The Pain of the Downloadable-Music Dilemma

I hadn't planned to write any more about the MP3.com (MPPP)/Napster/Gnutella downloadable-music copyright issues after last week's three-part series. You can beat even the best story to death. But I've had such an enormous response from TheStreet.com readers that I want to visit this just once more, to respond to your many questions and suggestions on methods of stopping the illegal copying of digital content.

A number of readers wondered why I didn't devote space to the several digital rights management (DRM) systems under development. Aren't they going to be important players? And won't they finally solve this problem, and on the side of the angels -- er, on the side of the content creators and their record-label publishers?

Well, there are certainly plenty of contenders. I count at least eight entries vying to become the DRM vendor of choice for record companies looking eagerly but warily at online music sales. The list includes some relatively big names, too, such as Reciprocal, which has partnered with (and received an investment from) Microsoft (MSFT). Reciprocal's DRM technology, which works with both music and movie/video content, is already embedded in Microsoft's Windows Media Player.

But this isn't an exclusive deal: Microsoft has been emphasizing that while it believes -- or at least fervently hopes! -- the industry wants to rally around a single DRM system, which it thinks will be the Reciprocal system, the company will work with others as necessary. For example, Microsoft is working now with BMG Entertainment to make WMP compatible with the DRM system BMG has chosen, a product of a joint venture between IBM (IBM) and InterTrust.

And at its Real Conference 2000 last week in San Jose, Calif., RealNetworks (RNWK) CEO Rob Glaser proclaimed that its latest RealPlayer, version 8, supports no fewer than seven DRM systems. Through its catholic approach, RealNetworks is obviously hoping to fend off Microsoft's advances with Windows Media Player, which has gotten a lot of press for its high-quality sound and smaller file sizes. (Of course, MP3 remains, overwhelmingly, the digital music format most widely used.)

So what's not to like about these systems, all of which promise to control downloading and subsequent redistribution by making the downloaders pay for what they get? And, in most cases, by keeping them from sharing the files with others?

What's wrong is that I don't think they're going to work very well over time, and will be pretty much ignored by the music-loving public. Remember my basic rule: Whatever copy-protection system your programmer can invent, my programmer can break. And there are tens of thousands of great programmers looking for an opportunity to win fame among their peers by cracking these systems.

Even more, what's to stop the continued sharing of files converted from audio CDs? There are billions of CDs in existence today, all perfectly copyable, and even if the record industry wanted to create and embed new anticopying measures into future CD releases, the risk that those systems would make the discs unplayable on a significant percentage of the world's many millions of CD players would surely deter such a move.

Discmen of the World, Unite!

Glaser makes one good point: It's in the interest of companies such as his, producers of download players, to try to serve both sides here -- listeners and artists. Yes, Rob, a fair point -- but meaningless if public opinion and habit have already moved beyond worrying about the legality of unauthorized, pirated downloads.

And I think we're already there.

So if you're a believer in the efficacy of DRMs, maybe one or more will be good investments. But I'm skeptical. Highly skeptical.

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I have to give credit for vision on this problem to an old friend, the Doyenne of the Digital World, Esther Dyson. The Ubiquitous Esther predicted almost a decade ago that the digitization of everything would mean the end of effective copyright controls, and advised "creators" of every sort to find new ways of making money from their efforts -- performances, consulting, speeches and so on.

I remember all too painfully how I joined the chorus of digital folk who hoo-haw'ed Esther's prediction. Surely she was wrong: We would use that very same Earth-shaking technology we were creating to allow widespread access to digitized files to then make sure they were handled responsibly. Right?

Guess what: We were wrong. She was right.

And now "content creators" of every sort face the dilemma of trying to figure out how to make a living in a changed world, where representations of our work -- films, books, recordings, magazine articles and more -- can no longer make us wealthy ... but where we must keep creating anew, and delivering anew, that work itself, "live," if we're to keep our beach houses and Beamers.

Sorry, Esther.

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