Don’t Give up on Audio DRM!
Originally March 2007, Updated January 2008

In this article I discuss the reasons for Audio DRMs failure to date, the consequences this has had, and I propose a solution. This article challenges the conventional viewpoint that Audio DRM is dead and buried forever.

Intro

The year 1997 saw the release of Winamp, the first major software program for playing MP3 files and ripping CDs on the PC. The first hard drive digital audio players (DAPs) also began to appear that year. In late 1999 the first music filesharing network, Napster, was released and the popularity of digital music playback on personal computers rose rapidly. DAP popularity took off with the 2001 release of the stylish and easy to use Apple iPod, which supported both MP3 files and a newer higher quality format called MP4 / AAC. Today, the iPod remains by far the most popular DAP, and it has replaced personal computers as the most popular playback tool people use to listen to digital music.

In 2003 Apple, working with the record companies, opened the iTunes Music Store selling digital music protected by DRM. Enjoying a near monopoly, Apple naturally chose a proprietary DRM format which locked consumers into Apple Hardware & Software.

In 2004 Microsoft followed with the competing PlaysForSure DRM which was supported by a number of non apple devices and manufacturers. Sony tried a DRM of its own which was later abandoned. Microsoft created yet another DRM for its Zune player in 2007. Nevertheless, the iPod's domination of the market has left all these competing DRMs so far largely irrelevant.

Even Apple’s market leading iTunes store selling DRM protected music remains relatively unpopular in term of sales. A recent study calculated that despite years of dramatically falling CD sales, the UK average spend per head of population on digital audio downloads comes to just 79 pence annually. Today most users download, or swap with friends, illegal audio copies. Even scanning physical CDs remains more popular than buying digital tracks online. The old mp3 format, the only format shared by all players (both DAP and computer), dominates the market.

Consumer complaints about Apple’s DRM include: (a) The music files can only be played on an iPod or in the iTunes program. (b) At 128kbps the iTunes DRM files play at significantly below CD Quality. (c) By ripping an existing CD or obtaining an mp3 from the internet etc the consumer can obtain the same product in a more convenient unlocked format for only a modicum of effort and no cost.

Audio DRM was dealt another hefty blow when programs recently came onto the market that allow consumers to break into the Apple and Microsoft DRMs and convert them into unprotected files. These DRMs are both rather insecure, but the fact remains that although it is possible to encrypt data a perfect DRM is difficult to achieve. Even decrypting the data inside a conventional Smart Card can not provide protection because the data has to leave the card and pass onto a decompression algorithm and a Digital to Analogue Converter - and at this point the data could be intercepted. Eavesdropping HD DVD signals, for example, is deterred by kernel mode drivers and HDCP compliant digital connectors, but these complicated techniques struggle to provide real security. The highest levels of security would only be possible only by embedding a Secure Cryptoprocessor / Decompression / DAC chip with tamper-resistant properties and only analogue outputs into the device. A pirate could still make an analogue recording in real time, but that is a less significant threat.

Apple has recently responded to these challenges by beginning to sell DRM free tracks on iTunes. In addition, a handful of companies have started selling DRM free music (some, such as ALLOFMP3.COM, illegally).

However, it is not clear that DRM is at fault for the low sales so much as the easy availability of free music. A band called Radiohead ran an experiment allowing fans to choose how much they were willing to pay for the chance to download the latest Radiohead album DRM free. 66% of fans choose to pay nothing, and the rest choose an average fee of $6 which was still well below the CD price.

Consequences

Widespread copying has so desensitized the average man that he now no longer considers piracy immoral, and has on the contrary even began to find dubious justifications for it's righteousness. For example, increasingly consumers have begun to believe that free music is a right and intellectual property laws are out of date.

As a result of the massive revenue falls, large record companies are beginning to abandon less popular artists in an effort to cut costs. From the Guardian Newspaper:

An acclaimed indie band will next month leap into the unknown by becoming the first established act to give away an entire album for nothing in a move which could spark a music industry revolution.

Convinced that changes in the industry and the spread of digital piracy have made it ever more difficult to make money from selling records, the Crimea plan to turn the economics on their head by giving away downloads of their self-financed second album, Secrets of the Witching Hour.

By giving away the album in its entirety on May 13, the band hope to widen their fanbase and ultimately make more money from touring, merchandising and licensing deals than they would from sales of the album.

Despite selling a respectable 35,000 copies of their debut album, Tragedy Rocks, and making the top 40 with the single Lottery Winners On Acid, the band were last year dropped by their record label, Warner Music.

Like its major-label rivals, it [Warner] is struggling with the structural changes to the record industry and, say critics, is increasingly unable to invest in long-term artist development.

The experiment is being watched closely by the industry and other artists struggling with the conundrum of how to make money at a time when CD sales are collapsing...

Only very popular artists offer the potential for alternative sources of revenue - live converts, TV shows, merchandising sales for example. Another cost cutting technique we see today is the production of mass market music which is churned out by record industry experts using previously unknown and therefore inexpensive artists.

In summary, declining sales are clearly having a vastly negative impact on the music industry - and farsighted people will realize that reversing this tide is extremely important.

Proposal

I believe DRM is a vital technology and it can and must be made to work.

In order for Music DRM to succeed it needs to offer the consumer an experience over and above what is possible by scanning CDs or downloading mp3 files from file sharing web sites. It should include the following features:

(a) An extremely rich music tag and album art format which hugely exceeds anything available today. For example scrolling song words even Karaoke mode, images on every track, possibly video clips, long descriptive text and background articles.

(b) Music sourced from 24bit 96kHz recordings which can be advertised as offering the consumer "better than CD quality sound".

It should also support these features:

(c) Both Music Purchase and Music Subscription models. To date music subscription services such as Rhapsody To Go (which offers access to a vast CD library of popular music with unlimited playback and copying to a DAP all for a fixed monthly fee of $15) have not proved popular because they do not support the market leading iPod. However, many believe music subscription is the way forward and would work if available on the iPod. A very secure DRM will be essential. For the consumers all the music in the world would be on hand without the hassle of CD scanning or finding pirate files on the Web, also hardware compatibility becomes much less of an issue. From Apple's point of view it frees them from competition with music sellers such as Amazon, strengthens their monopoly because they can force a better subscription deal on the record companies compared to smaller competitors, and encourages users towards higher capacity machines.  

(d) Generous rights to play back the music on a number of devices with a minimum of inconvenience (eg a portable player would need to be connect to the internet only once a month, for example, to validate it’s usage rights).

(e) For music purchase: playback on a variety of devices made by a variety of manufacturer and including portable Mp3 players and home players such as the Squeezebox or Apple TV.

(f) For music purchased: the files are backed up for the user so he can never loose them and they are available for him to download at any level of compression (so he can install high quality large files on a home device and lower quality files on a portable device).

(g) A user friendly environment. Eg: Rather than multiple files stored in different directories a simple install of an album onto the device, also without home scanning there is no need for tag editing.

also:

(h) The DRM should probably include a Secure Cryptoprocessor / Decompression / DAC chip with tamper-resistant properties. The focus should be on hardware devices - avoid the issues around computer playback and building user friendly PC software applications. Microsoft & Apple will resist such a move (especially a focus on hardware devices instead of PCs) - the initiative needs to taken by record companies. Sony is the natural choice, but their long history of trying to lock consumers into proprietary technology would have to be overcome.

(i) Ideally the enhanced rich tag digital format should be made available only inside DRM protected files with technical details kept secret. In this way a pirate file (perhaps made from an analogue recoding) with the same rich tags and audio quality could never be circulated.

Unlike the Apple iTunes DRM this offers the consumer something superior to anything available today. Indeed a DRM such as this one could create a new renaissance in the music industry as music sales explode. Meanwhile the industry does little. It is clear that the commercial world suffers as badly as the general public from a lack of vision and talent, and that CEOs such as Steve Jobs who built the stylish and easy to use iPod are in the minority.

A final note on security: Audio DRM has the potential to offer a very high level of protection, electronic books which need to be read on computers and have searchable text are a much more difficult problem. Aggressive action on piracy and the creation of new laws is of course a vital element of the DRM concept. It's unacceptable that software that breaks into a DRM be allowed to go on sale (as has occurred to the weak Apple and Microsoft formats).

Protecting intellectual property is vital to both the economic and creative heath of nations. Preventing copyright infringement of digital material (Digital Rights Management) is one of the greatest IT challenges we now face. Digital Music has been the first major test, more will follow.