Digital Rights Management

Comments on the BSG DRM Report

The BRM recently publised a report on DRM. Unfortunately, this report passes over the most importing thing: offering services that customers are willing to pay for. I don't see any problem with people paying for on-line music or other materials under copyright, as long as the price is right, some confidence exists in the usability and longevity of the goods and services bought. Trying to maintain price levels of a pre- digital age where limited technology was a highly effective "DRM" system, is in effect, trying to undo the effects of innovation, or trying to reap all benefits of the innovation without giving them back to a customer. I thing which would not be possible in a free market, where prices, through the mechanisms of competition, tend to develop into the direction of the costing price.

Let a free market decide on who reaps the benefits of the immensely reduced media and distribution costs

  • not a market dominated by monopolies and kartels. This will probably mean that prices will drop until a new equilibrium is achieved, in which artists and authors can still achieve a healthy income, albeit with a potentially much larger audience. Don't try to block such developments with legislation aimed at maintaining a status quo developed in an era where media costs were many orders of a magnitude higher.

Given current technology, people can own a much larger part of cultural heritage for the same price as they paid for the much smaller fraction they had before, and as a whole still spend the same amount, or more, on cultural products, in effect giving a growth boost to industry, if dealt with in a clever way. The industry clearly lacks creative thinking

  • a disgrace for an industry that is supposed to earn its money from creativity. Access to Cultural Heritage is a recognized human right, and the industry here seems to conspire to deny us that right.

In this respect, I would also like to point at the latest craze in Asia, the so called "Magic Microphone", a microphone shaped device, serving as microphone, but in which up to 10,000 songs are stored (as midi) with accompanying text and a video generator, to be connected to a TV for the highly popular Karaoke parties. The cost in the order of 150-300 Euros. This boils down to a selling price of 3 cents per song. Why isn't a similar product possible here?

From a traditionally liberal political point of view, copyright itself is a distortion of a free market, and is only acceptable because it fixes a market failure caused by so called "free riders". It should do that in an as limited possible way, just enough to fix the problem.

Just a quick reply to some of the recommendations. (The recommendations are aimed at the UK market, I reply in a wider context, and ignore the specific UK issues)

  1. DRM tools and systems should be regarded as falling squarely within the inventory of online security measures.

Bad idea from consumer point of view. Trying to do this muddies the water of two distinct aims, namely, online security is consumers against fraud on the internet, DRM is intended to restrict consumers in what they can do with materials they have bought. The first is positively received, the second normally highly irritates even well- willing honest consumers. Muddying these two aspects might reduce the acceptance of measures to achieve online security.

  1. Government should urgently consider the formulation and adoption of “effective measures for enforcing intellectual property rights”, in line with the requirements of the TRIPS Agreement, to deal with online piracy.

First of all, the term intellectual property rights should be replaced here with a legally defined term. Probably copyright is meant. Technical measures to restrict the use of works should be left to the market. There is no need for a government prescribing certain restrictive DRM measures or forbidding them. However, if any legal support is considered necessary for such schemes, it should not disturb the traditional balance between consumers (public) and authors rights. Any legal measures should thus only extend legal status to DRM schemes in as far as they maintain restrictions granted by copyright legislation, and no further. The public should continue to be able to exercise its rights. This includes traditionally important rights as those to copies for private study and use in Europe outside the UK, and simply the right to play a song when you like to at home. DRM should not be used as a lever to wrinch out more restrictions on the consumer side of the copyright deal, and thus distort the balance between producers and consumers.

  1. The UK content industries should jointly commission a study into the application of the emerging rights data dictionaries and rights expression languages to the licensing and management of copyright materials.

Fine, but don't try to enforce it (via legislation, monopolistic structures, or kartel like deals, such as exists in current "rights societies") to parties who wish to follow a more consumer friendly business model.

  1. Government should actively promote the development and promulgation of global DRM-related standards.

Not needed. The industry has no lack of funds and is well capable to develop such standards if there is a market for them. In principle, the companies who stand to gain from these developments should pay for them, and no government intervention or subsidy from public resources is needed. If the market fails to achieve DRM standards, their is probably no market value in such a standard, and thus no tax payer money should be wasted on this.

  1. Government should commission an in-depth study into the area of electronic payment and billing systems.

Again, given the current state of flux of developing standards and technologies. Standardizing at this point probably means that an immature technology will be mandated, which will hinder, rather than promote progress of the economy. It is better if the government will provide a free arena, where any such technology has a change to develop, and let the market decide.

  1. The UK content industries and public sector beneficiaries of copyright exceptions (such as libraries and education) should work together to create frameworks for use of content, employing DRM systems to enforce the agreed scope and terms of use.

Don't forget the general public (consumers) here. Copyright didn't restrict what you could with copyrighted works in the privacy of you home. DRM does, and thus IS A HUGE CHANGE IN THE IMPACT COPYRIGHT HAS ON CONSUMERS.

  1. The UK content industries should take the lead in addressing relevant consumer confidence-building measures through establishing codes of practice.

DRM is ALL ABOUT LACK OF CONFIDENCE. The best confidence-building measure is to have confidence in your business partner (read consumer) yourself. If you can't achieve that, it is illogical to conclude that a code of practice can help in any way

  • the copyright act is more than a code of practice, it is a law, and apparently it is not enough for the industry. To obtain customer confidence, equally binding measures should be in place to protect the consumers' rights.
  1. The Government should implement a number of pilot public service broadband offerings, deploying DRM applications and e-payment systems.

Again, no need to spend tax-payer money on services private enterprise can provide given a viable market. Urging for such a thing seems to indicate that no such viable market exists.

  1. The BSG should bring together the various stakeholders in the digital value chain to explore new business models.

The most important stakeholder, the customer, the one providing the money, and thus the lifeline for the entire industry, is often left out of such discussions. They should have a clear voice in this issue. If a free market is available, without monopolistic abuse or government intervention, his voice will be heard through his purchase decisions. Given the fact that the customer is often left out from such forums, and monopolisitic or cartel type tendencies in the industry are strong, it is clear the industry doesn't want to listen to the customer.

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