DRM in the BitTorrent and Broadband Age January 31, 2007 Alan /.effect Dang

Introduction

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Digital Rights Management is a good thing. The problem is that the way digital rights management has been handled by the industry has not been so good. We have copy protection software that act just like malicious viruses and rootkits.

Defining the Problem

The industry needs to recognize that it'll be impossible to stop piracy. The more complex, innovative, or intricate the content protection system, the more interest and zeal crackers will have in subverting such protection. If the US was unable to keep nuclear weapons technology secret after WW2, there is no way the MPAA can ask consumer electronics companies to keep movies and music 100% secure, especially when the whole intent of music/movies is to be seen and heard.

The industry needs to recognize that most people are reasonable. The US gaming industry is over $10 billion dollars. The home video market is over $24 billion dollars. If everyone was a pirate, shouldn't that be zero? Flawed logic, I know, but these are still thriving industries despite the fact that "most games" and "most movies" really just aren't special to begin with. What's changed is how we choose to experience our media. We want movies that can be enjoyed in our home theater, airplane, or portable music player. We want security where a hard drive crash or malicious virus doesn’t mean that we’ve lost the digital content we've purchased with our hard-earned money. If our hardware is capable of enhancing the original content such as upsampling beyond 1080p, then let the consumer do so.

The industry needs to recognize that most people are... human. We may tell a store clerk they've given us to much change back, but our hunter-gathering DNA makes us look for bargains. Who among us hasn't jumped at a chance to stack multiple coupons or shopped at a clearance or special limited quantities sale? The promise of "free" movies and music is one that is hard to give up. When the CEO of Time Warner admits that his kids illegally downloaded music off the Internet too, it should show the industry that software piracy isn't something limited to l33t hax0rs. That doesn't mean everyone jumps at the opportunity of a five-finger discount at your local Best Buy though.

People are reasonable. The difference is that intuitively, stealing a physical item from a store is fundamentally different from copying bits in which the opportunity cost to the manufacturer is zero.

The Fundamental Issue

The general public just doesn't appreciate the true value of intellectual property. You can list off a ton of famous actors and directors, but how many famous screenwriters (who aren't directors or actors) can you name?

The HDCP Vision

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The problem with DRM is that it hasn't been done correctly to date. Every implementation of DRM has only hurt honest users. More frustrating is that HDCP should have been the first to prove that DRM could be done in a reasonable manner.

The original idea of HDCP was to stop casual copying of high-definition uncompressed digital video. Since the decryption/encryption had to be done in real-time, the goal was to make the algorithm simple. The fact that HDCP has been demonstrated by computer science researchers to be easily compromised provided that a handful of keys are leaked isn’t an issue. However, HDCP itself remains secure because its security is tied into licensing.

You can't buy the HDCP keys unless you agree not to use it in a recording device. The keys themselves are located in hardware, making it more difficult for casual users to crack. Movie studios were saying "we won't release digital HD content unless you electronics manufacturers guarantee that you won't build digital recording devices." The crypto ROMs, etc. were just ways to make this gentlemen's agreement formal.

In exchange for this gentlemen's agreement, enforced by relatively low-cost crypto ROMs, consumers should have been able to transparently enjoy HD content. Yes, early adopters of televisions would have to buy new TVs, but with HDCP, "advance warning" was available. Figuring out how to transcode content to portable players or other formats (i.e. a desktop PC or media server) would have been something to be addressed in the future (ultimately resulting in AACS and BD+). Remember, HDCP was simply intended to limit the creation of a high-definition VCR capable of recording “protected” content.

What ended up happening was that the graphics board manufacturers betrayed our trust, HDCP handshake protocols have been poorly implemented, and HDCP ended up being far from that “seamless” integration.

"Perfect DRM" already exists today. Perfect from both the perspective of consumers and the industry.

Perfect DRM

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It's called the printed book. As big as the video game industry is, the book industry is bigger. Last year, Barnes & Nobles, Borders, and Amazon pulled in $11.5 billion in terms of book sales (this isn't including sales of coffee or non-book items in these stores). Add in the sales of Wal-Mart, Target, and local independent retailers and you'll have to agree that it's still a big market even in today’s age.

Go to any Barnes and Nobles and you'll see a ton of people reading for free. Someone might walk into a B&N, pick up a magazine and read it cover to cover, or even pick up a self-help book, and read it while taking notes on a separate sheet of paper. Sometimes, you might actually buy a book when you want to enjoy re-reading the material at home, or if you want it as part of your collection. Books are cheap. Hardcover books are more expensive than paperbacks; and art books may be the most expensive of them all but the print quality and binding makes it all worth it.

Casual copying is possible but not easy. There's nothing stopping me from photocopying a whole book cover-to-cover, but very few of us have stacks upon stacks of copied books. It's too inconvenient to copy something when it's cheap enough to buy. Likewise, everyone has taken a class or two where the professor hands out a photocopied textbook chapter, recognizing that students are unlikely to find value from the rest of the textbook or beyond the term.

If a book publisher thought like the movie industry and wanted to prevent casual copying of a book, they would have made every page black text on a red background. It'd be so hard to read and intrusive that no one would ever buy a book again.

Finally, all of us can name plenty of famous authors. We recognize the effort and time an author has put into his work and may purchase a book in order to support an author in the hopes of seeing a sequel, even if only in theme.

The Difference Between Books and Movies

That's the predicament of digital music and digital video right now. Unprotected content over large BitTorrent networks is akin to having a Star Trek replicator. In order to have a DRM model that parallels the book model, you have to make copying music and movies as tough as photocopying a book.

Hollywood studios shouldn't panic about sites like YouTube or even the torrent sites. I can see the problems with leaked prerelease copies of shows like 24, but after a show has been broadcast, it’s hard to make a reasonable common-man standard against sharing of the recording. You can already get the full book experience for free, and it doesn't stop people from buying books to support their favorite authors.

The next step is appropriate pricing. There's something wrong when a soundtrack CD costs almost as much as the entire movie on DVD. In countries like China, where pirated CDs can be bought by the pound, Hollywood has tried releasing lower-priced DVD movies with good success. Again, most people are reasonable. Just look at iTunes when it comes to music. DVD movies and DVD television shows continue to have good sales thanks to bonus features like behind the scenes footage, or commentaries. Many people without a HDTV prefer DVDs for the 16:9 widescreen experience. As long as there is added value (think hardcover book) or convenience, physical media will continue to thrive.

The biggest hurdle will be promoting authorship. In books it's easy. In the movies, it's hard to get people excited about buying a DVD or Blu-Ray/HD-DVD to support the actor who already makes $20M a movie, or the director who's first in line for that latest supercar. People never hear about the screenwriters who may only get $100K for the first draft of their screenplay and another $30K for their second draft. Since a screenplay can take several years of work, many writers are making less than minimum wage. I challenge you to name ten successful screenwriters. Do you know who Terry Rossio and Ted Elliot are? What about Felix Chong and Siu Fai Mak? David Koepp?

Promoting the screenwriter also serves an additional purpose. Right now, it's easy to see the actor's work and even the director's work. It's tangible and direct. What's often lost is the contribution of the screenwriter. I'm not talking about the dialogue (ultimately only a minor element in the grand scheme of things) but in terms of the story, character, and theme. These are purely concepts of intellectual property.

Until Hollywood can turn screenwriters into celebrities too, they'll never be able to convince the public to buy movies even if they can enjoy it for free in the same way the public buys books even after reading it for free.

The solution to movie piracy isn't fancier and more complex copy protection, it is bringing screenwriters, the creators of Hollywood's most conceptually-pure intellectual property, to the center stage. Only when Hollywood recognizes the value of pure intellectual property will consumers also recognize the true value of intellectual property and support their favorite screenwriter.

Why I'm hopeful

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In some ways, the HD ecosystem is going to buy time to help DRM reach that magic steady state that we enjoy with books. With HD movies requiring huge amounts of space, there's already a barrier to casual copying if only for HDD space issues. The HD-DVD rips that have been unleashed onto the Internet still represents gigabytes and gigabytes of storage. As bandwidth and HDD space increases, technologies such as BD+ potentially will maintain sufficient copy protection to prevent casual copying while still ensuring that the optical disc is a) not counterfeit and b) can be used for managed copy (allowing you to transcode the content to portable players). Potentially being the key phrase – the industry has had rough enough start with HDCP.

People buy more DVDs than music CDs because they see it as a better value. Fortunately, HD content remains aggressively priced. Although Blu-Ray and HD-DVD products are more expensive than DVD products, prices will see more parity as production ramps up and more consumers transition to HD. DVD players launched at $1000 (FiringSquad’s retired Editor-in-Chief Kenn Hwang spent that much on his Sony DVP-S7000) and by 2009 there will be no more analog TV in the United States.

I'm even hopeful about Hollywood increasing the visibility of screenwriters in the industry. As movies like Fight Club and TV shows like 24 and Heroes continue to push the envelope of storytelling and captivate an increasingly sophisticated audience, writers are increasingly forced to write more sophisticated movies. A screenplay from a 1990's Van Damme movie wouldn't fly today. Would any movie which uses "it was just a dream" as a plot device work today? Only if it's told like A Beautiful Mind. The elite group of screenwriters who are capable of writing such movies is relatively small, and that is good news because it means Hollywood only needs to spend a lot of money on a few number of people. So if anyone you know is a creative executive at a studio, debate with them why stories like Thank You For Smoking, Good Will Hunting, Napoleon Dynamite, Pirates of the Caribbean, Finding Nemo or God forbid, Titanic were more successful than Stealth, Lady in the Water, Basic Instinct 2, Poseidon, and Flushed Away...