DRM Becomes a Balancing Act

By Ed Sutherland

Companies walk a tightrope when it comes to protecting
copyrighted work with Digital Rights Management (DRM), according to a
new report. ”

Sony’s recent DRM fiasco highlighted the tightrope content
producers are currently walking,” according to Ben Macklin of eMarketer.

Getting DRM right is made even more important as more people turn to
the Internet for audio and video. By 2008, nearly half of U.S. broadband
subscribers (76.5 million people) will use online digital content,
according to eMarketer.

Just 31 percent of Internet users consumed
digital content in 2004. By 2010, 78 percent of U.S. households will
subscribe to broadband, according to Todd Chanko, an analyst with JupiterResearch. (JupiterResearch and internetnews.com are owned by Jupitermedia.)

Television remains the content king, attracting 1 billion households
worldwide.

“New channels for broadband are emerging, with approximately 30
million broadband users,” accessing online audio and video content each
week in the U.S. in order to share or record digital content, according
to Macklin.

“Content providers can either get a piece of the action, or risk
having their content avoided because of tight restrictions from DRM and
restrictive terms-of-service agreements,” according to the report
entitled “Digital Rights Management: Finding the Right Balance.”

“Used effectively, DRM technologies have the potential to open up
these new channels to traditional publishers and producers,” said Macklin.

In November Sony recalled nearly 50
CDs after consumers charged the music giant was using a form of DRM,
possibly opening computers to malware. “Aside from the rootkit, Sony was being generous allowing three copies to be made,” said Chanko.

What mistake did Sony make when implementing a DRM for CDs?

According to Chanko, it was a terrifyingly simple one. “They underestimated the fallout from the impact of their DRM on people’s PCs.”

He added that an unintended result from the Sony DRM episode may be greater
attention by consumers on individual recording companies. Previously,
consumers focused on the artist.