This Insanity Has to Stop

The idea behind copy protection is admirable, in a Plato's Cave sort of way. Ideally, all of this trickery would foil any and all attempts to make unauthorized copies of the material on the disc, while proper, paying customers could watch their movies, play their games, and enjoy whatever other content is on there without as much as a hiccup. This ideal state of affairs is just a dream, though.

When Sony (NYSE: SNE  ) designed the Blu-ray disc standard, it built multiple layers of copy-protection into the format. Hollywood loves this stuff, and the extra protective measures may have helped decide the Blu-ray versus HD-DVD wars. Sorry, Toshiba, your standard wasn't obtuse enough. More on that in a moment.

The latest evidence of this restrictive security model's ultimate failure comes from Samsung, where the firmware (software required to run the player) for some of its Blu-ray players needed an update in order to "improve a specific BD title's playback capability." This in itself is a needless hassle created by a flawed standard, but it gets better. Worse. You know what I mean.

That seemingly benign update promptly disabled many titles from two leading content providers: Time Warner (NYSE: TWX  ) subsidiary Warner Bros. and Vivendi/General Electric (NYSE: GE  ) property Universal Studios. Somewhere in the process of improving the experience with one title, several others were broken.

Who's to blame?
I don't blame Samsung for anything other than shoddy quality assurance testing before publishing this update. Blu-ray is an insanely complicated standard, and I'm frankly surprised that the players work as often as they do. Roll back to the previous update instead, and you'll get your Warner and Universal love right back. Besides Samsung, you often have to update the software for Sony's own Blu-ray players to play the latest and greatest new discs. Panasonic (NYSE: PC  ) is in the same boat, as is Philips (NYSE: PHG  ) and Sharp and many others. It's not just Samsung's problem.

Neither is it really Sony's fault. The company did what it had to do in order to appease the studios and win that pesky format war. All is fair at Hollywood and Vine, and Sony took some extreme measures. Congratulations -- you won!

No, the blame for this fiasco falls squarely on Hollywood. It only takes a quick online search to find downloadable copies, ripped right from a Blu-ray disc, of Warner's "The Hangover" or "Inglourious Basterds" from Universal, or pretty much any movie ever released on the format.

Fighting a losing battle
Copy protection and digital rights management is, as the WOPR computer tells Dr. Falken in WarGames, "A strange game. The only winning move is not to play. How about a nice game of chess?" Sure, every new security measure makes the pirates sweat a little bit -- but you can rest assured that they will find a way around it. Who's really suffering? Fully paying customers.

Meanwhile, both studios and their technology partners spend time, effort, and money on these hair-brained schemes that fail in the end. That drives prices up to nobody's benefit, except maybe the security researchers who get paid for doing the dirty work.

So what -- do nothing?
I'm not saying that the studios should simply give everything away for free, and there's even a real-life precedent today for how the issue should be handled: Steve Jobs raised eyebrows when Apple (Nasdaq: AAPL  ) let its iTunes music store run wild and free in the unprotected MP3 format. That show is still playing, and digital music sales never dropped off a cliff. Instead, iTunes is now the biggest music market anywhere -- and iTunes customers get to play their legally purchased songs anywhere the ubiquitous MP3 format is accepted.

If catching or otherwise foiling the pirates is of paramount importance, every download could be watermarked with a trackable code that's invisible to the end user. That way you can catch the perp with a minimum of fuss and effort. Wouldn't that be the perfect outcome?

This is exactly the way to do it: Give consumers a solid reason to buy content because your online store is so much nicer than Pirate Bay, or your selection is unmatched in the industry, or maybe you get a foot massage with that $50 download. Provide something that's better than pirated entertainment, and consumers will leave the scallywags behind in a heartbeat. Pricing isn't everything.

Fourth and goal
I thought Walt Disney (NYSE: DIS  ) was catching on to this fact three years ago, but the House of Mouse still insists on full protection. Warner Home Video head boss Kevin Tsujihara seems to get it, but corporate red tape and decades of unbreakable tradition are holding him back from launching a wholesale revolution. Someday, one of these pockets of sound reasoning will go all out and prove to the rest that today's model is far from optimal.

Have you had enough of this insanity yet, or is digital rights management the best thing since sliced sushi? Discuss in the comments below. You know which side I'm on.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Walt Disney is a Motley Fool Inside Value choice. Apple and Walt Disney are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletter services free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


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Comments from our Foolish Readers

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  • Report this Comment On August 24, 2010, at 12:53 PM, rtavis wrote:

    Having been the victim of this Samsung firmware upgrade (where a fourth of my disks suddenly didn't play), I couldn't agree more. Use a buried tracking number so you can verify pirated disks, but lay off with the DRM. Not only did the firmware update prevent some disks from playing, it was outright crashing the OS of the player. I was 'not happy' with Samsung. They put the firmware out, not Disney. Their responsibility. There was probably a way to roll back the update, but it was not obvious. I sent the damn thing back in for a 'repair', which undoubtedly blew away any profit margin Samsung had made on the unit. Stupid, stupid business practice on Samsung's part.

  • Report this Comment On August 24, 2010, at 1:03 PM, Pentaquark wrote:

    The idea of a traceable watermark could work but, as you say, pirates will find a way around just about anything devised as a copy protection technique. As long as folks are willing to buy an illegal media source and the pirates have a profit to make the real battle has to be finding and punishing them both. It's too bad that the consumer loses the right to backup a copy of media they have purchased legally.

  • Report this Comment On August 24, 2010, at 1:24 PM, pokefuzz wrote:

    You have your facts wrong on Steve Jobs letting iTunes music store run wild and free in the unprotected MP3 format. All music on iTunes is still sold on the proprietary AAC format, but without DRM. Also, Amazon started selling songs in MP3 format without DRM much before Apple. Apple was a holdout in this case.

  • Report this Comment On August 24, 2010, at 2:03 PM, XMFShirKi wrote:

    I've had enough of the insanity. Check out:

    http://www.defectivebydesign.org/

  • Report this Comment On August 24, 2010, at 2:12 PM, TMFZahrim wrote:

    Pokefuzz, yes Amazon beat iTunes to the punch. But at the time, Amazon MP3 was almost laughably small -- Apple's move mattered more by furlongs and bushels when it finally happened. You got me on the AAC point though. Still, the point wasn't which exact format Apple uses but the fact that it's DRM-free these days. (Android gadgets can play unprotected AAC files too, for example.)

    Anders

  • Report this Comment On August 24, 2010, at 2:22 PM, dargus wrote:

    The iTunes DRM was never hard to get around. They always allowed you to burn songs to a CD, but I think in the beginning they may have limited the number of times this could be done per song, and it could then be ripped from the CD as an MP3. I never hit any restrictions when doing this myself. While I think this technically made me a pirate, Apple knew full well its songs weren't really protected, and I'm fairly certain they also realized this was a positive for them. I suspect if not for the RIAA they'd have forgone DRM right from the start, rather than providing a very simple backdoor around it.

  • Report this Comment On August 24, 2010, at 3:22 PM, stan8331 wrote:

    "Provide something that's better than pirated entertainment, and consumers will leave the scallywags behind in a heartbeat."

    Absolutely.

    What's unfathomable to me is that seeing how the RIAA has run the music business into the ground, the movie studios are intent on copying THAT example. Treating your paying customers like crap to provide an extremely minor inconvenience to pirates is absurdly bad business, but these genius executives seem determined to follow that path.

  • Report this Comment On August 24, 2010, at 10:59 PM, reflector wrote:

    DRM is not digital rights management, it is digital RESTRICTIONS management.

    DRM exists not to give you rights, but solely to limit what you can do with content you've legally purchased.

  • Report this Comment On August 24, 2010, at 11:00 PM, Acorn17 wrote:

    While piracy is clearly detrimental in the US to media producers, there is a twisted sort of benefit that they derive from overseas piracy (which is detrimental as well, but creates a paradoxical upside). It virtually guarantees that there will NEVER be a competitor to Holywood, or any of the big US music shops that could possibly come out of Asia or the rest of the developing world. it's impossible. The US and Europe pour so much $ into entertainment that flows where? -- straight to US media producers -- because it is bought for high prices legally. It's the same stuff that's sold for the cost to burn a CD or DVD on the street in Asia. This has 2 effects -- 1) Asian media producers can't sell their stuff anywhere for a profit which keeps their profits low, and guarantees that they will never compete on quality offerings, and 2) guarantees that everyone in Asia and the developing world watches poorly dubbed copies of western movies reinforcing Holywood's brand for generations. Ironically, it guarantees a lockdown on the world entertainment market for US media producers and consequently advertisers. In some ways it's to their benefit to allow things to run along and boost customer experience as you suggest Anders. Then if other countries ever get their IP house in order, the US shops will have such a huge catastrophic first mover advantage that they will clean up wherever this occurs. They already have "free" publicity.

  • Report this Comment On August 25, 2010, at 4:59 AM, TMFZahrim wrote:

    reflector,

    Oh yes. Digital rights management is right up there with "benign tumor" and "Microsoft Works" on my list of favorite oxymoronical euphemisms. The only "rights" being managed are those of the content publishers, and even then I'd argue that they are reading the copyright section of the constitution the wrong way.

    Or maybe they're just holding it wrong?

    Anders

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