Internet, Video

Why DRM Won’t Work for Video

There was a time, during my final years at Real (say, 2001-2003) I thought there was a chance DRM for video could work.

I don’t anymore.

I believe that the only way to create a durable, winning service for paid-for video delivered over the Internet is without DRM. I don’t take this position because I think copyright is inherently bad — that’s a more complex issue for a later time, and besides I’m undecided on that point — but because of practical considerations.

The main practical consideration is that DRM will work only if it is easy for consumers, and that in turn will happen only if there is a single-approach that works for nearly all of the content on most of the devices. That has been the key to why the VHS and DVD were successful. It is highly unlikely to happen with digital video delivered over the Internet because it would require either (a) coordination among a significant number of companies not likely to work together, or (b) one or two companies to establish a DRM standard by significant control of the marketplace (and only Apple appears like the might be able to do that as of now).

Neither of these scenarios is likely with Internet video because there are:

1. Lot’s of device makers
Arguably, this has been the case with the consumer electronics industry for a long time, and yet they’ve managed to herd the cats and get support for agreed-upon standards, DVD being the best example of that approach. But the list is even bigger here. Not only do you have the traditional television component constituencies, you also have mobile phone industry, the PC industry, chip-makers, game boxes makers, pvrs, portable devices kings, and many others all wanting a piece of the action. Getting them to agree is unlikely, and because the stakes are so high and the competitors are so numerous, it is equally unlikely that one or two will gain some type of hegemony over the others. Only Apple appears to have a chance, and it would be the equivalent of shooting the moon if they pulled this off with video (see below on why they’ve succeeded with music).

2. Lot’s of service operators
Folks like Yahoo, MSN, Google, Apple, and maybe eBay or Amazon or Real all will offer video services over the Internet, not to mention the large media companies like NewsCorp, Disney, TimeWarner; or “delivery” companies like the traditional telcos, the cablecos, satellite operators, or the mobile phone operators. Indeed, MySpace just announced today a video download services. None are so powerful to be able to dictate a standard, and doing so would require collaboration with some alliance of device makers. Microsoft has essentially been trying this approach for the past six years with Windows Media and it’s associated DRM, allied with PC makers and various device makers. Apple has kicked their ass by having a better, more integrated consumer experience with some degree of openness. If MSFT couldn’t pull it off at the height of their power, and it’s deep reach into 90% of the desktops out there, how will a consortium of theses companies get enough traction to make a single approach work?

3. Lot’s of content producers
Video is not music. The field of play is altogether different, and the biggest difference is the absolute range in both kind and number of video makers, owners and producers.

Apple (and Real and Napster and fifty others) created more or less complete, compelling catalogs of music for sale or rent by licensing 2-3 million songs in deals with essentially four partners (Universal, EMI, Warner, SonyBMG). No one company, not even the most powerful company, will be able to do that in video or even get close. There are too many producers and owners of video content, ranging in type from the big mega-media conglomerates (Viacom, NBC Universal, Disney, NewsCorp among them) to individual film-makers, artists and individuals.

The only chance of success is to get a significant majority of these producers to gravitate organically towards a single proprietary DRM. The only company that appears to even have a chance of doing that now is Apple; clearly, their hope is to get enough momentum so that success begets success, that more and more video owners distribute through their system to their devices, and that over time they achieve a position of hegemony.

While they are off to a good start, and could shoot the moon, there are too many powerful competitors with too much to lose standing in their way. Not just Microsoft. Or Google. Or Yahoo. Or Sony. But Comcast (already selling way more VODs than Apple is video for the iPod). And DirecTV/Sky/Newscorp. And any number of other folks with a real or quasi- distribution platform at risk.

So Apple will get stuck with a subset of wanted and desirable content, with a subset of consumer experiences (will they ever get DVD burning for video, for example?). And as consumers we’ll have the Balkans; a mess of warring and incompatible video DRMs and content offerings to wade through, which in turn depresses both the availability and demand for content through these services. And plays into the hands of folks like Comcast, DirecTV, Sky and others who will do just enough to satisfy most of the people most of the time.

So, the only way out of this mess is rallying around good standard codecs and formats that work on most devices, most machines, most of the time. The device makers and the service operators (except maybe Apple, or Microsoft) can be brought around, as they would gain. It’s the content owners and producers who are most scared of this approach. They have been scared into believing (by themselves, each other, and DRM proponents) that delivering content in MP3, MPEG, or h.264 without DRM will result in piracy. Conveniently forgetting that piracy is already occurring.

The only way to bring the content owners around is to give them proof. Show them an example of a video selling a couple million copies, available say in h.264, without DRM, and with not much piracy. I think this is possible, and would have happened with music except that the stores were forced by the labels to use some form of DRM. So we never got to see what might have happened.

The sad thing about Google’s announcement Friday is that they could have been the company to push this approach. They didn’t, so maybe Yahoo! or someone else will. Indeed, there are worse ways Yahoo! could employ their burgeoning LA staff than to evangelize the merits of video without DRM…

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One thought on “Why DRM Won’t Work for Video

  1. Pingback: Epigonic » Google Video Loses the Plot

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