This story appeared on Network World at

http://www.networkworld.com/columnists/2008/030408-bradner.html

DRM: a slow clue train?

More content owners recognize poor digital rights management reduces sales

'Net Insider By Scott Bradner , Network World , 03/04/2008

Random House is the latest major content owner to start to think that maybe not all of its customers are crooks.

The New York Times reported on March 3 that Random House has decided to offer all of its audio books without digital rights management (DRM) unless a particular retailer or author objected. The Times reported that Penguin Group would soon follow. The realization that maybe exploring new business models makes more long-term sense than trying to make a model predicated on the distribution of physical objects work in a digital age has been slow, and far from uniform, but progress is being made.

To date, most major music publishers have embraced DRM-free distribution, some with more enthusiasm than others. For example, Sony-BMG seems to want to prove to itself that the market does not want DRM-free music. It has come up with a clumsy and expensive process that requires a would-be purchaser to visit a retail store before being able to download a DRM-free copy of one of a few albums. Sony's competition could not have designed a better system for Sony if the primary aim had been to minimize the chance of success.

Most of the other major music publishers have been offering DRM-free music through Amazon.com or Apple iTunes. A number only use Amazon.com, maybe to try to reduce Apple's power over them. That sort of reaction is quite pathetic considering that Apple's iTunes proved that the music download business was actually viable.

Random House did not decide to join the DRM-free world without thinking about it. In a letter to industry partners in late February, the publishing house said that it had run some tests and, like music publishers, had not found a correlation between removing DRM and an increase in piracy. They also noted that an author's royalty would be 50% higher for digital downloads than for CD sales. Random House is willing to continue to support authors that fear the new world but made it clear that Random House does not think that is a good path to follow. In the letter, it wrote "if an author is willing to forgo the potential for increased sales through DRM-free retailers, we will be able to support that option."

A few months ago I wrote about University of Minnesota researcher Andrew Odlyzko's thinking on the subject of DRM. "Control vs. usability: What's DRM's future?" The move by Random House and, potentially, Penguin Group are in recognition of the reality that Odlyzko wrote about.

Not everyone sees the same reality. A few vendors of high-end software still insist on using DRM of one kind or another (such as ColorByte Software, developers of the ImagePrint software I use to print on my new Epson 4880 printer. This software will only run if a hardware token is plugged into the computer, making me think that ColorByte assumes I am a

thief).

Movie publishers comprise another major class of non-believers. I expect they will come around eventually but it could be quite a while. Meanwhile, their wares will continue to be distributed illegally and they will continue "to forgo the potential for increased sales through DRM-free retailers." But they are free to choose that option.

Disclaimer: Choice, even if constrained by minimum requirements, is what a university is all about. But Harvard, as far as I know, has not expressed any opinion on the viability of sticking to obsolete business models, so the above is my own opinion.