The DRM Challenge: Everyone agrees on the problem, but solution proves elusive

SANTA MONICA, Calif.-Like a train caught in a labyrinth of uncharted tracks, the entertainment industry is hurtling across the DRM space with no clear direction or destination.
So was the theme of a panel at the Digital Hollywood conference on copyrights and the challenges rights-holders face in protecting their work across multiple platforms.
With regards to media, consumer behavior is fickle at best, yet at its worst can be viewed as a threat to the companies that have traditionally managed, distributed and marketed that content.
The writing is on the wall-but the translation varies depending on one’s perspective. Some facts are indisputable: CD sales are plummeting, piracy is rampant on a global scale and a growing number of consumers want and expect more of their entertainment for free.
“Nobody is hostile per se to fair use, and I think the cross-platform challenge is going to tee this up with a vengeance,” said Jim Cicconi, senior VP of external and legislative affairs at AT&T Inc.
Sitting next to him on the panel was Jay Samit, who warned that he’d recently left the confines of the “corporate suit” and promised the audience nothing short of answering their questions “honestly.”
The longtime executive in the music industry and now strategic advisor at Navio, a company that enables digital entertainment transactions, evoked the aura of a recently freed man, determined to spread the uncensored realities he’d experienced on the other side.
“Hollywood is driven by one thing,” he said, “fear of being .” well, you might get the point.
Needless to say, artists, writers, filmmakers and nearly every other creative mind involved in the development of entertainment are anxious about their financial prospects.
“Neither side knows what they’re arguing or defending because there’s so many business models out there,” Samit said, adding that a significant priority should be putting on revamping some of the century-old laws dictating this issue to meet the demands of digital.
“DRM has not done anything to stop piracy-period,” Samit said. “For most of the world, if you go into a store to buy a CD, you’re buying a pirated CD.”
Cicconi said DRM is the only tool available on a large scale that currently addresses copyright-protection issues. While admitting it’s far from ideal, it’s still the only game in town.
“I think DRM is driven largely by the dilemma these (copyright-holding) companies face,” he said.
“DRM is a challenge going forward and you’re going to find a lot of experimentation across these platforms,” Cicconi said.
“All of the fears that rights-holders have today . I think within a couple years we’ll have figured out how to keep massive amounts of pirated content from flowing through the network,” he said.
Samit said the companies who will win are those that make it easier to buy music than steal it, pointing to the success of Apple Inc.’s iTunes.
Perhaps concluding it best was Sid Blum, partner at KPMG, a company that represents rights-holders. While most everyone agrees that big changes are inevitably coming, few claim to have the answers.
“There needs to be a revolutionary change,” he said, before adding, “I don’t know what that’s going to be.”