Why DRM Is Evil

We at TechWatch have never been fans of Digital Rights Management (DRM). This is one of the reasons why we cheered for Diamond when they released their Rio PMP300, the second mp3 player in the North American market (the first was Eiger Labs MPMan F10). With 32 mbs of memory, it could hold about 12 songs and could run 10-12 hours off of a single AA battery. What differentiated the mp3 format from other would be usurpers of the CD market is that there were no propriety methods that prevented music to be copied from one device to another (i.e. DRM).

We weren't the only ones to notice this. In the 10 years since the first mp3 player was released, the mp3 format has become wildly popular, enjoying a massive growth in the early millennium, thanks to Napster. The record companies were resistant to digital distribution of their music, instead trying to force consumers to be tied to the CD. To this end, instead of developing new revenue streams through legitimate online distribution channels, they sought to stop the illegal ones they found on the Internet.

It wasn't until Apple released their first iPod, on 23 October, 2001, and opened up the iTunes music store a year and a half later (28 April, 2003) that the music companies saw that there really was a market for digital downloads of their music. But even the iPod and iTunes had one over-arching weakness, the FairPlay system (Apple's DRM). To be fair to Apple, they wanted to release the music without DRM, but the music studios would have never done business with them had that been the case.

Once everyone had their eyes opened, they tried to figure out how to make a working business model out of selling music online. The problem was that all of their attempts failed due to the insistence of DRM. It was the customers who got burned when these business ventures fail. Microsoft is shuttering it's music store at the end of this month, but promises to keep their DRM servers (without which the purchased music would become unplayable) running for an indefinite period of time. Worse yet, Yahoo is shuttering their DRM servers at the end of this month, leaving all their customers with loads of files that are no longer good. Sure, Yahoo is offering people coupons to get their music in mp3 format (without DRM) from their partner RealNetworks. But surely, this is a hassle to get something that they should have gotten from the very beginning.

And let's not even start on the whole Sony escapade that introduced the term 'rootkit' into every music lover's vocabulary. This is why we applauded Amazon when they were able to cut deals with the four major music studios (Universal and EMI in September 2007, Warner Bros in December 2007 and Sony BMG in January 2008) to sell unprotected mp3 files from their music store, the first ever time that this happened. Sure, this is only available in the United States, but this is due to change this year as Amazon rolls out their music store internationally.

All in all, we think music companies should start assuming that most of their customers are honest, instead of the other way around. What kind of business model succeeds where the basic assumption towards their customers is "we know you're going to try to steal from us at every possible opportunity, so we're going to severely limit what you can do with the products you buy from us."

We leave you with this. It's a video produced by Microsoft on what the original iPod packaging would look like if it was designed by Microsoft.