Know your rights

    It is easy to see, even at first glance, the various legal issues that arise when DRM is discussed. Most obvious is copyright infringement: Hollywood and the music industry in particular cite losses of billions of dollars due to 'fake' DVDs, online file sharing and MP3 'burn parties'.
    Comment, Broadcast Business


    It is easy to see, even at first glance, the various legal issues that arise when DRM is discussed. Most obvious is copyright infringement: Hollywood and the music industry in particular cite losses of billions of dollars due to ‘fake' DVDs, online file sharing and MP3 ‘burn parties'.

    DRM allows the rights owners to put in place a system that makes such illegal behaviour more difficult to perpetrate and, theoretically, force the consumer to purchase the product from legitimate sources instead, spending money in the process.

    One key advantage of DRM technology over other solutions, such as suing the infringers, is that it addresses the problem of infringement before it occurs: it prevents rather than cures.

     "[As] no film studio can afford to seek legal redress against every act of infringement ... DRM is a more cost-effective way to address the issue."

    Another advantage is that no film studio or record company could afford to seek legal redress against every act of infringement and DRM is an infinitely more cost-effective way to address the issue of illegal copying by millions of people.

    The anti-DRM movement, however, identifies its own legal issues and resents the imposition of DRM-encoding and the associated restrictions of use and liberties.

    Much of their argument is based on the perceived or potential disadvantages of DRM software, in particular that it adds to the cost of manufacture or distribution, that true pirates can crack the DRM protection anyway and, more saliently, that the added complexity creates reduced reliability in the medium to which it is applied.

    These arguments are, however, of limited validity: whilst DRM may not be perfect or 100% effective, the principle is really what is being debated, not the quality of execution which, it is assumed, will improve with time.

    Furthermore, truly bad DRM technology will weaken a product's standing in the market and, ultimately, risk rejection by consumers, although it is arguable that the consumer in question should be compensated in such cases where the enjoyment of the product is diminished.

    If a product is only available using DRM technology that inhibits enjoyment, that product will not sell well and consumers will typically either ignore the product altogether or seek out ‘cracked' versions from unauthorised sources.

    One point that tends to be made with most conviction, is that consumers buying DRM-protected products enjoy less freedom than those that bought records, tapes and non-encoded CDs (some Sony CDs now come DRM-encoded) and of course less freedom than those consumers that buy pirated or unprotected copies.

    Often DRM technology embeds the name of the purchaser into the technology, locking out use by others, which raises the issues of data protection and civil liberties: why should anyone be obliged to have their details monitored in an esoteric manner by record companies?

    Companies such as Apple and EMI could, however, present a robust counterargument that these systems only affect the consumer in a tangible manner where they are distributing content in an illegal manner.

    It is also true that DRM potentially inhibits the ‘fair use' exceptions provided for in most copyright legislation around the world: not all copying is unauthorised but it is unlikely that software can distinguish between fair use and illegal copying.

    Another good example of the disadvantages of DRM technology is with respect to compatibility: often when consumers change their hardware, such as a laptop or MP3 player, their DRM-encoded content, purchased in good faith may not work on the new device.

    Old DRM software may not be recognised by newer hardware and vice versa, meaning that the majority of consumers will have been misled as to what the purchase transaction involved initially: no one anticipates that the MP3 tracks or DVD is meant to only be usable for a few months.

    At this point, it should be highlighted that it is a rather common, yet fallacious, argument that the consumer has traditionally paid for the record, cassette or CD and has enjoyed the liberty of being able to sell or give them away at their discretion.

    Now, DRM prevents the consumer from being able to sell their own property when they no longer have use for it. In fact, the sale of the music on a record or cassette has always been a licence, not an assignment, of specific rights to the buyer, a permission to use within restrictions, in particular copying and public performance.

    Most DVDs are not allowed to be played in schools or on oil rigs, for example, and in order to play CDs in most countries, a licence from the rights owner or a copyright collecting society is required.

    So, it could be argued that it is not the consumer's status that has been affected but rather, the enforcement. When music was played in a school disco, the terms of the licence of the music were broken, but the record companies did not intervene.

    Times are very different now and record companies in particular are gasping for air. The golden era of recording artists and innovation in music has passed, the rising quality of affordable home recording technology, online distribution and marketing for artists and of course piracy mean that record companies' revenue streams are drying up. So: are there solutions?

    One answer is more practical than legal in nature: to monetise peer-to-peer (P2P) software and hubs. If bit torrent sites can generate huge advertising revenues operating in contravention of the law, these revenues would become much bigger if the music industry supported such sites and received royalties accordingly. Similarly, someone is making even bigger sums of money from online piracy and downloading: the ISPs.

    There is no reason why ISPs hosting P2P networks should not be required to pay royalties based on bandwidth usage and jurisdictions that do not enforce such rules be geoblocked from the major music and film markets of Europe and North America.

    The content-creation industry and the telecommunications industry are converging: perhaps this co-operation is the only viable way forward, giving the market the greatest choice at the lowest cost but preserving revenue streams at the same time.

    This is all very well, but these are long-term solutions to an acute problem that is damaging the creative industries right now.

    Whilst DRM has its detractors and may need refinement in its reliability, it is a very small restriction on the civil liberties of consumers and provides an immediate response to the massive revenue haemorrhaging of recent years.

    It is, however, a short-term solution, a band-aid that reduces the problem by restricting consumers' natural behaviour, effectively trying to modify market demand.

    A more realistic solution is to give the market what it wants and to tap into the revenue streams the evolved business model creates.

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