Introduction

When it comes to music, there are four main players in the world: Universal, Sony BMG, Warner and EMI. They distribute roughly seventy percent of all music worldwide.  Music is an asset, property they fight to sell and protect. Armed with Digital Rights Management (DRM) technologies, these companies placed restrictions on digital media in their own interest and the interests of other interested parties (such as copyright holders, artists, investors, and producers). For roughly the last six years, music companies have deployed DRM technologies in an attempt to control use, plus contain unauthorized distribution of their music assets. Their mission: to prevent unauthorized access, copying or conversion of digital music.1

The more DRM was implemented by those seeking to protect their rights and property, the greater the outrage of consumers, including myself and my friends. A war began. Battles over fair use, accessibility, and rights began. From the common man who couldn’t figure out how to play a purchased track on a new device (and so called customer service) to the hacker who ripped music without paying for it, battles ensued. Fights raged on as consumer rights were violated by security holes caused by undercover DRM operations and frustrations grew. A costly battle, the entertainment industry has begun to retreat. Drained financially as a result of the battle, they’ve learned through experience that DRM technologies increase customer service requirements and fail to fully protect audio assets. Thank God.

History

The history of DRM is laden with controversy. DRM was first introduced for music on CDs and later for tunes available online as downloads. Its presence stirred up the marketplace. Protected CDs could not be played on all CD Players and downloaded tracks were restricted to specific computers and audio players. This frustrated me and other DRM opponents, like my friend Rob Linnenkohl, who along with other critics began referring to DRM as "digital restrictions management." The Executive Editor of ZDNet, David Berlind called it “A load of CRAP,” as stated in a video posted online. I agree with his use of the acronym: CRAP stands for "Content Restriction, Annulment and Protection."2

DRM was first tried on CDs in 2002 by BMG, Arista and RCA, In some cases, DRM restrictions frustrated fair use. This outraged consumers and ignited hackers. Most everyone I’ve spoken with about DRM over the years has tried to surpass it in one manner or another. Like heat-seeking missiles and machine guns, we the public rapidly deployed tools and methods to confront DRM:

-   Holding down the "shift" key while inserting a CD or disabling the Autorun feature can bypass DRM protections;

-   FairUse4WM strips DRM from Windows Media files;3

-   TuneBite saves DRM protected songs to other file formats;4

-   Built-in analog I/O connections in soundcards permit users to record DRM-protected audio;

-   Loading an audio CD and ripping the songs (saving them DRM-free);

-   Converting with NoteBurner M4p;5 or

-   Intercepting data streams to decrypt DRM-restricted files and reconstruct DRM-free files.

Such programs grew quickly in popularity, as did playing and re-recording audio tracks (taking advantage of the analog hole).1  From a legal perspective, Senior Intellectual Property Attorney for the Electronic Frontier Foundation out of San Francisco, CA, Fred Von Lohmann contemplated the DRM controversy early on:

“DRM restrictions are now backed up with the force of law…the fair use doctrine operates as a "safety valve" not just for free expression, but also to mediate the tension between copyright and new technologies. As new technologies develop, courts generally have the first opportunity to apply copyright law to them, with Congress lagging behind. This spares the public, technologists, and copyright owners from having to apply to Congress for a legislative solution for each new technology that is developed. In this way, the fair use doctrine plays an important role in preserving a space for innovation and consumer experimentation, while leaving the final word to Congress…

The MP3 industry is fueled by the reservoir of incentives that arises from another activity considered to be a fair use: "space-shifting." Millions of Americans have a large music library of CDs. Technology companies have an incentive to develop devices that will help the music lover to get more value from the CDs she has already purchased. The Apple iPod, for example, emerged to meet that demand.

In other words, wherever an activity has been deemed a fair use (and often even before, so long as a company is willing to gamble that it will be deemed a fair use), innovation flowers as technology companies help the public to make the most of copyrighted works…

Unfortunately, fair use cannot be defined with precision.  In determining whether a challenged activity qualifies as a fair use, courts employ a multi-factor balancing test, including a consideration of:

1.    the purpose and character of the use, including whether it is commercial or noncommercial;

2.    the nature of the work (e.g., factual works are entitled to less protection than purely creative works);

3.    the amount and substantiality of the portion of the work used;

4.    the effect of the use upon the potential market for the work.

While the "four factor test" set out in Section 107 of the Copyright Act is widely known (at least in legal circles), the role of fair use in the copyright system is somewhat less settled. Attention to three aspects of fair use "in the real world," however, are worth considering in some detail here: (1) a wide variety of activities depend upon fair use for legitimacy; (2) the ambiguous, case-by-case nature of the doctrine is central to its role in mediating between new technologies and copyright; and (3) fair use has served as a catalyst for innovation and a buttress for competition.”6

After reading Fred von Lohmann’s contemplations, my friend Scott Ford, corporate attorney for SoBran, Inc., better understands the controversy. Expressing relief that he only recently bought his first music player, he continued to expand on the concept of fair use in his own words, “if potential misuse threatens income and a company can afford it, they’ll go to all measures to protect their assets. Those measures include strategies in the in the playing field as well as the court of law.”

Points of View
The war over DRM erupted quickly. Consumers demanded free use of their music, according to their own terms and took action. I stopped buying music almost entirely, turning to the radio and already owned CDs. Clever consumers, pirates and hackers found ways to freely use and distribute purchased music or steal it. Companies went on the defensive and so did we; CD and music download sales declined as pirating escalated. Sony took things a step too far when they strengthened DRM protections offensively. By 2005 Sony BMG began secretly installing a rootkit on users’ computers (intending to prevent copying and control playback on Windows computers). The rootkit created security vulnerabilities. Consumers went to court to protect us from invasive DRM technologies and won. After several class action lawsuits, Sony was ordered to provide software patches, free CDs, a cash payout or DRM-free album downloads to affected customers.7

Customer support costs rose higher for the big four as the war waged.  By January 2007, EMI Group (British EMI Music) stopped publishing audio CDs with DRM, stating in a press conference that "the costs of DRM do not measure up to the results." Major publishers no longer release audio CDs featuring DRM and have been rapidly moving towards removal of DRM from online offerings.8


Case Studies

Have the Big Four finally waved the white flag? Rapidly, online retail giants have retreated from DRM for music downloads. Let’s review a few case studies to gain an understanding of marketplace changes. The last publisher to discontinue DRM for CDs became the first to abandon file protections for downloadable music. EMI announced plans in early 2007 to provide DRM-free music online:

“the music label announced that it would begin selling DRM-free tracks through the iTunes Store, making EMI the first major label to forego file protections. At that time, EMI emphasized that the DRM-free deal wasn't iTunes-exclusive and that the company was looking to expand its partnerships to other music sites as well.”9

EMI is one of the Big Four record companies, making it among the largest in the world. Other significant players began to follow suit. Ars Technica’s Eric Bangeman suggested in 2007 that record labels were:

"slowly beginning to realize that they can't have DRMed music and complete control over the online music market at the same time... One way to break the cycle is to sell music that is playable on any digital audio player. eMusic does exactly that, and their surprisingly extensive catalog of non-DRMed music has vaulted it into the number two online music store position behind the iTunes Store.”10

Apple's Steve Jobs called on the music industry to eliminate DRM in his early 2007 letter Thoughts on Music: “Apple will embrace this wholeheartedly.”11 I remember hearing of this letter and sighing in relief at the balm being placed on the wounds of consumers. "We have always believed that music should be accessible and DRM-free," Apple's Chris Bell reinforced at Macworld: “This is the right direction for the future." Bell is director of worldwide marketing for iTunes.12

iTunes, Musicdownload.de, and Amazon.com, online music retailers have actively encouraged the Big Four to wave the flag in surrender. I’ve cheered at their retreat:

-   Apple's iTunes now sells FairPlay DRM tracks for $.99 and DRM-free ones for 30 cents more (millions of DRM-free songs from over 12,000 record labels).

-   In March of 2007, Musicload.de (popular in Europe) announced that “three out of every four calls to [their] customer support phone service are as a result of consumer frustration with DRM.”13

-   Amazon quickly moved to offer over 3.25 million DRM-free tracks in their library. In his January 10, 2008 online article, Amazon Completes DRM-Free Roster with Sony-BMG, Erick Schonfeld commented, “Amazon looks to be the first online music distributor to strike a deal with Sony-BMG. It will also be the first online music store to offer DRM-free songs from all four major labels, having previously struck deals with Warner, EMI, and Universal Music.” 14

While iTunes, Musicload and Amazon prepped to blaze new trails in 2007, others kept their flags planted in the battle to maintain DRM. Napster and Wal-Mart were both late to offer DRM-free alternatives, waiting until 2008. Not only may that, but customers still captive to their previous DRM platforms suffer loss. I’m glad they’ve embraced DRM-free, but is seems forced. Also, their transition methods may constrain customers who purchased DRM protected tracks. Purchased tracks with DRM should playable for as long as consumers who own them them want to play them. What a disappointment that those tracks may become useless as DRM is abandoned.

Napster

Napster “released a new version of its music store offering 6 million DRM-free tracks” reported Tom Lee in his May 2008 article, Collapse of Music DRM Continues; DRM Customers Still Screwed  for Techdirt “Customers who were foolish enough to purchase DRMed content from previous versions of Napster are stuck with their decision. They don't get to update their content to MP3 format, and while Napster has decided to continue running its "license servers" for now, it's only a matter of time before Napster decides running those servers is more trouble than it's worth and shuts them off, cutting customers off from their music libraries entirely.” 15

Wal-Mart

In 2007, Amy Colella, a Walmart.com spokeswoman said the company has yet to decide its next move, "We know digital music interoperability is important to our customers and continue to evaluate these types of opportunities."16 By October 2008, Wal-Mart had discontinued DRM and declared that their DRM servers would be shut down, leaving customers unable to transfer previous purchases.

“That’s total CRAP,” my friend and associate Rob exclaimed in irritation, when presented with the news during an interview with me. My reaction concurred, as did that of many others. After rapid-fire emails from irritated music download customers, Wal-Mart issued the following retraction via email:

“NOTE: This is a follow-up to our email titled “Important Information About Your Digital Music Purchases” from 9/26/08.

Based on feedback from our customers, we have decided to maintain our digital rights management (DRM) servers for the present time. What this means to you is that our existing service continues and there is no action required on your part. Our customer service team will continue to assist with DRM issues for protected windows media audio (WMA) files purchased from Walmart.com.

While our customer support team is available to assist you with any issues, we continue to recommend that you back up your songs by burning them to a recordable audio CD. By backing up your songs, you insure access to them from any personal computer at any time in the future.

We appreciate your support and patience as we work to provide the best service possible to you. As we move forward with our 100% MP3 store, we’ll continue to update you with key decisions regarding our service and your account via email.

Thank you for using Walmart MP3 Music Downloads.

The Walmart Digital Music Team” 17

Interviews, Observations & Evaluation

At least there is hope. What are overall the opinions of those interviewed? Robert Linnenkohl is strongly against DRM. It has been an inconvenience to him as consumers. We have that in common; having both waged our own war to defend against ‘unfair restrictions.’ Robert spent a lot of time on customer support calls before reverting to buying only CDs “then ripping the tracks.” We are still irritated by tracks purchased online in the past that cannot be played on all computers and devices. We each own more than one computer and upgrade frequently. Rob agrees that authorizing each computer is a “pain in the butt.”
My neighbor, attorney at law Scott Ford entered the downloadable music scene late, in fall of 2008. I warned him in advance to only buy DRM-free tunes. He is “very glad” to have avoided that pitfalls friends complain about and was surprised to hear about the DRM controversy. Recently, he traveled to Tuscany, taking an iPod with him. He easily transferred music (fairly purchased) from his computer to audio devices and to CDs with “no worries” about restrictions or prompts for authorization. Fortunately, he sees online music downloads as a “world of freedom” that he can hardly imagine waiting this long to embrace. Rob wishes it would have been “that easy for him” and I echo the same sentiment. Thank goodness that during the last three years, industry giants have increasingly shifted away from DRM. The DRM war is coming to a close. As for me and my friends, we are happy to have won the battle.

Summary
In his 2007 letter Thoughts on Digital Music, Steve Jobs encouraged Universal, Sony BMG, Warner and EMI “to license their music to distribute legally over the Internet… to create a truly interoperable music marketplace.”11 The Big Four listened with reservation, insisting on DRM. When consumers resisted, a war ensued. We fought loudly with our ingenuity, lawsuits, and increased calls to customer support. The war is ending with consumers victorious. The Big Four and their popular online retailers have backed down to save their own hides (bottom lines). Soon DRM will truly be a relic of the past. I am so bold as to assert it the war has ended with consumers victorious. The battlefields are simply being cleaned and cities rebuilt. My hope and the hope of my friends Rob and Scott is that memorials are never erected in remembrance of the war.

References

1.    Baase, S. (2008). A Gift of Fire. (3rd Ed.). Upper Saddle River, NJ: Pearson.

2.    Berlind, David. ZDNet. “A load of CRAP.” 2007.

3.    Unknown. “FairUseWM.” Internet.2008.

4.    Unknown. “Tunebite.” Internet. 2008.

5.    Unknown. “Noteburner.” Internet. 2008.

6.    Von Lohmann, Fred. “Fair Use and Digital Rights Management: Preliminary Thoughts on the (Irreconcilable?) Tension between Them.” Computers, Freedom & Privacy. Internet Article. 2002.

7.    McMillan, Robert. "Settlement Ends Sony Rootkit Case." PC World. Article. April 8, 2007.

8.    Goodman, Andrew. “Digital Rights Management (DRM) Technology.” Internet Article. June 04, 2007.

9.    Cheng, Jacqui. “Amazon announces long-rumored DRM-free music store.” Ars Technica. Internet Article. May 16, 2007.

10.  Bangeman, Eric. “EMI goes DRM-free on iTunes Store.” Internet Article. April 02, 2007.

11.  Jobs, Steve. Thoughts on Music. Internet Letter. February 6, 2007.

12.  Cohen, Peter and Dalrymple, Jim. “iTunes 7.2 supports DRM-free 'iTunes Plus' music.” Playlist Magazine and Mac World Internet Article. May 30, 2007.

13.  Staff Writer. “DRM and Internet Music” Tuneclone. Internet Article. 2007.

14.  Schonfeld, Erick. “Amazon Completes DRM-Free Roster with Sony-BMG”, Article January 10, 2008.

15.  Lee, Tom. “Collapse of Music DRM Continues; DRM Customers Still Screwed for Techdirt.” Article. May 2008.

16.  Sandoval, Greg. “Apple and Amazon key to DRM-free music.” CNET News.com. Internet Article. 2007.

17.  Walters, Chris. “Walmart Decides To Honor DRM-Protected MP3 Purchases After All, At Least For Now.” Internet Article. Oct. 10, 2008.


Appendix

1.    Linninkohl, Robert. Production Manager. Computer Sciences Corporation. In-person Interview. December 2008.

2.    Scott Ford, Esq. Attorney At Law, SoBran, Inc. In-person Interview. November 2008.

3.    DefectiveByDesign.org, FSF campaign to end DRM.

4.    Opposing Digital Rights Mismanagement, Richard Stallman interview by BusinessWeek Online about DRM.

5.    Reaction to the DRM clause in GPLv3, blog by David "novalis" Turner.

6.    Free software without the freedom?, blog by John Sullivan about DRM.

7.    CE-Oh no he didn't! Part XXI : Gates tells consumers to ditch DRMed tunes, buy CDs by Cyrus Farivar, posted Dec 14th 2006 at 9:09PM.

8.    "Apple Unveils Higher Quality DRM-Free Music on the iTunes Store". http://www.apple.com/pr/library/2007/04/02itunes.html. Retrieved on 2008-09-13.