Online Design & Marketing

As we daily face new issues of design and marketing ourselves, we would like to share the issues and ideas that come up with others. Please feel free to add to this discussion.

Monday, March 06, 2006

DRM as bottleneck to ubiquitous digital downloads

It really is exciting to see the growth in popularity of digital downloads, whether that be software, music, videos or any other product. As broadband connections have become quite widely available and the speeds continue to increase, consumers are feeling the benefits of being permanently networked. However, the adoption will hit a definite peak and see a decline unless we see further evolution of DRM (Digital Rights Management) that provides consumers the benefits that they have enjoyed with non-digital media.

In Mike Evangelist's blog, he clearly laid out his arguments for how this problem will hit the new breed of high definition DVD technologies "The HD Boycott Begins now".

DRM has been created to protect the rights of the companies that produce products, however the existing implementations go against the interests of the consumer. This isn't to say that people should be able to make digital copies of products and unlawfully sell them. Instead, there are four issues that are important for people to adopt this new technology.

Just as the CD format was well accepted because customers saw unique strengths over records and cassettes (much smaller than records, you can't quickly jump between songs with cassettes, and perceived higher quality sound), digitally distributed music COULD provide strong arguments for customers. This point is reiterated by a recent article "Are gadgets too complex for us.

The adoption barriers for digital download include:
- lower quality
- less than 100% product delivery
- geographic limitations to product usage
- inability to resell

Of course, I believe that the industry will overcome these barriers and add some unique features that will make digital download an option that will eliminate all current physical distribution media. Such is the nature of all first generation products. In Germany, new product releases are always expected to have "Kinderkrankheiten" (childhood diseases). That means that young products will always have problems, but if they survive these Kinderkrankheiten, they will become stronger and gain immunities.

What should we expect from future generations of digital downloads? Well, as DRM evolves and becomes customer-friendly, you will see:

The reason we don't see "CD-Quality" music downloads is that it is an open license for thieves to break current DRM and resell products. Obviously, DRM will evolve so that even audiophiles can enjoy this media. Once that is so, the convenience of direct download and top quality will be very strong arguments.

How many people have invested in DVD movies and are now unsure what to make of the upcoming high definition formats? Are you waiting to purchase new movies until you know if you want to buy new ones in this format? Are you wondering what do with your existing movies (sell and buy again or have multiple copies)? With digital downloads, you could "upgrade" any product you have to take advantage of the current qualiity standards and any extra content or features that may exist. Wouldn't it be great to be a movie in standard definition, knowing that you could later upgrade to high definition? If you received a movie as a standard release and later wanted a "director's cut", that could also be part of an upgrade.

If you have been around for a few years buying CDs, you know that there will always be products that you buy and a few years later realize that you don't want anymore. Everyone needs to have the ability to easily resell those products, otherwise they represent less value to you and you feel more pressure around your purchase decision.

Any physical media can get damaged - books, CDs, cassettes, DVDs, etc. However, the beauty of digital media is that it can be backed up. Obviously, today's DRM is not helpful in making back-ups, but in the future it will be. If your computer dies on you or your mobile music player, you will be able to go back to the source where you bought your digital product and re-download it. Cool, huh?

There is so many great products that one never gets to see in their country. Music, movies, and literature are all constrained by what the local distributors want you to see. If you travel to Japan and find some wonderful music today, you can forget going to the iTunes store in Japan while you are in Canada and buying more music from that same band. Theft of music across borders is forcing content producers and distributors to relook at this strategy. In the future, if there isn't a local distribution company for a product, we can expect that consumers will be allowed to get this product directly from its source of origin.

While I am frustrated by the current status of DRM, I am also very positive about its future. These topics are complicated politcally, economically, as a business model and technically, but with time all of the problems will be solved. Companies will react in the benefit of the customer as dissatisfaction with issues becomes more and more transparent to all of the companies from which we buy our content.