A Big Day For DRM

Yesterday was a very, very long day. Caught a morning flight to Washington's National Airport and a cab to Bethesda. Of course, I got a cab driver who claimed not to know how to find the Marriott Conference Center. His memory miraculously improved when I told him, "I take this trip a couple of times a year. It's a $42 cab ride and I tip $8. You can rack up the $50 on the meter, or you can have the $8 tip. I don't care; it's up to you." He had an epiphany and got me to the hotel before the $8 tip completely evaporated although it was reduced to $4.23 by then.

Somehow a new staff member at the travel agency booked me into "the other Marriott" in Bethesda instead of at the Conference Center. And, of course, the Conference Center was completely booked. A friendly bellman I'd met during a previous visit suggested I ask about the "parlor rooms." Turns out that there is a floor of business suites that come with king-sized Murphy beds. The only catch was that the parlor rooms cost $500/night instead of the $300 my university usually pays. A kind front desk manager agreed to give me the room at my normal rate. There are a few perks to coming to the same hotel over and over.

So I'm in this enormous suite with a sitting room, a conference table and six cushy chairs, LIVE palm trees, a wet bar, kitchen, two exits, a bathroom stocked with Q-tips, cotton balls, and mouthwash in addition to the usual shampoos and sewing kit . . . AND a king-sized pulldown wall bed concealed behind a built-in closet.

Today's Publishers Lunch had a link to a letter sent last Thursday by Madeline McIntosh, Senior VP and Publisher of the Random House Audio Group. The letter was significant.

Beginning March 1st, we will no longer require that our retail partners use DRM [digital rights management] when selling audiobooks via digital download.

McIntosh says that, since mid-September, RH Audio has been experimenting with DRM-free distribution on eMusic.com.

In case you're not familiar with DRM, it's the attempt by the entertainment industry to protect copyrighted digital material by putting restrictions on it that prevents anyone from making a copy.

On the surface, you might think that the copyright holder has the right to protect his/her material. However, what happens when you purchase a music download, but are unable to copy it to another device that you own? Or, what happens when the copyright runs out? The DRM doesn't self-terminate.

There has been an ongoing controversy regarding DRM. The entertainment industry has been arguing that DRM prevents pirated copies. You and I know that's not true. No DRM system is foolproof. All you have to do is visit a file sharing website to prove it.

The other side argues that, by putting unnecessary restrictions on material, the entertainment industry is being short-sighted.

Now, along comes RH Audio saying:

Because piracy is already a fact of life in the digital world, what we were interested in finding out was not whether piracy exists, but rather whether there is any correlation between DRM-free distribution and an increased incidence of piracy.

To find out, they watermarked all the eMusic audiobook files and then hired a watchdog service to report on whenever illegal pirated copies showed up on file sharing sites.

The results: We have not yet found a single instance of the eMusic watermarked titles being distributed illegally . . . It is worth noting that these results are entirely consistent with what the music industry has found in the last six months.

Because of these results and because we believe that the future of the audiobook category will depend on allowing a competitive retail marketplace, we will now allow our retail partners to sell in the Mp3 format (in other words, without DRM). This means that we will we (sic) be able to sell not only through existing partners such as iTunes, Audible and Amazon, but we will also be able to foster new audio sales through any of our CD retailers who have websites, and through emerging partners such as eMusic.

In order to allay their authors' fears, McIntosh says that RH Audio will not go to the Mp3 format for those authors who are uncomfortable with the idea. However, she points out that authors have the potential to earn more under the DRM-free format because digital downloads are paid at 15% royalty while CD sales are at 10% royalty.

McIntosh asks authors who are concerned to contact RH Audio if they do not want their books released in the DRM-free format.

The DRM-free format will NOT be used for RH's library download business. Titles distributed through OverDrive and NetLibrary will continue to have DRM restrictions.

The times, they are a-changin'.