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

"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.

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