Digital rights management value questioned

David Canton – for the London Free Press – July 1, 2006

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Digital rights management (DRM) technology has been used by CD and DVD vendors to control what we do with them. It may, for example, limit what devices we can play them on, limit copying or limit where in the world we can play them.

The entertainment industry claims that without DRM, sales will plummet as everyone will copy their content rather than buy it.

Last week’s column talked about the Sony rootkit fiasco and concerns of the privacy community about DRM.

There have been anti-DRM protests at industry events by people dressed in biohazard suits to illustrate that DRM can cause more harm than good. (See www.defectivebydesign.org.) One problem is it allows publishers to enforce any form of restriction they choose, regardless of their legally granted copyrights or the user’s legal rights to use it.

In general, it just frustrates customers, the very people the industry should be catering to.

DRM often restricts use by the consumer of a legitimately purchased product. For example, a provider offers music you can play in only a few select devices. You discover you can’t play the music you purchased in your car’s in-dash player.

You switch to a service that doesn’t restrict you to certain players, only to discover your in-dash player isn’t capable of playing the media format provided by your new service. The free file-sharing software that provides a hassle-free alternative is very attractive in comparison.

David Berlind of ZDNet says DRM should be called Content Restriction Annulment and Protection (CRAP) and has written articles and created videos about what is wrong with it. (See www.ZDNet.com.) There is even an anti-DRM website at www.ihatedrm.com.

The entertainment industry justifies these measures by relying on a perception that it is losing money due to copying.

Losses due to piracy means lost profits, lost jobs and lost taxes and in the end everyone loses. This argument is also used to bolster support for tougher copyright laws.

A report for the Department of Canadian Heritage’s Copyright Policy Branch entitled The Economic Impact of Canadian Copyright Industries — Sectoral Analysis was recently obtained by Michael Geist. Although the report has not been released publicly, Geist obtained a copy under an Access to Information request.

The report is based on data from 1997 to 2004. It reveals that copyright industries — defined as music, movies, radio, television, publishing, theatre, software, and advertising services — make up 4.5 per cent of the Canadian economy and 5.5 per cent of Canadian employment.

The report studies the Canadian copyright industry compared to its American counterpart. While the Canadian industries are a smaller portion of the economy overall, they have actually outperformed the U.S. industries in growth rates and contribution to national employment.

Geist uses this data to question why critics of the Canadian copyright laws believe that we should emulate the heavily criticized American regime.

The report addresses declining sales in the music industry, but, according to Geist, ignores some fundamental factors in the analysis.

For example, the report calls peer-to-peer file sharing of music illegal without engaging in any kind of analysis of whether or how it is illegal.

There is also no discussion of evidence that changes in retail distribution, the decline of radio and competition from other consumer products such as DVDs and video games are the primary reason for declining sales.

Most important, however, may be the bottom line. The Canadian recording industry’s contribution to the GDP increased steadily between 1997 and 2004, jumping from $243 million to $387 million. Hardly an endorsement of the industry’s position.

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