The Future of DRM = No DRM

Finally someone saw the light ...

I was really pleased to find this article in my mailbox today: EMI, Apple partner on DRM-free premium music >
Finally, I screamed to myself, someone got it right. Hmmm, why am I not amazed it was Steve Jobs who managed to pull this again?

I recently had been reading about Digital Rights Management (DRM) systems and I couldn't help but have very mixed feelings about the entire concept of DRM.
Technologically it doesn't seem to make sense, and marketing-wise it makes even less sense!

Let me elaborate on this...

FIRST THE TECHNOLOGICAL ASPECTS:
DRM systems use technology in order to restrict the "use" of copyrighted content. Often the restriction in usage is just a way to make sure that the content (e.g. a downloaded song which a user paid for) isn't easily "distributed" to other people. When buying a song online, the buyer gets granted a set of "permissions" via the License that came with the downloaded song.
To my understanding DRM uses a mixture of symmetrical and asymmetrical (PKI) encryption technology.
Let's assume the content we are legally downloading is a song. This song is first encrypted and sent to our device (laptop, mobile phone, ... ), but strangely the key to actually decrypt it is also being sent along with the encrypted content. On a mobile phone it is likely to be the Java Client that will handle this decryption key in a way that is kept invisible from the end-user.
Compare this to the encryption technology used for movie-DVDs. The data on the disc is encrypted but you actual own the decryption key (inside your DVD player). Let's have a look at history and remember the times when a messenger was sent out on the back of a horse with an encrypted message ... nobody would have been so stupid as to actually send out the instructions on how to decode the message together with the encrypted message! Well, it seems that DRM does exactly that?!
Again to my understanding, and please correct me if I'm wrong, on top of the symmetrical encryption used to encrypt the song, another layer of -pretty safe- asymmetrical PKI encryption is used but only to "unlock" the permissions granted by the License. So, the Licenses are being handled in a pretty secure way, but the original content isn't really.
So, from a technological point of view DRM looks quite similar to building a rock-solid house on quicksand... it just doesn't seem to make sense.

FROM A MARKETING POINT OF VIEW:
When I buy a CD, I own the physical carrier and I can use the content of it to my own liking ... as long as I don't copy it, broadcast it, distribute illegal copies over the Internet, etc. I can however sell the CD, I can lend it to someone else (as long as that person doesn't intend to copy it), I can give it away, I can swap it for another CD, I can play it in my car, on my laptop, on my hi-fi, convert it to mp3 and play it on my mp3-player.
When I buy an album on iTunes however, the usage becomes more restricted because I become a Licensee of the digital content, being a "party obtaining rights under a license agreement". I have restricted rights and by default I can only play the content on an iPod, my laptop and my hifi (through a cable or Airport Express), and I can burn a CD to play the songs in my car for example. If I would decide to transfer my songs to another mp3-player (not from the iPod family) I would need to rip this audio CD and use these newly generated mp3-files. I can however NOT lend the original mp3-files to anyone else, I can not give them away, I have only a limited amount of devices I can activate these files on and I can't sell them once I'm getting fed up with listening to them.

Another issue is the quality of the files. An audio CD obviously offering better quality than compressed files.
So, when buying an album on iTunes I end up paying quite a lot of money (especially in Great Britain: compare the price in £ to the price in $) for a product that definitely isn't as versatile, that I can't sell and that is of lower quality.
When you also actually acknowledge that there is an illegal peer-to-peer file swapping universe out there where songs - sometimes in better quality than on the legal sites - are being swapped for free, then the restricted usage and lower quality of legal sites such as iTunes just don't add up.

Now, just compare the price of Norah Jones' latest album on Amazon.co.uk and iTunes:
On Amazon.co.uk you pay £6.97 for the "Not Too Late" audio CD.
On iTunes you pay £7.99 for the same album. So you basically end up paying more for the "privilege" of being restricted to limited usage permissions.

Apple however has done a pretty good marketing job with iTunes, because it takes quite some skill to sell less good products for more money.

CONCLUSION:
The introduction of DRM has never been a market or customer-orientated approach. It was just something shoved down the throats of customers by a record industry that ran scared and tried to hold on to its' old business models.
It took balls (pardon my French), or should I say courage, for EMI to actually make a 180 degrees paradigm shift and go for a DRM-free distribution of music. I really hope future will show us EMI did the "Digitally Right" thing ;-)
Now let's just hope that other companies will follow this example and legally downloaded - and paid for - content is of excellent quality and can be played back on whatever device is ours.
I might finally be convinced to start buying music online now ...

Fresh new Marketing & Technology Blog ...

It's been a while since I wrote opinion pieces about the impact of the Internet on the music industry. It must have been 1996 or 1997 and I was working as a Product Manager for a Belgian indie record company, called Big Time International. I remember an article being published in one of the first editions of the print magazine Clickx and a couple of articles in newsletters such as "Zakelijk Internet".
Now, 10 years later... I think the time is right to start Bloggin' about Marketing, Technology and how they interact.

If you rather fancy a more leisurely Blog (with great travel tips), please check out my other Blog.