The valiant pioneers of selling content without DRM now have evidence that indicates they are losing around five sales for every product sold

It was only two years ago that I was told that publishing valuable digital content on the Internet would not take off for 10 years. Today it is happening all of the time with MP3 music files being swapped by our children and market research reports openly passed between business colleagues. Intellectual property owners have little control and more often than not do not get paid for use of their content.

Digital Rights Management (DRM) is an emergent technology that allows digital content to be published on the Internet whilst allowing publishers to maintain their copyright. Different approaches have been tried. Some feel that publishing on the Internet without copyright control is commercial suicide. Others say that it is just a case of giving away the content but making money on the advertising. Then there are those publishers who have pioneered online delivery without any copyright control. Today, most publishers in the advertising camp have found that advertising does not pay. The valiant pioneers of selling content without DRM now have evidence that indicates they are losing around five sales for every product sold. The time for DRM to be adopted is now. It is about enabling new products and services to be delivered online avoiding the overhead and delays of physical delivery. The commercial drivers for some form of DRM technology are clear.

All DRM technology is based on cryptography techniques. Files are encrypted, scrambling the contents making them unrecognisable. To access the original contents of the file you need a “key” which is a magic number used to reconstitute the original document. Conventional DRM technology adds a machine identity to the key, the software used to reconstitute the scrambled file will only do so if the machine identity on which it is running matches the identity provided with the key. Your key is stored on your machine along with the content so you can access it whenever you wish. If you copy the key and the content to another machine the identity no longer matches the key and the decryption will fail.

The solution is to separate rights information
from the encryption of content . . .

This highlights a number of issues with conventional DRM technology. If content is locked to a machine and it fails, is upgraded or stolen, then the content is lost. If a consumer wants to roam between machines to access legitimately purchased content they have to buy another copy. The overhead of personalising content at the time of purchase makes subscription access; access to archives and high throughput downloads impractical. In addition it ties the DRM technology to the DRM providers’ payment system. The solution to all of these issues is to separate rights information from the encryption of content, store rights information on the Internet rather than more volatile PCs using a check-in and check-out system to maintain copyright and provide disconnected access to content. This is all possible if you have structured the architecture of your system from day one around the availability of the Internet. Glossing over a mass of complexity there are now viable systems for managing rights to access digital content. The real area of interest is what happens when we try to map commercial requirements onto this platform?

A DRM solution needs to be independent of format as far as possible so that it can keep pace with emerging requirements. Boundaries between content providers created by conventional media formats are starting to break down. Print publishers want to add talking heads video from contributors, record labels want to integrate music videos with their music etc. DRM tied to a limited set of media formats will in the future inevitably leave its adopters unable to address new opportunities and trends and in an uncompetitive position. Interestingly this is not just an issue of format support, when licensing access to content different formats tend to need different types of rules and metering depending on accepted practices. For example, it is more conventional to rent video, subscribe to research and buy books and early adopters expect to replicate this in the digital world.

This leads to an interesting opportunity for DRM vendors to sell arms to both the government and guerrillas. For example, research information has been sold traditionally as a subscription service as the sale and fulfilment of conventional individual reports has been uneconomic for the publisher. This often leads to the subscriber getting more information than they actually want. The DRM vendor can now provide a technology that allows this service to be delivered faster and at less cost by the traditional publisher. However the DRM vendor can also provide the same technology configured differently to a new world publisher who wants to sell reports on a pay-per-play basis and carve out market share from traditional publishers.

This is also the cue for the lawyers to get involved as traditional publishing agreements did not conceive of the Internet. New business models often require new rights assignments to be negotiated with the copyright owners, this is both time consuming and expensive for publishers but the substance of these negotiations will be critical to the competitiveness of the publisher in coming years.

What is becoming apparent is that, publishers can and need to create new ways of packaging content to attract new readers and audiences. Content consumers will get greater choice and better value for money as the strength of actually paying for content gives the consumer a much stronger voice, after all, money talks.

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