DRM Makes Minimal Impact

Despite the highly publicized efforts of copyright holders to fight the piracy of their digital content, implementation of digital rights management (DRM) [define] solutions has been held up by outstanding issues of contention between those content developers and distributions and IT vendors, an In-Stat/MDR study said.

The findings by high-tech market research firm In-Stat/MDR will likely give further credence to “fair use” advocates like the Electronic Frontier Foundation (EFF), which has long argued that content developers and providers need to abandon DRM-based solutions in favor of an entirely new business models that allow, say, movie studios to still charge its audience but not inhibit the consumers’ ability to make copies of some types of copyrighted content for their own personal use.

“I hope the marketplace will reject DRM solutions. DRM doesn’t stop piracy or file-sharing. DRM is really a hopeless solution,” said Fred Von Lohmann, senior staff attorney at EFF, during a recently conducted telephone interview.

But according to the In-Stat/MDR report, attitudes within the entertainment industry are changing, which has led to a few small-scale, inter-industry implementations of technology-based DRM solutions. In fact, within the next few months, In-Stat/MDR anticipates announcements from both the movie studios and recording industries that will “herald” new online services that offer expanded “Pay-per-View” and “Pay-per-Listen” services.

“Unfortunately, most of these services will be virtually ignored by consumers who are used to accessing and downloading their digital content for free,” said Mike Paxton, a senior analyst with In-Stat/MDR.

The analyst who wrote the report wasn’t immediately available to expand on the details.

To be sure, the study comes out amid a growing acceptance for online subscription services that now empower the users while still rewarding the copyright holders. Apple Computer took steps to block file-sharing of its iTunes music service.

Aiding to the confusion, though, is the stance by other IT vendors in the U.S. to fight any further government regulations that would increase their cost base, the study concluded. In parts of Europe, governments have tried levying duties on everything from blank video tapes to personal computers to collect money that would help subsidize content developers. But, the technology industry insists on a market-driven solution, not one that is government-imposed.

And while Microsoft RealNetworks and Macrovision have come up with their own solutions, there is still no clear-cut consensus governing the digital streaming media realm that would accelerate deployment.

The study also found:

  1. The actual dollar amounts lost to digital piracy remain hard to determine. For instance, estimates of the U.S. motion picture industry’s losses to piracy in 2002 range from $1.3 billion to almost $4 billion.
  2. Consumer apathy is abundant. Most consumers seem to believe that DRM issues do not directly affect their lives or finances.
  3. In the U.S., the Digital Millennium Copyright Act (DMCA) has done little to help define “fair use” guidelines.

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