 Content Delivery  Influence of copy protection schemes on consumer behavior  If implemented inconsiderately, Digital Rights Management (DRM) has the potential of hurting the development of emerging delivery methods and media. E-books are particularly vulnerable to negative side effects of DRM since there is no established market and only weak demand. The big challenge for DRM is not to block illegal usage of copyrighted material, but to do so in a way which is acceptable to regular customers. |
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Recommendations:
Content providers need to look at this issue very carefully. While obviously intellectual property needs to be protected, it is essential to look at comfort of the rightful customer before taking in account possible misuse. Content providers should learn from the software industry: it is absolutely clear that consumers do not like copy-protection which puts constraints on their lawful usage. |
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 Introduction In the past few years, Digital Rights Management (DRM) has been at the center of a flurry of activities. Numerous systems, standards and technologies have been invented to prevent the illegal copying of digital material, and the debates this has triggered are as heated as the subject is complex. In the Napster-obsessed music business where every music-lover with a fast Internet connection is a potential pirate, the content providers are scrambling to make illegal use of copyright-protected material impossible. Now, I’m not suggesting that there aren't very compelling reasons for protecting the rights of artists and their distributors. It is less clear, however, if the content providers busy with digital rights management have given sufficient consideration to possible side effects of these complex copy protection schemes. Pfeiffer Consulting would like to urge everybody in this business to look into this matter in detail to avoid far reaching problems. Think about the customer, not the pirate What is the main problem with DRM? Quite simple: it is mainly concerned with the illegal usage of material and cares little about the lawful customer. If you have bought a book, a CD or a video-tape, you expect to have the right to pass it on to a friend or a member of your family. Whether this other person does something illegal with it shouldn't be your problem, and it certainly should not limit your usage of your rightfully acquired possession. How would you like a book which you can only read in your house but not in the subway? How would drivers react if a law on speeding impeded their comfort when driving at authorized speed? Therefore, the first concern of any DRM solution should be to make sure that the normal user of content does not experience any constraint in his legitimate usage of the content he has acquired. Any system which does not offer this basic consideration to the customer is doomed. Of course, one could counter that digital contents are different, since they are not bound to a physical carrier. This is true, of course, but it does not necessarily make any difference for the man in the street. Does anybody in the content business really think Mr. and Mrs. Consumer make the slightest difference between copying a CD to a cassette, and burning a CD? Why should copying files to a MP3 player be different from making a special tape for your workout? But never mind the arguments and examples. The real issue is somewhere else, and it has potentially far reaching implications. The question content providers need to ask themselves is simply: will consumers take it? Can I afford to make my customers angry? Never mind the pirates - if legal users reject DRM, it could really spell trouble for content providers and technology suppliers alike. Learn from the mistakes of the software industry At that level, the content industry has a lot to learn a lot from the software publishers. The lesson is simple: copy protection is not accepted by the market. No average software publisher in his right mind would bring out copy-protected software: users hate it, and it doesn’t really stop hackers from pirating the programs anyway. The only cases where (hardware) copy protection is employed and— grudgingly— accepted by users are vertical-market solutions for professionals such as high-end 3D rendering packages. Isn’t it ironic that the same Microsoft which is now defending pretty stringent DRM schemes for e-books does not use copy protection on its software products? Why? Because they would sell fewer copies and would be more vulnerable to competition. There are many examples to that effect: Quark launched XPress in 1987 with a key-disk copy-protection scheme. Despite strong interest in the product, the market reaction was so bad that the company had to release unprotected software a few months later. There are dozens of examples of the kind. So if users don’t accept copy-protection on a professional program, why would they do so on a something which should cost a few dollars? The underlying risk The real concern, of course, is the impact excessive DRM schemes can have on emerging markets and technologies. Take e-books, for example, a market which at best is still dormant: it could virtually be stifled if publishers are not paying attention to the comfort of the customer. One might even argue that e-books need pirate copying to get the message out. I have seen marketing managers in software companies who view a certain amount of pirate copying basically as viral marketing. When you are trying to sell something that your target customers are not used to buying, you have to convince them that they actually want your product. And e-books certainly still need to do a bit of convincing… The emerging market for MP3 is in a similar situation: while it is a big hit with Internet savvy teenagers, MP3 has yet to become a mainstream force in the consumer market. Content providers need to be very careful in how they implement DRM schemes concerning music files: if for instance it is suddenly impossible to copy a track from a CD to your MP3 player, it would make them suddenly much less attractive. If you are a content provider, don’t take these matters lightly. You stand to lose much more than you might through pirate copies. So whatever you do, think about the consumer first. The costumer expects to be king - even in a digital world…. 08 Feb 2001 ©2001 Pfeiffer Consulting |
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