Ditch The Restrictive DRM: Happy Customers Equals More Profit

[qubit]

Rice University and Duke University are the latest in a long line of educational institutions to fund research on the effect of using restrictive Digital Rights Management (DRM) to try and control levels of so-called "piracy", which is allegedly reducing sales of content-only, infinite goods/virtual products, such as music, movies, computer games and books. (Some observers writing about DRM replace the word "Rights", giving us the phrase Digital Restrictions Management, which seems a more accurate description of what it's really about and removes the veneer of legitimacy from it. When buying DRM'd content, you are buying digital handcuffs, nothing more, nothing less.) The universities sponsored a study called Music Downloads and the Flip Side of Digital Rights Management Protection and what it found is that contrary to popular belief amongst the big content companies, removing DRM can actually decrease levels of piracy and increase sales. The fact is that DRM is always broken by hackers and pretty quickly too, often within a day or two (there isn't a single one still standing) leaving legal users who work within its confinements with all the restrictive hassles that it imposes, while the pirates get an unencumbered product to do with as they please. How is this progress?



The study says:

Removal of these restrictions makes the product more convenient to use and intensifies competition with the traditional format (CDs), which has no DRM restrictions. This increased competition results in decreased prices for both downloadable and CD music and makes it more likely that consumers will move from stealing music to buying legal downloads. Unlike in earlier literature, we examine consumers' choices among all the major sources of music. By analyzing the competition among the traditional retailer, the digital retailer and pirated music, we get a better understanding of the competitive forces in the market.

Then the punchline, the part that really matters in this whole debate:

Decreased piracy doesn't guarantee increased profits. In fact, our analysis demonstrates that under some conditions, one can observe lower levels of piracy and lower profits.

Yes, that's right, preventing someone from making a copy in no way equates to that person actually buying a copy, which is really quite obvious to most people, except the big content companies.

The points above are something that websites such as Techdirt have been saying for years, so the message has been out there for a long time, if only the big corporations would listen.

This study is due to be published in the November-December issue of Marketing Science, produced by the Marketing Science Institute, a well-respected organization established 50 years ago in 1961. However, looking at the MSI's website, one can see that they unfortunately do operate a paywall system, itself a form of DRM. Therefore, it seems safe to say that this new research will be locked away from the general public, which is ironic indeed. On top of that a copy is likely to appear on file sharing websites like The Pirate Bay anyway, so why bother?

While this story was reported directly from Rice University's announcement, thanks go to engadget for their news story, which inspired this one.

TorrentFreak has also reported on this story, here and is a website well worth reading.

View at TechPowerUp Main Site

 

[[H]@RD5TUFF]

No . . .. . really . . . .. .

 

[FordGT90Concept]

I'd be thrilled if an anti-DRM movement starts among publishers and we see a new high-quality, DRM free audio format. The #1 reason why DVD-Audio failed is because of the DRM. It makes it a PITA to convert it to a portable format like can easily be done with CD Audio. And hey, they could rake in the cash too. A lot of people would rather buy than download a 4+ GiB file.

DRM is a factor in my buying decisions. The less DRM, the more likely I am to buy.

 

[xenocide]

In other words, Rice and Duke just discovered common sense.

 

[MikeMurphy]

Its too late. Big media must employ DRM in order to be afforded protections by the DMCA and the Canadian equivalent. For example, under the proposed Canadian Bill you can do pretty much anything you want with your media, as long as you're not breaking DRM.

Ironically, their own self-crafted legislation now prevents them from ditching DRM.

 

[TheMailMan78]

The title of this thread should be "RICE: Uncommon wisdom. No common sense."
So removing DRM will increase sales? If that were the case DRM would have never been thought up to begin with. People were downloading music and such without paying for it. Hence DRM was formed to slow that down. Does it work? Yes. To an extent. Joe Six Pack can no longer drag and drop files to his buddies at the office. Will it stop tech savvy people? No. But the few it did stop is better then nothing.

The concept isn't hard.

Is it a sold good? Yes. Did you pay for it? No. This means you stole it. Its theft.

Anyway this is a retarded thread. We have been down this road WAY to many times. It a powder keg.

 

[xenocide]

The title of this thread should be "RICE: Uncommon wisdom. No common sense."
So removing DRM will increase sales? If that were the case DRM would have never been thought up to begin with. People were downloading music and such without paying for it. Hence DRM was formed to slow that down. Does it work? Yes. To an extent. Joe Six Pack can no longer drag and drop files to his buddies at the office. Will it stop tech savvy people? No. But the few it did stop is better then nothing.

The concept isn't hard.

Is it a sold good? Yes. Did you pay for it? No. Theft.

Anyway this is a retarded thread. We have been down this road WAY to many times. It a powder keg.

Most music services already stopped using DRM since it caused more problems than it solved, and in most cases diminished sales. I don't think most people that downloaded music in the first place were really thwarted by DRM, since most places involving file sharing would just strip it off before uploading. Nothing was quite enjoyable about having to remove DRM from files I paid money for just to put it on my damn MP3 Player.

This can go alongside the entire mountain of data that links piracy to increased willingness to purchase products. It's pretty common sense that 1 instance of piracy does NOT equal 1 lost sale. In most cases, it's people who had no intention of ever buying the product in the first place. If any industry--say the gaming industry--wants to minimize piracy, the answer is to give a reason to buy it. Offer a superior experience to those that willingly purchase your product. Look at Blizzard with SC2, access to B.Net was definitely worth it, and they presented a fantastic game. Guess what! It sold well!

 

[entropy13]

In other words, Rice and Duke just discovered common sense.

Wait for the MPAA and RIAA to start suing them.

 

[TheMailMan78]

Most music services already stopped using DRM since it caused more problems than it solved, and in most cases diminished sales. I don't think most people that downloaded music in the first place were really thwarted by DRM, since most places involving file sharing would just strip it off before uploading. Nothing was quite enjoyable about having to remove DRM from files I paid money for just to put it on my damn MP3 Player.

This can go alongside the entire mountain of data that links piracy to increased willingness to purchase products. It's pretty common sense that 1 instance of piracy does NOT equal 1 lost sale. In most cases, it's people who had no intention of ever buying the product in the first place. If any industry--say the gaming industry--wants to minimize piracy, the answer is to give a reason to buy it. Offer a superior experience to those that willingly purchase your product. Look at Blizzard with SC2, access to B.Net was definitely worth it, and they presented a fantastic game. Guess what! It sold well!

Maybe I'm a little older then you but when I used to pirate napster and later limewire didn't strip anything. It was just a plain old FTP system and people would pass whatever to each other. The industry got hurt from that. THATS when they started to try for DRM. But again working in a office I would get people all the time asking me to "hack" and get them this song/movie/game. Why? Because the DRM made it MUCH harder for them to steal it off the web. Most just ended up buying it in stores when I told them no.

See nothing you steal off line is a necessity for you to live. Its all luxury items. You don't need it. But if you want it you should pay for it. No one owes you anything. NOTHING. Don't like DRM fine. Don't by the product. But don't make excuses to steal. No one believes it.

 

[entropy13]

So removing DRM will increase sales? If that were the case DRM would have never been thought up to begin with.

"So increasing taxes will reduce the deficit? If that were the case taxes would have never been decreased in the first place." Agree or disagree?

People were downloading music and such without paying for it. Hence DRM was formed to slow that down. Does it work? Yes. To an extent.

Agreed, it DID work and slow down the "paying for it" part. Not everybody has a credit card, or can use PayPal. Yet physical media for music stayed at roughly the same price (and then the added DRM too) even though the PPP decreased. AND THEY BLAME IT ON PIRACY!?!?!?

Joe Six Pack can no longer drag and drop files to his buddies at the office. Will it stop tech savvy people? No. But the few it did stop is better then nothing.

Really? MP3 sites based in Russia (unless .ru means another thing?) allowing direct downloads beg to differ. And they're quite easy to use and get too. Haven't really used them much though, most (English mainstream) music nowadays suck.

 

[TheMailMan78]

"So increasing taxes will reduce the deficit? If that were the case taxes would have never been decreased in the first place." Agree or disagree?.

Depends on which economy we are talking about. In the US we need to cut spending to reduce dept. Not sure how this applies to the conversation.

Agreed, it DID work and slow down the "paying for it" part. Not everybody has a credit card, or can use PayPal. Yet physical media for music stayed at roughly the same price (and then the added DRM too) even though the PPP decreased. AND THEY BLAME IT ON PIRACY!?!?!?

Yeah. Mass digital distribution wasn't there before. When it came on to the scene media sales went down. Its not rocket science.

Really? MP3 sites based in Russia (unless .ru means another thing?) allowing direct downloads beg to differ. And they're quite easy to use and get too. Haven't really used them much though, most (English mainstream) music nowadays suck.

Again you give way to much credit to most people and how savvy they are. Most still try and download napster. Also I was responding to this statment...

I don't think most people that downloaded music in the first place were really thwarted by DRM, since most places involving file sharing would just strip it off before uploading.

 

[FordGT90Concept]

If that were the case DRM would have never been thought up to begin with.

Until recently, DRM has always been outsourced from other corporations. They use it because they're told they need it. It's also their "panic button." Whenever they see a dip in sales on a medium, they always blame pirates first--nevermind the trends that lead to it (e.g. music industry moving away from physical formats to download formats). In the music industry, the trends effectively killed the DRM. The same is happening to film. It's starting to happen in computer games too with services like GoG.com.

Put bluntly, they lose more money paying for DRM than they ever recover from it. Logic/trends will ultimately prevail.

Maybe I'm a little older then you but when I used to pirate napster and later limewire didn't strip anything. It was just a plain old FTP system and people would pass whatever to each other. The industry got hurt from that. THATS when they started to try for DRM. But again working in a office I would get people all the time asking me to "hack" and get them this song/movie/game. Why? Because the DRM made it MUCH harder for them to steal it off the web. Most just ended up buying it in stores when I told them no.

Napster and Limewire had nothing to do with it. It was CD Audio's fault and the fact anyone could rip the music from it with ease. Napster and Limewire never would have taken off without the vulnerability in CDs. DVD-Audio was launched about the same time they started.

 

[erocker]

Depends on which economy we are talking about. In the US we need to cut spending to reduce dept. Not sure how this applies to the conversation.

Yeah. Mass digital distribution wasn't there before. When it came on to the scene media sales went down. Its not rocket science.


Again you give way to much credit to most people and how savvy they are. Most still try and download napster. Also I was responding to this statment...

This isn't about piracy or stealing someone's work. This is about people who do purchase software and have to deal with DRM issues on the software they bought. Win for the consumer, let the companies and authorities protect the seller without inconveniencing the buyer. Less DRM issues for the buyer means a happy customer.

 

[TheMailMan78]

Until recently, DRM has always been outsourced from other corporations. They use it because they're told they need it. It's also their "panic button." Whenever they see a dip in sales on a medium, they always blame pirates first--nevermind the trends that lead to it (e.g. music industry moving away from physical formats to download formats). In the music industry, the trends effectively killed the DRM. The same is happening to film. It's starting to happen in computer games too with services like GoG.com.

Put bluntly, they lose more money paying for DRM than they ever recover from it. Logic/trends will ultimately prevail.

I agree to an extent. But DRM panic wasn't unwarranted. Why? Because sales dipped at the dawn of digital distribution because there really wasn't a way to purchase music on line. I'm talking years ago not now.

So what happen is there were all these little FTP programs sharing music. NO ONE was buying music anymore from the store. They all just downloaded it for free. Sales dipped. Thats a fact. They dipped from mass piracy. DRM was/is a security blanket for investors from this era. Does DRM stop theft? No. But it does in fact slow it down. Most people in offices have one or two guys they go to for all their downloaded goods. Why? Because they can't DL it themselves anymore. DRM made a lot of things idiot proof. Nothing is nerd proof.

This isn't about piracy or stealing someone's work. This is about people who do purchase software and have to deal with DRM issues on the software they bought. Win for the consumer, let the companies and authorities protect the seller without inconveniencing the buyer. Less DRM issues for the buyer means a happy customer.

So you wanna have a conversation about DRM and not talk about the purpose of DRM?

Also I have NEVER had an issue with DRM that I couldn't work out legally.

 

[LAN_deRf_HA]

If there was an inkling of competence in corporate management they'd only need to figure out one thing. Does the cost of the DRM in both development/licensing/boycotting cost them more or less than the casual "let's take this game/music and copy it onto my friend's rigs." Unfortunately top level decisions like this are driven by asinine amounts of utterly illogical special interests. Sony probably offers all sorts of incentives to get companies to keep throwing away money on their rootkits.

 

[FordGT90Concept]

So what happen is there were all these little FTP programs sharing music. NO ONE was buying music anymore from the store. They all just downloaded it for free. Sales dipped. Thats a fact. They dipped from mass piracy. DRM was/is a security blanket for investors from this era. Does DRM stop theft? No. But it does in fact slow it down. Most people in offices have one or two guys they go to for all their downloaded goods. Why? Because they can't DL it themselves anymore. DRM made a lot of things idiot proof. Nothing is nerd proof.

The genie is out of the bottle and there is no putting him back in. They have to adapt to survive or perish. The extortion prices of pre-digital media are gone and will never come back.

There's three types of pirates:

1) Demo'ers: They try before they buy. Publishers still might make money off of them but only if the product is good and there isn't something (like over zealous DRM) that keeps them from buying. DRM can prevent a sale in this group.

2) Causal: They obtain the material and never pay for it. If they can't circumvent the DRM, they throw it in the recycle bin and that's that. DRM has no impact on this group.

3) Criminals: They obtain the material (may or may not be purchased), mass produce conterfeits, and sell it for bargin rates making a fortune off of it without the publishers seeing a dime. DRM has no impact on this group (at least once it is defeated).

Which groups are out for a profit? Only #3. Which ones are literally stealing money? Only #3. Which one can save publishers a lot money by legally pursuing? Only #3.

If they took all the money they spent on DRM and spent it on breaking up criminal rings (an alarming number of them are in China), it would be far better spent and you won't alienate group #1 which can help their bottomline on two fronts (more revenue, less losses).

 

[qwerty_lesh]

I agree with ford.

its gotten so bad now that legitimate gamers are being punished with online only single player games. games that will only activate a number of times before requiring you to call their support to be able to play it again (where circumvented versions work without these problems)

simply put, regardless of the DRM if there is demand to pirate it, the DRM will be circumvented eventually.

its group #2 and #3 that drive the circumvention of DRM, mostly those out to profit from any resale.

also as mm78 said this discussion is a powder keg, I don't like the chances of it lasting in a constructive or civil manner for long.

 

[DannibusX]

I typically avoid buying games with restrictive DRM or even supporting companies that use it in their games.

Steam is acceptable for me, it's simple and clearly stated that it is DRM. It also offers the ability to play offline after activation (depending on title/publisher).

Ubisoft's style of DRM forced me to ignore any game that they release, and I love some of their games. I'm not a pirate, so I won't acquire their game illegally but I definitely won't buy it. I recently read that GSC is thinking about including an always-on DRM scheme for STALKER 2 which so totally insures I won't contribute to their coffers as well.

DRM doesn't work as intended. If it makes investors feel good, fuck em. I won't help their bottom line if they include it.

 

[kid41212003]

I'm in group #2! Lol

 

[Completely Bonkers]

I'm OK with copyright enforcement and DRM "in theory". But in practice, my experience with DRM has been:

1./ Needing to place the original CD/DVD into the drive to play the game/run the software
2./ Needing to be connected to the internet to install or play the game/run the software
3./ Rootkits

I'm all with DRM. But not those 3 implementations. Issue 1, which is the least evil IMO, made me find those "NoCD cracks" to simplify MY OWNERSHIP experience. The cracks are changes to the runtime so that it skips the "original CD/DVD" checks.

Points 2 and 3 are absolutely unacceptable for me and I don't buy such games or software. There are choices. And there are other outdoor more healthy activities that can get my attention.

 

[qubit]

This isn't about piracy or stealing someone's work. This is about people who do purchase software and have to deal with DRM issues on the software they bought. Win for the consumer, let the companies and authorities protect the seller without inconveniencing the buyer. Less DRM issues for the buyer means a happy customer.

Yes, exactly. In fact, there's ongoing proof that removing DRM helps a business and it's a shame that I forgot to mention it in the article: iTunes. That service and now Amazon and other spinoff online music shops have all jumped on the no-DRM music model. iTunes removed their DRM from music files a few years ago and they're still just as successful as before and likely more so.

If the DRM maximalists were right, their music division would have gone out of business with all the unauthorized copying and their movie business which still has DRM, would be doing fine. As it is, both services are doing fine. They really should remove the DRM from their movie business and watch buyers and sellers benefit.

The other fine example of course, are www.gog.com which started out from the start as a DRM-free service, which is their trademark and they're doing fine, too.

 

[Mr McC]

Thanks for the link Quibit.

DRM can only be interpreted as failing to function if we cling to the fallacy that it was intended to thwart piracy.

This is now common knowledge and yet the companies that employ stringent DRM continue to attempt to force it upon us whilst pointing to digital theft statistics and the need to appease shareholders. A return to the philosophy of "the customer is always right" and focus on providing a quality service and product, rather than continued attempts to misconstrue the reality of the situation, would be most welcome.

 

[qubit]

Thanks for the link Quibit.

DRM can only be interpreted as failing to function if we cling to the fallacy that it was intended to thwart piracy.

This is now common knowledge and yet the companies that employ stringent DRM continue to attempt to force it upon us whilst pointing to digital theft statistics and the need to appease shareholders. A return to the philosophy of "the customer is always right" and focus on providing a quality service and product, rather than continued attempts to misconstrue the reality of the situation, would be most welcome.

You're welcome. So-called "trade groups" like the RIAA & MPAA, the UK's FAST etc peddle the myth that "piracy" is killing their business, when actually nothing could be further from the truth. On top of that, they keep putting out bogus statistics of the alleged damage being done, without anything to back them up. This is the kind of lie that Techdirt outs all the time. It's based on this BS that the dreadful ACTA is being imposed all around the world. Japan's already signed it and others are unfortunately going to follow. What a sham.

 

[NC37]

Always hated CD in drive DRM and others on games. Originally didn't care for Steam but now I like it. I've seen the alternatives and I hate them more.

There have been some DVDs put out by Funimation these last couple years. Shows that were excellent but the reason I didn't buy them right away was due to the DRM. They have real annoying ones which split the tracks into about 99 different ones and make it a pain to make digital copies of for your iPod or PSP. Which is what I want to do. Why should I have to pay more for the same thing they are ripping for me when I can do it myself? I remember seeing notes on Handbrake forums of software which can still rip them but its just a pain. I'd have to pay for that software to do it when Handbrake could do it for free but obviously is trying to avoid dealing with the studios coming down on them.

Speaking of Handbrake. Funny note, DVDs you can't rip on PC due to DRM, sometimes work just fine on Mac Handbrake. Not all but some do. Heh.

I'd admit, I wouldn't get mp3s as freely if I'd have access to more music here. Much of the stuff I get now comes from Japan and I have no options to buy that I know of. Apple won't let me buy from their store because I am not a resident there and iTunes doesn't carry the same inventory on different stores. Other places, not really familiar with or they charge heavy import fees.

 

[xenocide]

I'd admit, I wouldn't get mp3s as freely if I'd have access to more music here. Much of the stuff I get now comes from Japan and I have no options to buy that I know of. Apple won't let me buy from their store because I am not a resident there and iTunes doesn't carry the same inventory on different stores. Other places, not really familiar with or they charge heavy import fees.

Right. Fucking. There.

You just highlighted the number 1 reason people pirate music\movies\games. In the age of digital distribution, the number of arbitrary restrictions is astounding. Not offering content to certain countries, not offering an acceptable price scheme ($ != €), or just not offering the content people want. Why can't you play BF3\Run Origin in Puerto Rico? Why does it cost people in Australia and the UK almost twice as much as those in the USA to buy the same damn product? Why did it take them 5+ years to get The Beatles on iTunes?

Making it as difficult as possible for people just to use the product you sell them isn't the answer, offering people the product they want, for a reasonable price, when they want it, is in fact the way to curtail piracy.