Pirates: 1, Buyers: 0

Digital Rights Management: Even High Tech Locks Won’t Get People to Pay

As online music piracy grows, the technology pushed by record labels to suppress it is losing ground, as most of the harm is falling on legitimate consumers.

The apparent ineffectiveness of Digital Rights Management, or DRM, and the financial harm to online music stores and record labels, has made its inventors reconsider the use of the technology, according to a critical article published on Feb. 6 by Steven Jobs, of Apple Inc.

But Jobs is only the latest in a string of critics of DRM. Some of the loudest critics have been the copyright-holders themselves – record companies, book publishers, film producers, and software companies. Yahoo music store made DRM-free songs available in cooperation with EMI almost a year ago, and the latter is in talks with online music stores about selling all of its music without copy protection.

DRM uses encryption to protect the content from being copied or played, and an authentication system, which ensures only authorized users get access to the files. However, it can also be used to specify which applications or devices can open and play the files. In Apple’s iTunes case, only iPod’s can play songs purchased in the online musicstore. However in the end, the technology didn’t make consumers or Steve Jobs really happy.

DRM-free music, by contrast, can be played on any device or application, and can also be copied without any restrictions.

Advocates of DRM argue that it protects copyrighted material from being illegally copied and distributed, while critics say DRM goes much further, harming the average consumer and doing nothing to stop piracy.

“Music industry rhetoric about DRM often focuses on P2P [Peer-to-Peer sharing], and some in the industry probably still think that DRM can stop P2P sharing. We believe that industry decision makers know otherwise,” say J. Alex Halderman and Edward W. Felten, of the Center for Information Technology Policy, at Princeton University, in a case study of Sony’s DRM protection.

“The record label’s goal must therefore be to retard disc-to-disc copying and other local copying and use of the music. Stopping local copying might increase sales of the music,” they argue.

While industry concerns over the illegal availability of copyrighted material, primarily on the Internet are somewhat understandable, DRM seems to have done little, if anything, about it.

Repeated attempts to impair illegal file-sharing online have failed, mainly due to the lack of accountability on the Internet and innovative “pirates.” Furthermore, some researchers have disputed the music industry’s claim of causality between file-sharing and declining music sales.

The legal enforcement of DRM comes from the adoption of the World Intellectual Property Organization Copyright Treaty (WIPO Copyright Treaty), as the Digital Millennium Copyright Act (DMCA) in the U.S., and its European counterpart, the EU Copyright Directive (EUCD).

The key weapon aimed at fighting piracy, in both the DMCA and EUCD, is the anti-circumvention provision, which suggests that it is illegal to develop and share software and hardware that break copying or anti-interoperability protection, of copyrighted material.

Critics have pointed to the anti-competitive implications of both legislations, the breaches of the consumers fair use rights, and the ineffectiveness in delivering its stipulated goals, not only with regard to DRM.

Piracy, it seems, still remains for the most part unaffected.

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