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Disclosing DRM - September 18, 2007

NEW YORK--Should we let the market decide how and when copyright owners use digital rights management technology to protect their content?

That's certainly a common refrain from content owners as they try to stave off in Washington and a growing number of foreign capitals to set limits on its use, or mandate interoperability with other DRM systems.

"There's no debate about whether digital rights technology should exist. The only rational debate is how they are deployed and whether government should determine how and when they’re implemented," MPAA exec VP Fritz Attaway said Monday at the Digital Rights Strategies conference here sponsored by Jupermedia (co-sponsored by Content Agenda). "I think it should be a function of the marketplace. Consumers will avoid systems that use digital rights technology that is not consumer friendly."

But how much real market pressure can consumers bring to bear?

Not much, according to David Sohn of the Center for Democracy and Technology, because they generally don't have enough information about DRMs the encounter to make meaningful choices.

"If consumers are well informed about DRM, they can make educated decisions about what tradeoffs they find acceptable," Sohn said at the same conference. "Then they could exert market pressure on DRM developers for more choices and more flexibility."

For the most part, though, they lack the information needed to make educated decisions.

"I disagree with the notion that DRM should be invisible to the consumer," Sohn said. "They don't need to know all the technical ins and outs but there does need to be some awareness and understanding of what a particular DRM does."

Among the issues consumers might weigh if they were given sufficient information, according to Sohn:

• What does a DRM allow or enable? Does it permit personal copying, time and space shifting and making backups? Is there a risk of unexpected loss of content should a service provider go out of business or stop supporting the service?
• Collateral impact. Does the operation of the DRM compromise privacy, or security? What is its impact on other devices in the user's network.
• Transparency. Are use limits disclosed? Are you given fair warning when you're approaching those limits?
• The apparent purpose of the DRM: Does it seem reasonably necessary to facilitate a new business model?
• Comparisons with non-DRM scenarios.

Market forces can be an effective form of regulating buyers and sellers. But markets can't operate efficiently if buyers and sellers lack sufficient information to make rational choices.

So, if your position is to let market forces regulate the use of DRM technologies, is that an argument for mandating sufficient disclosure of what a DRM does, by government regulation, so that real market forces can be brought to bear?

"I hope it doesn't get to disclosure regulation but I absolutely believe that disclosing to consumers what they can and can't do with our content is extremely important," Attaway said. "I think we have to do that in all forms of our distribution."

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