Tuesday, June 22, 2004


To sleep, perchance to DRM

Yesterday's missive about the RIAA and copy protection in general got me to thinking about actually where it could be useful, and also the good guys in the IT industry who actually trust their customers, thereby gaining market share. A specific example of a good guy is Oracle (yes, Oracle!). Why? The Oracle Technology Network lets you download fully functional copies of every single product, not time-bombed or otherwise crippled, and lets technologists play with them. It's a win-win situation all the way around - companies get to check out the entire product suite on their own time with minimal hassle from sales droids, Oracle gets feedback from the user community on their likes, dislikes and usability, and overall, a generally favorable impression is left that will make folks more likely to consider Oracle. Sybase and IBM are doing similar things with their respective industrial-strength RDBMSs, although it's a bit harder to track down the appropriate sites than with Oracle. It's a cool way to take a test drive, and a relatively intelligent deployment plan can be worked out along the road, ultimately enabling shorter time to market.

The user community has had some tangible benefits as well, in that installing Oracle on Linux was a bit hard (Oracle has opted for a Java-based installer to alleviate cross-platform concerns), but by getting Oracle's Linux implementations out there to the wider community, people have been able to decipher where the issues are and post them out to user groups and the like. While it's still a non-trivial exercise to get Oracle running, the combination of an open-minded company and an active user community is always a good thing. Contrast this with the boys from Redmond, who do give out freebies, but they're timebombed. It's not an unreasonable period for an evaluation (120 days), but they don't make the migration path to a fully licensed product clear, making it harder to take your successes to production. In MSFT's case, at least from a corporate standpoint, it's probably better to buy an MSDN subscription, where you get all their goodies, fully licensed (albeit with user count restrictions) for one relatively low price annually.

Conversely, where could copy protection or more precisely Digital Rights Management be userful? Certain financial transactions, for example, such as swaps with multiple counterparties, might be an area where you might want certain parties to see certain parts of the documents, but not necessarily the whole thing, and in any sort of transaction where you would need a paper trail of who saw what when. The problem with this scenario, as always, is systems integration, and making it work seamlessly with quote unquote standard tools (e.g. MS Office). The problem of course here is that with documents such as this that need to be transmitted between enterprises, how does the DRM system phone home? The obvious answer is through web services, however, the problem of an unintentionally, or intentionally disrupted Internet connection arises. Most DRM systems allow a certain number of unaudited or unpermissioned content views (although the content provider can change the number of allowed uses when encrypting and preparing the content for release) before locking out the content, but in the case of a sensitive document, even one unaudited view may be too many.

The case of entertainment content is of course an entirely different matter since (according to Senators Hollings (D-Disney) and Hatch (R-Disney) some kid downloading the latest pop nonsense is a national security threat). Without adding a redundant call for CD prices to come down, the RIAA members have to realize that they've been giving short weight for quite some time now (and let's face it, the business model that Dick Clark and Don Kirshner had in the late 50's and early 60's is still working today for these clods, so why fix it?), and without giving perceived value, their sales are still going to fall. What value is being added, especially to the back catalog, to justify these prices? People will pay for added value on back catalog items, just look at what audiophiles will pay for half-speed mastered vinyl, or the success of "Let It Be Naked".

And just to add insult to injury, I checked out the cost of duplicating CDs in standard jewel cases with a 4-panel color insert from a major disk duplicator used by many independent artists. The cost per disk in quantity ten thousand was $0.79. If you look at ASCAP's royalties example on their website, the royalty basis for a CD is the list price minus a four dollar plus "packaging fee". Presumably the captive pressing plants of the RIAA members can provide a lower unit cost, but it seems like someone's making about 300% right there.


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