Mike over at Techdirt cites a rant about the effects of digital rights management (DRM) at The Inquirer and opines "...these systems do absolutely nothing for end users.... It's a shortsighted plan, aimed at holding on to an obsolete business model."
I agree, and it's interesting that he puts it that way. This past weekend I was doing a short consulting gig to help out a friend, and the circumstances forced me to clearly articulate some personal rules of thumb regarding DRM - diagnostics that I had been enacting for some time without a verbal description, as sometimes happens.
First, a definition: It's necessary to distinguish between two goals that can be implemented with the technology of DRM. Permissive DRM used for auditing purposes can be reasonably innocuous to the user and could enable some interesting value chain models. I'm talking about restrictive DRM, which Mike succinctly calls 'copy protection'. To me that conjures up memories of funky floppy disk formatting tricks from the Apple II and IBM PC days, so I'll use the acronym, with the latter meaning. Here's my second pass attempt to formulate DRM as Business Diagnostic.
- Copy protection DRM always destroys end user value, in both convenience and robustness. When you see DRM in a business plan or analysis, it is always there to benefit someone other than the end user. Find out who, it will indicate where power lies in a content value chain.
- The mere presence of DRM indicates a failure to deliver end user value. If the information object were to lose value when extracted from the bundle or service from which it was derived, DRM would not be felt necessary. Therefore the presence of DRM suggests a vendor that is behind the curve, failing to find a new value to deliver as their chokepoint disappears in the digital world.
- DRM almost always means there is trouble afoot for aggregators ('infomediaries'). If it's an aggregator inserting the DRM, their value added is in question. If it's information originators mandating DRM, then they feel they can damage the aggregator's value with impunity, and will likely try to drive end users' attention to themselves.
Examples are easy to find in consumer level media. It's my experience that these diagnostics are just as relevant in vertical or industrial information situations. While they originated from venture capital, they ought to be relevant in any analysis of information value chains.
The Charlie Demerjian article that inspired this post consists of a number of very specific examples (with invective) of the disvalues of the DRM in consumer media. But his subhead nails the conclusion: "It's not good for capitalism." Taking value from the customer seldom is, in the long run.
Update: TVHarmony blog links with an example.