OS X Conference: Digital Rights Management

In possibly the most anticipated session of the O’Reilly Mac OS X Conference, San Jose Mercury News technology columnist Dan Gillmor hosted a panel on Digital Rights Management (DRM). The panel was made up of Cory Doctorow from the Electronic Frontier Foundation, J. D. Lasica with the Online Journalism Review, Tim O’Reilly, founder and president of O’Reilly and Associates Inc., and Victor Nemechek from El Gato Software LLC.

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Gillmor began the discussion by describing the issues involved with digital rights management, saying that the Internet is both a read and write medium, even if Hollywood thinks that the Internet is essentially “television on steroids.”

According to Gillmor, Apple has been proactive in giving users control over their digital media with “digital lifestyles” applications such as iTunes and iDVD and with hardware such as the iPod.

However, the entertainment industry is seeing the end of a business model that has been “really good for them.” Moreover, they worry about users who see some digital media available for free and begin to expect all digital media to be free.

The question posed to the panel was as follows: “How can Apple hold out as the one company that has the interest of the customer at heart?” Gillmor said that no one from Apple, Microsoft or the entertainment industry was willing to sit on the panel.

Lasica answered first, saying that he’d give Apple a score of 8.5 or 9 out of 10 on these issues. But, Apple is getting nervous. Lasica is researching a book on digital rights issues, but he said that he has been having trouble getting people to talk. Apple recently declined an interview with him after five or six phone attempts.

“Uncle Steve (Jobs) seems to be on the side of users,” Lasica said, “but Eisner ripped into Jobs in Congress for his ‘Rip, Mix, Burn’ campaign.”

According to Lasica, Hollywood is working on two issues — how to clamp down on piracy and how to turn a PC into a “trusted entertainment appliance.”

Most importantly, Lasica said that Hollywood is not worried about the technologies available now, but terrified about what is to come.

Once consumers can get the bandwidth to easily download whole movies and the terabyte hard drives to store them, Hollywood is worried that there may be some sort of Napster for movies. Therefore, the entertainment industry is working to ensure that digital rights management protocols are built into future products more aggressively than in today’s products.

“When the lawyers are involved, you know we’re in trouble,” Lasica said. “People don’t know it’s almost an age of innocence. But in couple of years from now we’ll all know what DRM means.”

Lasica has three suggestions for what people can do. First, stay informed. Second, e-mail or fax your congressman. Finally, become power users, embracing emerging technologies before they have a chance to be controlled.

Next up was O’Reilly, who said that obscurity was a far greater threat to most content than piracy.

For example, over 100,000 books are published annually, but only a few thousand sell in any significant numbers. Most books, regardless of their quality, can’t be read simply because they are not available. For books at risk of falling into oblivion, O’Reilly said that piracy could be the best thing that happened to them.

Moreover, O’Reilly believes that most people are willing to pay for convenient services or information that are useful to them. During his morning keynote, he pointed out that most people pay a small fee for cable television. O’Reilly elaborated on this notion, saying that HBO is one of the most successful stations, and the network sells DVDs and videos of its most watched programs — all of them routinely taped by viewers.

Piracy typically only affects the “cream,” or a percentage of the revenue, of the most successful and useful applications, according to O’Reilly. Piracy will change who will be a publisher. According to O’Reilly, the choice that faces Hollywood and the music industry is will they be the publishers, or will someone else with a different model?

“Give people what they want at a price they can afford,” O’Reilly said. “Panic and fear of people could get some mistakes hard coded into the system.”

The panel then turned to Nemechek. His company’s product, EyeTV, makes any Mac work more or less like a TiVo. So far he has not heard from any lawyers or any pirates about his product. However, he did say that the company had a serious meeting before they began developing EyeTV.

“I think that the majority of people are using EyeTV for legitimate purposes,” Nemechek said. “They are saving things to watch later, using it for home movies and we’ve even had kids say that they use it to save games on their television to show off.”

Finally, the panel came to Doctorow, who said that the DRM issue is currently being fueled by the move to digital television in the United States, slated for 2006.

Broadcast stations want to move this up as quickly as possible in order to sell their analog signal bands. However, they need high quality content to put on digital TV, and Hollywood has said no content unless they approve the technology.

So, Hollywood formed the Broadcast Protection Discussion Group, which Doctorow said wrote a law instead of a standard that ensures that no technology can copy digitally broadcast content.

“These broadcast flag proposals say that you cannot build a Mac the way you want to,” Doctorow said. “And this time around, the technologies are going along with it.”

Doctorow wants to find out how to shift the initiative in this DRM issue from Hollywood to the technology industry.

“When technology, which is a $600 billion a year industry goes up against Hollywood, which is a $35 billion a year industry, technology wins,” Doctorow said.