Digital Rights Management

The Internet has changed the way individuals receive music, movies, news and other forms of information, putting pressure on existing copyright laws. With the advent of peer-to-peer (P2P) technology -- an Internet-enabled form of distributed computing -- and portable digital media devices like Apple's iPod, the entertainment and consumer electronics industries are frequently pitted against each other. This creates new business models, or new lobbying strategies to change copyright laws, or both.

Introduction
As more consumers decide to purchase content online, business models must take into account consumer demands for quality, affordability, availability and interoperability. Some in the industry have already moved towards addressing these demands, including London-based EMI Group’s recent decision to sell higher quality music – without Digital Rights Management restrictions – on Apple iTunes online music store for $1.29, instead of the normal $0.99 per-song price.

Digital Rights Management and Peer-to-Peer Filing Sharing
As the entertainment industry blamed peer-to-peer (P2P) services for piracy and lost record sales, they took legal action against Napster, Bit Torrent, Kazaa and Gnutella and other P2P services. Although lower courts provided mixed decisions, the U.S. Supreme Court sided with the entertainment industry in the 2006 decision MGM v. Grokster. The court found that Grokster could be held liable for the copyright infringement of its users because it did not do what it could have done to restrict users’ ability to trade digital files. Meanwhile, the RIAA began an aggressive strategy of suing their customers, sending pre-litigation letters requiring significant monetary settlements for engaging in copyright infringement. Music, movie and software companies alike have begun more aggressive uses of anti piracy technologies known as Digital Rights Management (DRM). Companies deploying such technologies to “lock” their digital wares have the ability to take enforce those digital restrictions under the 1998 Digital Millennium Copyright Act.

Since then, Napster went out of business; its name was bought by a new company that struck licensing deals with record labels. Bit Torrent also settled with entertainment companies. It agreed to use copyright filters to thwart the trading of pirated content by its users.. Now, however, streaming video clip sites have now taken on the burden of lawsuits. The most recent suit is Viacom v. YouTube over infringing video segments on their Web site. The owner of Comedy Central, BET, and MTV sought $1 billion. Despite the fact that the alleged infringing content had been posted by users, and taken down upon notice by Viacom, the suit insisted that users continued to post unauthorized content of television programming and films and that YouTube failed to take reasonable measures to prevent infringement. The case may demonstrate the reach of the Grokster decisionAs a result of the suit, Viacom snubbed Google, which owns YouTube, and a multi-year advertising deal with Viacom went instead Yahoo.

The DRM debate has reached new grounds as consumers and digital media services have complained that anti-piracy technologies restrict the ability for users to move digital content from one device to another. DRM opponents argue that such technologies deter consumers from going online to purchase digital media. Other problems include slow download times, lack of diverse content or complications in moving legally downloaded content onto a portable media player like an iPod or a Zune.

Related SourceWatch resources

 * See the other articles at the Telecommunications and Intellectual Property Legislation portal.