30 May 2013 by Published in: rants 1 comment

Of course, we all know that DRM is broken and bad.  But until very recently, I’ve been persuaded by sort of an economic argument.  I’ll let cynicalkane explain it to you:

The market problem is that people want to consume expensive art. There is billions of dollars of interest in making this market clear. The market will not go away because a bunch of hackers find it unethical. As the war on drugs has demonstrated, the market interprets censorship as damage, and routes around it.
I see a lot of opposition to DRM on principle. These principles will go nowhere. The interesting question to me is whether DRM is part of an standard s.t. required permissions are visible and minimizable and the platform is open, opt-in and extensible… or whether it will take over your devices with God-knows-what secret solutions, which is the situation today. I think the W3C standard is problematic (having read it) but represents a small step in the direction that is less wrong. The third option, an imaginary free-information utopia, is directly against the economic will of the people in general.

tl;dr: People want content, producers want DRM, ergo, DRM will be used by people to receive content.  Thus the question is whether people use DRM with HTML5, or whether they use DRM with some other proprietary platform that rivals and potentially dominates it.  Work with the media companies or work against them.

This is sort of convincing because people’s brains throw an exception well before you get to a billion of anything.  So when you say “There is billions of dollars of interest” in DRMed content, it all sounds very formidable.  But let’s put it in a frame of reference so the lizard brain can get a sense of it:

Screen Shot 2013-05-30 at 2.50.28 AM

 

In reality, there is a far larger market for the Internet to exist than for the media industry to exist.  (By the way, this is also true by revenue and net profit if you prefer those numbers).  So if you force people to pick between one and the other, they will pick the Internet.

Of course you may say that the Internet companies rely on Big Media to attract people to their devices/services.  This is certainly true.  But it is much more correct to say that Big Media relies on the Internet companies for distribution.  Market caps are essentially Wall Street’s assessment of the power imbalance between these companies, and the narrative that the Internet companies are the dependent ones is at total variance with the market’s assessment.

A micro example may be illustrative.  Obviously, there is a significant demand for pirated software.  Mom & Pop software shops are reporting piracy rates around 90% on the PC.  But on the iPhone, only 5% of customers even have the ability to pirate any software.  (Piracy rates on iOS remain high, but since it affects at most 5% of customers, it doesn’t represent a meaningful number of lost sales.)  It is a difficult and troublesome operation, requiring you to always watch your back when updating anything.  As a result this high demand for pirated iPhone software mostly just goes unserved and people buy things instead.

Another micro example may be illustrative.  Flash just plain doesn’t work on mobile.  There was, and to some extent still is, a huge demand for flash to work on mobile.  But the demand just goes unserved.  I know when I run into flash content on my iPad, my reaction 9 times out of 10 is not to find a desktop computer to watch the content, but just to move on to something else.

There is a significant demand for people to consume DRMed content over the web.  But just because there is significant demand for something does not mean that the demand will inevitably be met.  The W3C companies are holding all the cards here. If the DRM proposal doesn’t pass the W3C then it will probably never make it into FireFox, Chrome, or Safari (including MobileSafari).  Remember, the loss of just one of those browsers essentially killed all new Flash development.

Although I think a lot of this whole argument is missing what is really going on here.  If you study the spec in question, it’s designed by Netflix, Google, and Microsoft.  All three of whom have a rather strained relationship with Apple.  Which, you may recall, has something of a side business of running one of the largest entertainment marketplaces in the world.  So I’m pretty sure this whole thing is less of a Tech vs Media thing, and more of a proxy war fought between competing tech firms.  These companies are probably legitimately scared that the only way to get DRMed content onto an iOS device is with Apple’s blessing one way or another.  This DRM standard thing could power a cross-platform iTunes competitor which at least on paper could unseat the king from the throne.  I think perhaps the real choice here is about whether or not you want a viable competitor to iTunes.

Paradoxically, if this interoperable DRM proposal ever grew legs–I fully expect Apple to mysteriously drop video DRM from the iTunes store.  This is essentially how DRM disappeared from the music store in 2007-2009: as a way to differentiate in an increasingly competitive landscape.  A vote for web DRM might directly cause less DRM on iOS.

But that’s not a good enough reason to do it, I don’t think.  There are a lot of unintended consequences with shipping DRM in a web browser–imagine if YouTube users started doing it as easily as they disable embeds.  And I think the web browsers will certainly not be seriously impacted without it, even if there is a great big fuss like the great big fusses about lack of unsigned apps on the iPhone and Flash support.  The myth is that if people want something badly that they often get it, but the reality is that very often people just make do without.

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Comments

  1. Wed 10th Jul 2013 at 10:19 am

    Why DRM?
    DRM won’t solve the publishers pain.
    that is, Piracy!
    First, one cannot pretend DRM provides comprehensive end-2-end encryption. One end being a data source and the other some physical reproduction device (e.g. moitor, sound card etc.)
    What stops me from reading a memory of already decoded DRM frame?
    What stops me from tapping on VGA signal?
    Most people don’t realize, but even for computers most devices are still analog! once ANANALOG, it is in the wild :)
    So any tech-savvy user will be able to reproduce DRMfree movies from DRM ones, easily without being traced. For one thing, it might prove pirates life much easier, instead of cam-cording in a cinema one might as well cam record its 42″ screen in one’s living room.

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