s. I think that this is similar – technology companies should theoretically be lined up on one side with their interests aligned with consumers – it’s unlikely that the apocalyptic vision that some are afraid of is somewhat exaggerated.

I remember a great story I heard several years ago: RCA was demonstrating the an early video casette to Disney back in the ’70′s and had made this video casette that would only play once before having to be returned to the manufacturer to be reset. Disney’s response: “This is great stuff, but we could never support it. I mean, how on earth could we ever know how many people are actually watching the movie?”

TURNING POINT

July 23rd, 2003

I’ve been meaning to write about iTunes for a while. It’s a remarkable achievement -
- Sales settling at around 500,000 per week.
- All labels participating
- Windows iTunes SW on the way
- Indie support – 9% comission/$40 registration to list an album

The $1 price for a track seems to be acceptable to the market. The most important thing, I think, is that Apple seems to have, either conciously or unconciously, realized that protection is not the main game – DRM as an accounting system and breadth are. The issue is not piracy but convienence.

This makes me think, for the first time ever, that apple may be a decent investment – the revenue possibilities from itunes, particularily in the windows market, are perhaps not priced into the stock. Of course Apple’s flawed model (HW+SW) is likely to always drag it down, but this seems like a real win on its own – this is the label-displacing energy in a paid model that has been so absent till now.

The thing that amazes me is Jobs’ skills in the entertainment business. (this and Pixar) It’s almost like he’s unaware where his true abilities lie.

Thanks to Rajiv Sinclair for keeping me up to date.
See this article

BLOOD FROM A STONE

June 12th, 2003

The Recording Industry Association of America (RIAA) sued four students on April 3 for allegedly operating music-sharing Web sites, accusing them of enabling large-scale copyright theft. Although the RIAA initially asked for $98 billion in damages, it settled the case on May 1, with the four students paying fines ranging from $12,000 to $17,500.
From http://www.pbs.org/newshour/forum/june03/copyright.html

Blogger

April 5th, 2003

I’m getting excited about the implications of the google purchase of blogger. Corporate internal blogs might be a way to utilize internal knowledge, and the addition of a google appliance makes the whole thing potentially disruptive to the content management field. Relation to DRM? You wouldn’t think so. But while researching the topic on slashdot I discovered RSS, which looks like a copyright management extension to XML.

BORING

February 23rd, 2003

Guess what. The labels are in trouble, according to this article from the New York Times (free registration required, sorry). This is a replay of the same article with the same types of quotes we’ve been seeing for 5 FRIKKING YEARS. “Sales are down”. “Kiosks might help”. “Prices too high?”. “Record Execs lethargic”. “Downloads not working” It’s bloody boring already. The (major) labels are finished, and I say that without emotion, though the glacial realization of that fact is rather maddening. They’re just not going to pull through. The only interesting question any more is how long they will live in the ICU of legally brain dead companies (the major airlines are in the same terminal ward.) There’s been a major accident, people. They won’t pull out of their collective coma. Nothing going on upstairs.

Moreover, it looks like the movie studios are just being wheeled into the emergency room. The price of DVD-R blank media is falling like a rock. The death spasms are going to be more violent but the outcome is very likely to be the same.

BACK AGAIN

January 12th, 2003

Phew, that was quite a pause…a very busy end of term in my MBA (almost done now, looks like the summer will be the end!) and a new contract with Cenzic, doing product development for an interesting new website security product.

Another thing that I’ve been doing is talking with Smart Mediary Systems who is doing some great things in the legal publishing arena. They are doing very sane things with DRM in that they are doing what works – get the content, offer ways to manage it well, put protection that works but is not onerous, listen to your customers and give them what they want. Basically the opposite from Movielink. (I tried them and it’s a long story but basically they wouldn’t refund me $2.99 even though the system ran aground on technical issues – well, maybe they will, but they want me to phone them about it. Who has time for that kind of thing?)

ONLINE MOVIES

November 11th, 2002

The BBC reports that movielink is now launched. The movie industry is just a hair ahead of the recording industry with the benefit of that awful experience. They have a slightly more reasonable catalog. But they are still pricing it at a “what the hell?” level…$2-5 for a 24 hour playable MPEG-4 download. It’s a small step for a company and a small step for mankind.

The sad thing is that when someone comes up with a decent business model, they get shut down, like movie88.com, a scrappy little Tiawanese company. Reminds me of the icravetv.com story, a little Canadian company offering timeshifted TV over the internet, something that is legal in Canada but the MPAA still managed to shut them down.

THE BROADBAND PARADOX

October 28th, 2002

This is a good idea:
The impractical method for stimulating broadband adoption is to make music free on the Internet. As Thierer notes, Napster and its cognates have been among the main reasons people buy broadband connectivity. Instead of using the law to choke file swapping, perhaps we should encourage the telecom industry to buy off the music studios. Total recorded music sales in the US come to a grand total of about $15 billion per year, while
telecom spending is over 20 times higher. Thus in the abstract, it might be a wise investment for the phone companies to buy out the studios. This is of course wildly impractical for business and legal reasons, but it would quickly stimulate demand for broadband. (It would also demonstrate that the content tail should not be wagging the telecom dog, as it too often does in political, legal, and business discussions.)

From http://www.dtc.umn.edu/~odlyzko/misc/thierer-broadband-paradox

This is a somewhat naive and highly academic solution that would require a lot more coordination than is likely possible, but it brings up an important point about the relative scales of the music and telecom industries. It also underscores a core problem with the internet (and, I believe, some part of the internet crash) – that good digital content is simply not available online. There are two reasons for this: the lack of a good DRM system and the lack of public acceptance of paying for bits with no physical manifestation of the content.

What’s interesting is that there is an important psychic tug of war going on between what people think they are buying and what companies want to sell. With a CD, the record company wants to sell a temporary copy. They effectively do so by changing the format every 20-40 years (72, LP, 8 track, cassette, CD). On the other hand, consumers want something permanent or at least the sense that it’s permanent. I think that this gap will plague the development of digital media vending mechanisms until the consumer has the sense that the copy they are getting is accessible indefinitely and that they will be able to move it to another medium. Record companies have a tough time with this idea.

I also suspect that going forward, music may share some characteristics with long distance telephone service: as it gets cheaper we spend more on it by consuming a disproportionately larger amount. My telecom bill is higher than it’s ever been despite the steady decline in prices because I never think about the cost of a long distance call anymore.

FLASH TRENDS

September 24th, 2002

Origionally an animation tool, Flash was gradually co-opted to be an animated logo generator. This was an annoying but essential development of the standard. (by the by, why do little companies feel compelled to have the flash thing running across the page? Respected companies, who can definitely afford to, don’t. Have a look – Oracle, Cicso, Microsoft, even Apple are all not inclined.

The good news is that there are some excellent things happening with Macromedia Flash these days. I am very happy to see that some extreemely creative people have started using Flash as a means of publishing animated shorts My favorites: Zefrank, OddTodd, and Dogshitter Wants. Okay, some of it is bizarre, but I love it.

Here’s the sad part. These people who now have a channel don’t have a simple way to get paid for their work. (Zefrank, for example, is looking for a web host.) Advertising turns out to be pretty much a bust all over the web, at least for small operators – the web is, after all, a narrowcasting medium (with all the things advertisers hate: no national borders, short attention span, and altogether too much control over the outlet device (the computer)). Macromedia would appear to be oblivious to this: at a conference I posed to a Macromedia product manager the issue of valuable content in Flash, and the potential value of putting in a vending mechanism. It’s a natural: you have the UI, and now with FlashMX there is some excellent database connectivity. (You could even use it for music.) He was completely flat on the subject. Maybe they’re keeping quiet about something. I doubt it.

WHAT BOOKS FEEL LIKE

September 13th, 2002

Friday, September 13, 2002

At Seybold yesterday I stumbled across E-Book Systems and spoke with the president, Sengbeng Ho, for a little while at the end of the show (is the end of a show when more senior people are around? I never noticed before). Sengbeng has a doctorate in something like cognitive science/usability and E-Book has created a neat application that really does simulate the feeling of flipping pages. It was high performance and had good tactile feedback – you could see the contents of the pages as they turned and, maybe even more importantly you can see where you are in the book, how much more there is to go, etc. We talked a but about this style which on the face of it would seem unnecessary and inefficient, hell, just plain old-fashioned, (vs scrollbars) but in actuality just seems to make sense once you see it in action. I have always thought that when portables have better battery life, and more importantly, wake from a non-power consuming state almost instantly, and most importantly are really much tougher, we will start to see the move to E-Books. What I hadn’t realized was that the UI was not right either.

Just later the same day I was in the SF MOMA around the corner and saw an E-Book with Lewis Carroll’s photographs (in addition to the photos themselves, which were surprisingly uninteresting, actually). The (hypercard based, I think) piece was done in the style that the photographer used to like to present his photos in an album, one per page. The reason I bring this up is that there was a page flipping thing here too, but just that little less tactile feedback (no visibility of the images on the turning pages, no sense of where you were in the book, no ability to turn more than one page at the same time). It was just enough less ‘real’ and felt phony and computery.

SELF PUBLISHING

August 29th, 2002


Lately I’ve been thinking about self-publishing. At a Ryze mixer I was talking with Steve Breuhaut who was at SealedMedia. It seems that even as big, well funded companies (Sealedmedia, InterTrust) shrink, or disappear – when I was at InterTrust I used to track MediaDNA but they are gone.

A fair while ago, Fatbrain set up a digital self publishing system (greymatter as I remember), but then imploded. But now, self publishing seems to be getting some traction. It seems that as venture funding contracts, there is less support for inviable business models. Qtik seems to be an almost grassroots effort at subscription content. What’s interesting though is that the web allows people to publish more simply as it is a collaborative medium, either by helping small authors traditional publishing (getpublished.com) or to publish to more web type environments (blogs). This is whole different topic, but I want to comment on it soon.

But the interesting thing is that the meduim seems to be changing the process by which people actually publish.

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