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Digital Rights Empowerment

Pablo García Arabéhéty works on New Media issues for music-industry trade group in Argentina, the local version of the RIAA. He wrote this piece last week as an op-ed, but it was a bit too far down in the intra-industry weeds for us to run it in the newspaper. In light of Monday's news from EMI, though, it's extremely timely. Therefore, with his permission, I'm publishing a copy-edited version below. The views are his own, not those of his employer. My goal is not only to share some interesting thinking on the DRM issue, but also to remind readers that the seemingly monolithic "music industry" comprises many different people with minds of their own. I also want people to see that I'm not the only person who writes long pieces about DRM. Heck, I'm a piker next to Pablo. But please, read on here and after the jump.

It might have been because of some tough lawyers. Maybe not. But the fact is that we have let people with an "enforcement" approach lead the most radical transformation the music industry has ever gone through. The result is that in the last years the music industry has been trying to preserve rights instead of selling music. The most notorious outcome of this biased priority has been the blind bet many industry players have placed on DRM. A new focus on these issues through Digital Rights Empowerment, or DRE, might bring innovative answers.

Individual law enforcement has very little to say when social practice breaks into scene. When a certain course of action is practiced repeatedly by a huge number of people, lets say millions, a legal enforcement strategy becomes inefficient and ineffective. An illegal practice that spreads worldwide -- call it "fashionable" -- means that deterrence has already failed, no matter its illegality or immorality. Of course, this does not mean that fashion makes this activity automatically legitimate, but it gives us important clues about how to deal with it. In a context like this, taking individuals to court might be a rewarding gymnastic exercise for lawyers but it is certainly a great diverting strategy for the music industry. The reason we are wondering about our future in the short term is not the defiance of property rights by 14-year-old female criminals, but a much more simpler one: swapping songs for free through the Internet has become very fashionable. Courts are no place to fight fashion, if it should even be fought.

Fashion cannot be addressed through individually aimed actions. Fashion is an enigmatic phantom against which the only effective magic potion can be policy: action aimed towards aggregated behaviour. But, what policies has the music industry implemented so far? Apart from chasing individuals who are really the consequence and not the cause of the "problem," its main policy has been an attempt to eliminate the factual possibility of file swapping over the Internet. Filing lawsuits against companies which set up file swapping networks has been part of the initiative, which has proven to be flawed in the decentralized environment of Internet. Like the tail of a lizard, when cut, a new tail grew immediately. Apparently plenty of computer programmers are willing to fulfill the mandate of fashion by providing new means for file swapping. Illegal swapping networks are today one of the biggest source of music distribution in the world with 20 billion songs downloaded yearly according to the IFPI's latest Piracy Report.

On the other hand, this enforcement policy has been taken one step further and away from the courtrooms with DRM. Digital Rights Management environments were created to prevent by technological means unauthorized usage of protected material, and to keep digital sales from fueling the vast universe of illegal file swapping. It was a step forward, the music industry fighting illegal distribution on its same digital ground. That fashionable activity had now a legal alternative. Anyhow, soon the DRM scheme seemed to fit the logic of "selling ice to Eskimos": Why should file swappers pay for what they can still do for free? DRM advocates' answers ranged from the deterrence generated by massive lawsuits and the approaching music Apocalypse to moral arguments about importance of just remuneration and fair trade. Moral or utilitarian, these answers came from the "stick" side, but what about the carrot?

Evidently, besides preserving rights, DRM designers forgot to add value to the scheme. There are few incentives, not to say none, for music fans to abandon unauthorized file swapping networks for DRM environments. Music fans have far much less control over the songs they obtain legally in DRM environments than the ones they obtain through illegal file swapping. At the same time, the volume of illegally swapped files demonstrates that issues of poor sound quality, erroneous tagging, or security breaches are irrelevant for the users of these decentralized networks. The case of Apple's iTunes backs these ideas. Apple has been the only company able to create a strong incentive to drive music fans to its DRM store: the iPod. Nonetheless, despite its great traction as the no. 1 digital music player in the US, only 3% of the content stored in iPods is purchased from iTunes. As the iPod case reveals as well, the problem of interoperability is secondary. Imagine an idyllic moment where all DRM platforms became interoperable and seamless for consumers: we would still have the problem about the lack of incentives.

So in a context where the fashion of song swapping is expected to persist for many years, policies based exclusively on enforcement seem condemned to fail. The production of incentives for driving music fans massively towards paid digital music business models is a key issue which few people are addressing. If we want the music industry to blossom in the digital era, we must make people desire to be a part of it. But DRM, as it is, not only is not tempting for people who like digital music, but is also making more difficult the development of some of these new businesses as it diminishes value for consumers.

DRM certainly is a necessary part of the development of music industry, but it must be subject to the main task of adding enormous value. Focus must be set on what unauthorized file swapping networks will never be able to provide. Of course this last point is open, but I believe that settling strategic development partnerships with other cultural industries might be an excellent starting point. What about creating integrated business models where, for example, users could tag and download music they listen to on TV, program their favorite songs in a bar through their cell phone, or have enhanced involvement in music-related shows? The first consequence of this value-empowering strategy would be preserving rights which today have been socially abolished. DRM environments are needed for these value-adding strategic partnerships. This is what Digital Rights Empowerment might be about.

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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