FTC Town Hall] Digital Rights Management FTC Town Hall – Panel 5 – The Future of DRM

Thierry Rayna, London Metropolitan University (on video, sitting in front of a very nice wall of vintage electric guitars).

There will never be a technology that will eliminate piracy, which is a problem of behavior, not technology. Human behavior is influenced by economic incentives. DRM would work if benefits outweigh costs, but DRM doesn’t bring any benefits to consumers, but appear as destructive. People don’t pirate iPhone apps because they’re cheap. That speaks to what I’ve always thought, that there’s a non-zero price point at which it’s more convenient to get content the right way than the wrong way, and that digital technology has driven that price point way down.

Thierry is in favor of a DRM system that only allows a single user to use a copy at a time. Fighting piracy is mostly a matter of finding new ways of doing business.

George Ou – Information Technology and Innovation Foundation

Content providers need the rights and abilities to lease content with conditions, including the ability to disable content. This gives consumers lower prices and wider variety. It strikes me that the whole day’s discussion is based on the underlying assumption that the majority of consumers wants to do bad things with content.

Christopher Levy – CEO of BuyDRM

Three different types of DRM – application DRM, online DRM, physical DRM.

Technological Developments – Silverlight DRM from Microsoft. Support for PCs, Macs and soon, Linux. Support for FMPG4, H.264, AAC.

Adobe is working on Flash DRM improvements.

What’s new is old: download to own; pay=per-view; subscription.
Ubiquity – run content across Xbox live, iTunes, Sony
Ad supported models.

Jan Samzelius – ByteShield Inc

Price point on games is much higher than audio and video, so incentive to pirate is much higher, and the pirates always win. The publishers have been trying to use harder DRM solutions, which makes it increasingly user unfriendly, increasing the incentive to pirate. Have lots of examples of consumers who buy a legal version and then go download the pirated version. DRM stems very little of the piracy. For every legal copy there are ten illegal ones – how many of those ten would actually turn into revenue?

Why has DRM been so ineffective? How could we improve the benefit side and reduce the cost side? It’s clear that free trials should be available for games – does it work on their machine? Do they like it? No non-standard devices, no registry modifications, should be able to store on as many machines as you want, make backups, drm should only run when the game is running. After six months or however long the product lifecycle is, the DRM should be removed so you don’t have orphanware issues. This can all be done if we get acceptance of two things – online activation, and some intermittent phoning home.

Bruce Benson, FTI Consulting

DRM exists to enable an owner to profit from his (sic) works. If that’s the case it’s failing miserably. Need to co-opt ISPs into helping. (ugh).

We should come out with a consumer bill of digital rights.

Unless I infringe, I shouldn’t see the DRM. DVD is a good example of that.

We have a problem because the pirate sites have much greater abundance than legal sites, due to difficult rights clearance issues.

But the real problem is interoperability. When does the market enforce interoperability without government intervention? It’s much more expensive to maintain proprietary DRM than an open one.

Jean-Henry Morin – University of Geneva

The consumer has been forgotten about by industry and the ecosystem. Where did User Experience go? WHere did Superdistribution go? Where are the new innovative Business Models, the Real-time Marketers, etc? Did DRM curb those? Wasn’t DRM supposed to be an enabler?

Assuming – DRM is likely to stay and be needed (managed content), and that absolute security is neither achievable nor desirable, and that given the right user experience and business model, most users would smoothly comply (e.g. iTunes). Most users aren’t criminals (finally someone says it!)

We need to take a step back and redesign DRM.

Paying attention to the central role of the User and User Experience, and a fundamental guiding principle to re-think and re-design DRM – Felten’s Copyright Balance principle – “a user wishing to make lawful use of copyrighted material should not be prevented from doing so by any DRM system.”

Exception Management in DRM – reverse the “distrust” assumption. Allow users to make Exception Claims and be granted “short Lived Licenses”. Credential based, revocable in case of abuse detection/monitoring. Acknowledging the need for Managed Content.

A comment from the audience about game DRM says that the honest customers are being screwed by the DRM in games, and they want the FTC to start policing those producers.