Tweet

In the DRM, CA Equation, Someone Has to Protect the Consumer

Written by: Andy Marken

Article Overview: DRM (Digital Rights Management) and CA (Conditional Access) are reshaping the way people think about their audio and video entertainment. In many instances the restrictive nature of the two have turned ordinary people into pirates unless the abide by the restrictions. In some carefully thought out instances, the technologies may present new opportunities for entrepreneurs.

In the DRM, CA Equation, Someone Has to Protect the Consumer

“The terminator is out there. It can’t be bargained with. It can’t be reasoned with. It doesn’t feel pity, or remorse, or fear.” – Klye Reese (Michael Biehn) – The Terminator (1984)


For thousands of years people looked the other way as folks made copies of other people’s work – by hand, by printing press, by copier, by disc.

Content producers weren’t happy but the U.S. Supreme Court determined there was such a thing as fair use – making a backup copy of content for yourself. That was loosely interpreted to mean you could make a backup copy of your videotape. You could make a copy of an audio tape to CD so you could play on your personal player, in the car, or ….

The Internet blossomed and creators found there was a cheap, fast, ultra-profitable means of making, producing and selling their stuff and make a lot of money.

Technology was working for them.

But…the Internet had two users – them and you!

(Photo 1)

Stuck in the middle were the delivery folks – hardware, software producers; delivery services -- who also saw a few bucks were possible.

But don’t forget the RIAA and MPAA, the people with the lucrative copyrights.

The manacles seemed like a good thing at the start so the go-betweens complied. After all, there is a lot of traction to the idea of protecting intellectual property (IP) from being stolen.

They have spun a very enticing, very convincing story…content everywhere (Figure 1).

Where you want it…when you want it…how you want it…the way they want to deliver it!

It was a beautiful new world but as Kyle said…”One possible future. From your point of view – I don’t know tech stuff.”

Who knows even less about tech stuff? The Supreme Court…

The RIAA, MPAA found receptive ears so they encouraged the development of terminators that would seek out and destroy illegal content access. The ultra creative PC/CE HW/SW industry went along and developed proprietary formats…encryption codes…special hardware…special rules you should live by.

Fed by the paranoia that everyone is stealing the content the courts chipped away at the old fair use rule. They created a brave new world.

It isn’t a world our kid agrees with (and he’s no John Connor).

He figures if he buys the content once he should own it. He should be able to move it around from his MP3 player to his cellphone to his notebook PC to the home entertainment center to the car. Anywhere…everywhere…anytime. And he should be able to give a copy to his sister if he wants.

And there are millions – if not billions – of John Connors who have the same belief.

Fair price…fair use.

To hell with the terminators!

Since it all seems to start with music, let’s start here first:
- fixed media music $33 B in ’05, 5% growth (iSuppli)
- broadband music $1 B in ’05, 100%+ growth
- mobile $5.3 billion in ’05, 30%+ growth
- CEA (Consumer Electronics Association) found that 32% of the early adopters downloaded while 68% bought the disc
- iTunes has their shielded music service, Microsoft has theirs, Real has theirs
- Verizon has theirs, Sprint has theirs, Singular has theirs…

Kids who have grown up with computers and the Internet are more digitally-wise than their parents and grandparents to make the security rules, hardware, software. They know how to skirt the heavy-handed encryption.

And they do with blackboxes and little cracker programs.

Sometimes the results are crude. Then they get better. Suddenly it’s great.

They beat another terminator.

They pass the weapon along.

Sometimes the solution falls into the hands of a really bad person who wants to make money illegally. But if the RIAA isn’t concerned with collateral damage why should the kids worry?

The MPAA saw what happened to the RIAA and they knew they wanted a new, improved terminator. The CSS model didn’t last long so they kept demanding newer models.

After all their stuff is special and really great. Everyone wants to copy it and send it around the globe on the Inet!

While 93% of the U.S. internet users know about online video (Online Publishers Association – OPA) only 24% watch once a week and 5% daily. The CEA found that while 30% of the early adopters download video, 70% buy discs.

When it comes to online video users, Ipsos found that 41 million grabbed streaming music videos, 32 million chose video games, 20 million enjoyed movie trailers (not a bad thing is it MPAA?) and 11 million went for TV shows.

This year the Leichtman Research Group estimates about 4% of the U.S. TV viewing will be video on demand (VOD). By 2010 the WW VOD – all sources TV, movies, video clips, curiosity sites – market will be a whopping 60 million subscribers and be worth $12.5 billion (Figure 2).

The result means that by 2010 people will have over 2 TB of home data (Figure 3) they will be storing – audio…video…photos…content!

If we were the RIAA, MPAA we’d be demanding more protection too!

That’s all their stuff right?

NO!

Most of the content we have on our system at home (Figure 4) is ours – yours, mine – or free stuff or stuff the RIAA, MPAA encourage you to grab (to sell you more stuff).

In fact, Parks Associates found that the content we have on our HDs is mostly ours anyway:
- 84% of the respondents said they had digital photos on their drive
- 59% had music
- 36% had video clips
- 26% had personal videos
- 17% had movies, TV shows

People aren’t constantly surfing the net to steal the MPAA’s IP (Figure 5). We email. We IM. We text message. We read. We play games.

Despite what the RIAA and MPAA tells the courts, they know it too!

They should they’ve got the research that tells they what you do, when you do it, where you do it.

It’s pretty scary that we volunteer so much information, so willingly (Figure 6). But then we have nothing to hide.

Can we say the same for the people who push for the development of the terminators? Have you ever seen how much the real music creator gets from the sale of a song on a disc? Have you ever studied the creative accounting by MPAA members?

Kids are slackers compared to these folks.

But that doesn’t mean content creators don’t have rights to payment for their IP. It just has to be fair to the owner and fair to the consumer.

The transportation and delivery folks? Sure. They should be compensated for their service…once!

The challenge is that today content – yours, mine, ours, theirs – delivery is complex. It used to be there were distinct channels.

There was video (broadcast, theater, disc). There was the Internet. There was voice (Telco) service. There was mobile phone service.

Today multiplatform, interactive services and content can move across multiple devices and be accessed in multiple ways.

Ownership, usage access, enjoyment has to move just as easily.

That is going to be tough to achieve because:
• content owners/providers
o want to minimize piracy
o want to maximize the number of ways they get paid
• hardware, software, service providers
o want to control distribution (and cash flow)
o want to leverage their business models
o want to leverage (hold) customer to minimize churn

In the meantime both sides (all parties) want to limit DRM interoperability, establish their own content rules, reduce or eliminate the consumer’s ability to move from platform to platform and optimize their “ownership” of the customer (Figure 7).

While that may sound like an extremely pessimistic forecast, the fact is the consumer (especially the younger, creative generation) will force reason on all parties.

Tellywood will have to focus on eliminating the true pirates and come to a self-agreement that in talking about content consumers have listened to Kyle…“You must be stronger than you imagine you can be. You must survive, or I will never exist.”

(photo 2)
If they don’t listen the consumer will simply repeat what Arnold said…“I’ll be back.”

Each time with a bigger, badder terminator eliminator. It’s a battle creators and providers can’t win!

#######
Illustrations available -- andy@markencom.com

Related Articles
  The Problem With Your Web Site
  Making Your Own Math Quiz Is So Easy
  Amendments to Small Business Protections under the Trade Practices Act
  A Look at Incentive and Rebates Programs
  Be a Change Management Rocket Scientist

Article Tags:



Related Forum Posts
Re: Avon/ Amway - Consumer spending behaviour dictates that during down times, consumers will be MORE apt to spending on personal hygeine and personal therapeutic items. This is why you see companies like Avon, Mary Kay, etc advertising more and finding new sales associates. Not everyone will have a job, but most people have friends to sell things too!
Re: HOw to market a B2B consulting company - [quote="zohahunt77":428owzbi]Hi, I was wondering if anyone can tell me the difference between B2B and B2C. I don’t know about b2b marketing but I have done marketing so know things about it. I will suggest you to take online services which will spread your business all over web network. Online marketing is the best way to market any business.[/quote:428owzbi] B2B = Business to Business - You are marketing to other businesses. B2C = Business to Consumer - You are marketing to consumers.
What the Better Business Bureau does - [quote:1urk8etq]There is such a diversity of businesses out there, how effetive are they in protecting the consumers or entrepreneurs[/quote:1urk8etq] The way I understad it, at least here in the US, every BBB chapterhas a website, and on that website is a list of companies who have had complaints about them. People trying to decide if they want to use a company check that list...and if there's no complaints.... That's why it's imperative for people who have been ripped off to complain to their BBB. It might not help them, but it will help other people down the line. On the other hand, people do sometimes maliciously make complaints about businesses - so I tink the BBB does talk to both sides to see what's what... In addition to the BBB, each state has its own Consumer Protection Agency, and they also inspect claims of wrongdoing.
Re: What makes a good online review? - Hi Kevin, True that the net is inundated with information, but there are flaws too, like you are not always sure as to whether the information provided is authentic or not. Therefore many organizations have set standards maybe of their own or laid down by Authorities. But for the common man, there is always a chance of falling in the trap. When I search for some product on the internet, there are two options for me (and I believe for most of us). When we are into purchase of a product, we are mostly after a specific brand. In such a case, any review does not matter. But for the other products (when Brand Name isn't that important), I generally take into account the reviews. I consider both - Expert Reviews and Consumer reviews. But many a times, they don't publish negative comments of products. So I do a search on Google or other search engines for related content to know more about the product and generally prefer to read Forums, Online Communities and Blogs (in that order) to decide on the purchase. Regards,
Re: What the Better Business Bureau does - [quote="OmnivoreInk":25i6g5su][quote:25i6g5su]There is such a diversity of businesses out there, how effetive are they in protecting the consumers or entrepreneurs[/quote:25i6g5su] The way I understad it, at least here in the US, every BBB chapterhas a website, and on that website is a list of companies who have had complaints about them. People trying to decide if they want to use a company check that list...and if there's no complaints.... That's why it's imperative for people who have been ripped off to complain to their BBB. It might not help them, but it will help other people down the line. On the other hand, people do sometimes maliciously make complaints about businesses - so I tink the BBB does talk to both sides to see what's what... In addition to the BBB, each state has its own Consumer Protection Agency, and they also inspect claims of wrongdoing.[/quote:25i6g5su] While I was managing a home improvement business, we joined the BBB. They got our file entered in the computer wrong and ended up posting 3 major complaints against us. They were actually for a different company that wasn't related and that wasn't even similar in any way. That caused me a mountain of problems and cost us several big dollar jobs. Eventually they bothered to speak with us - it took about 4 months to fix the problem. That was 4 months after I found out about it. They didn't offer a refund for the months that we had a negative rating, only fixed the problem after I spent many hours pushing them to fix it and they had the nerve to push me to renew my membership. Needless to say, I haven't joined the BBB again. And, they charged me decent money to be a member. Shri


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

The OLD Way of Advertising, May Not be so OLD

The Neglected Art of Receiving

Life is a Balancing Act!

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.