Panels at the second annual New York McGraw-Hill Media Summit, held February 9 and 10, 2005, tackled topics ranging from mobile content to maintaining a loyal customer base to VC funding for entertainment and technology. One of the more lively panels faced the issue of DRM head-on, covering the changes in DRM over the past year, the state of DRM today, and an informed peek at the future of DRM.
Carter Laren, senior security architect at Cryptography Research; Jim Flynn, CEO of EZTakes; Arnaud Robert, director of content security for Thomson Services Division; Chris Parkerson, DRM evangelist at RSA Security; and Bruce Gitlin, VP of business development at ContentGuard discussed "DRM Implementation in Media and Entertainment: From Standardization to Implementation of Solutions" under moderator Lucy Goldenhersh, who is principal at IP Digital Rights Management, LLC.
Although the panelists acknowledged that DRM is difficult to define, Laren put it best and most succinctly when he said that, fundamentally, DRM comes down to: "When someone tries to copy bits—do you allow that?" Recently, it has become apparent that DRM will fail, according to Laren, who emphasizes that this inevitability must be planned for. Progress in the past year includes "maturing in the use of DRM in the music space," Gitlin says, which is evident in the success of Apple's iTunes. According to Robert, the biggest change in the past year is simply that consumers are finally aware of DRM, thanks in large part to Apple and Real.
Don Leake, program director of copy protection business development at IBM Research, was slated to sit on the panel at the Media Summit but was unable to attend at the last minute. However, he concurs that "[t]he most significant change has been the acceptance of the online music business—especially with iTunes." He continues, "One of the most important developments was that iTunes proved that a viable economic model could be built around the commercial sale of a type of media that is easy to copy and store. The iTunes model proved that, even though it is easy and inexpensive to copy and redistribute music files, consumers will buy the content if they receive real value and the system is easy to use."
The issue of creating a viable and simple alternative to piracy for consumers was a recurring theme of the panel. According to Flynn, companies need to show the customer value, or they will figure out a way to be pirates. The value, says Parkerson, is in the experience for the consumer: consumers do not pay for content, but for an experience. It is that mentality that often enables content providers to get consumers to pay for the same piece of content multiple times—for example, people will pay to watch a movie in theaters, purchase it on DVD, watch it on pay-per-view or on-demand television and via other distribution channels.
Finally, Goldenhersh asked the panelists what DRM will enable five years from now that consumers do not have now. Panelists agreed that a major piece of the puzzle will be flexibility. Parkerson believes that consumers will have considerably higher expectations of their digital content, especially when it comes to flexibility, and he thinks that is what scares Hollywood more than anything. Flynn agrees, "eventually the industry will come to its senses" and, at least on the video side, there needs to be a better and more flexible experience—which ultimately is what will keep consumers from turning to piracy.
"The real issue is about enablement for consumers," according to Leake. "We know that any technical issues with the protection of commercial content, like music and movies, can be solved. The question is, what motivates consumers to prefer protected content when for the most part, content types like over-the-air broadcast and audio cassette tapes have historically been unprotected . . . .The answer is to enable new options for consumers using the very technology that protects the content."
Specifically, Laren foresees proprietary technologies solving the technological problems associated with DRM. Although he concedes that standards bodies could solve DRM problems, he explains that, historically, problems have been solved in the same manner in which Apple made iTunes work—they simply sat down and did it. Gitlin also believes that, in the future, major players may unite and adopt interoperability standards on some issues while agreeing to compete on others. Parkerson explains that consumers aren't screaming for interoperability right now because, for the most part, they are having a satisfactory experience and content providers will not care until consumers do.