DRM: Still a balancing act?

Introduction

Growth in the market for digital content will mean there is a greater need for technologies that can manage the use and distribution of intellectual property, leading to further growth in digital rights management technology. A report from RNCOS in November 2005 predicted that the market for digital rights management software would reach $3.6 billion by 2008 along with a growth rate of 106.1%.

The term ?digital rights management? (DRM) is an umbrella term for a range of technologies for managing the buying and selling of intellectual property in digital form. At its broadest, DRM can be used to mean a technical framework for managing all policy towards digital material. This can include technologies that track the usage of content or those that deal with the payment of royalties according to the rights associated with the content.

DRM systems allow publishers to exploit digital content according to the rights associated with it while preventing (as far as possible) piracy and copyright abuse.

Users

User expectations are a vital component in the discussion surrounding the application of consumer protection law to DRM-protected products.

Some of the key questions in this discussion are:

• what exactly are user expectations?

• when is there a legitimate interest in providing protection for the user?s rights?

• what can be done by businesses to either fulfil a user?s expectations or at least minimise any loss of consumer goodwill?

Publishers and distributors of digital content have tried to point out that rights management exists to prevent piracy and protect the rights of the originator. But the communication of this information has proved difficult for large corporations to get right.

?Users? are not one single group of individuals with identical characteristics. When talking about the requirements of users, it is important to distinguish between different groups with their own needs and particular issues: libraries, scientists and disabled users.

Lessons from other industries

The digital age arrived with a baptism of fire for the music and film industries. The problems for the music industry were twofold - CD burning technology turned every PC into a potential CD making factory, while peer-to-peer (P2P) networks allowed users to illegally share copyrighted music files with unprecedented ease and speed over the internet.

Music and film companies have used DRM systems in an attempt to prevent digital piracy. The industries argue that DRM technology plays a crucial role in protecting the rights of their artists to exploit their copyrights, although implementation has not always been smooth.

The most notorious example of how DRM can compromise user privacy is the Sony XCP system, which was intended to protect Sony CDs from being illegally copied. The system generated a wave of controversy in 2005, when it was discovered that when the CD was played on a computer it secretly installed a ?root kit? on the hard drive that gave Sony complete access to the computer.

Currently, there is no interoperability between the different DRM systems used by the music industry. Consumers are therefore unable to transfer songs purchased via a particular distributor across various platforms and devices. This has some important implications:

• Lack of interoperability could hold back the market for digital content, thus damaging the potential for new revenues. Consumers could be put off buying digital content because of the inconvenience caused by the lack of interoperability.

• It is contributing to a sense in some quarters that DRM is less about preventing digital piracy and more about locking customers in to media companies? own products by not allowing them to use the content they have purchased on rival platforms.

While the market is dominated by proprietary DRM technologies, the issues around the lack of interoperability h