-1- Some naive observer might wonder what this commotion is all about.
Here is a Princeton University professor who enters a competition organized as an open challenge, declines the cash prize for the sake of academic freedom, meets the challenge successfully and goes on to write a research article about it. Why should he end up being threatened with a law suit by, among others, the organization which set up the challenge in the first place ?
Was this organization the Department of Defense, the CIA, the NSA? Not at all. It was a simple trade association, the Secure Digital Music Initiative, regrouping more than 200 companies and organizations representing information technology, consumer electronics, security technology, the worldwide recording industry, and Internet service providers. Since the hippies, music is closer to promoting love than war. So what went wrong?
The fact is that a real war is going on, one pitting the copyright holders against the users of their copyrighted information. It is a total war, where copyright holders rightfully consider their very economic survival to be at stake.

-2- While individual creators have much to loose if users can copy their copyrighted information for free, it is the corporate interests which wage the battle as their revenues are based on charging users usage fees for enjoying access to this information. The music recording industry (see the Recording Industry Association of America) has been the most active so far but the movie industry (see the Motion Picture Association of America) is raising its profile as digital video comes of age.

Notice how this chapter is at odds with what precedes (see the table of contents).
In other chapters the organization, whose perspective we adopt, looks at information related law as a source of costs. Because organizations cannot be trusted to have the interests of individual users (customers, shareholders...) at heart, compliance is enforced by law over organizations in order to protect users.
In this chapter about the publishing of digital information, it is the users who cannot be trusted to have the interests of corporate copyright holders at heart. As a result and in order to protect their revenues, these organizations want compliance to be enforced by law over individuals .

-3- Against this background, Edward Felten's tribulations start to make sense.
Revealing the defense plans of one's country to the ennemy would be a crime, as it would make an attack less costly to the ennemy and therefore more likely to occur. The fact that such a disclosure happened as a side effect of an academic publication, with no money changing hands, would be considered, if not totally irrelevant, at least quite secondary.
By removing all physical barriers to illegal copying, any activity which advertises ways to bypass so called "digital right management" (DRM) systems and methods, which are used by corporate copyright holders to protect their intellectual property, is enticing people to commit a crime. This is the danger addressed by the Digital Milennium Copyright Act as it forbids the circumvention of copyright protection systems.

-4- Both sides in the case are thus seen to act according to character in a justifiable way. The real issue is not to find out who was right but to find out how normal business conditions could have given rise to such a war like situation.

This is especially important since the critics have faulted the DMCA with two important flaws:

• DRM's do not, in fact cannot, take into account all legal and traditional exemptions from copyrights, such as the right to "fair use". If users can no longer take what they are entitled to by law without breaking the DRM's, the DMCA creates new rights for copyrights holders: the power of preliminary review over fair use requests, which leads either to censorship or commercial gain or both.
• the DMCA might limit the breaking of copy prevention mechanisms. But it is very difficult to avoid making a least a few unprotected copies for each original and one of them inevitably leaks out to the many file sharing exchanges known under the name of "Dark Net". In hindsight the DMCA appears like the little Dutch boy's finger in the well known story, to one small exception: there is not much of a dam left around the finger.

General Comments:

-1- A little history will help understand the issues.
Digital information, like analog information, goes through two stages:

• production, which has itself two possible formats:
  • text, such as in manuscripts, music opera, screenplays, choreographies, software sources
  • performance, such as in public readings, music concerts, theater and ballet performances, movie shootings, software executions
• reproduction

• authors of texts have been granted legal rights to benefit from the reproduction of their creations
• reproduction technologies have become industrialised

-2- Underpinning this historical sketch, laws of economics are at work, based on technology.
Live performances have been able to extract payments because they put or enable a promoter to put severe constraints on the audience both in space and in time. They have the characteristics of luxury goods based on craftsmanship.
The ability of publishers to get paid for reproducing authors's media originals, and therefore to pay copyrights to their authors, is predicated on a more fragile premise: that it be cheaper for the consumer to buy a copy from the publisher rather than to create an independent copy. This premise held true only in the industrial age. In our Information Age, the cost to an individual for reproducing a digital media original has become low enough to make paying the publisher more expensive than making an independent copy.
While copyrights laws are still in the books, the truth is that the current business model of publishers is no longer supported by technology.

-3- Our perspective is practical, not moral. The issue as we frame it is how publishers can evolve into more stable models. In view of the above discussion, we propose three possibilities based respectively on the delivery of:

• free information, whereby no revenue is lost from independent reproductions by the publisher because none was expected
• perishable information, whereby illegal reproductions would carry few or no benefits for the user
• live performances, which by definition cannot be reproduced as such

-4- While the discussion has been so far on single business models, it is important to realize that the publishing industry can play on all models over the useful life of some types of information. Taking the music industry as an example, a major label could promote the new album of an artist through a series of live concerts, followed by a very public release which saturates the distribution channels for a few frantic days, followed with free distribution of the music supported by an ad stream.
This information life cycle management echoes current practices in the book and movie industries which move information through a series of cheaper and more broadly accessible formats, respectively going from hardcover to paperback editions and from theatrical versions to tapes to DVD's. But cheap digital reproduction weakens such a format-based life cycle as well as the whole idea of paying for a reproduction since publishers no longer controls the format of illegal copies.

-5- Another way to look at the problem is to list all possible economic models which can justify the distribution of digital information.

"Free" information supports a viable economic model under one of two circumstances:

• publishing is secondary to the economic model. The goal is rather to cut down publishing costs. This is the case for:
  • mandatory information, published in compliance of laws and regulations, such as safety instructions, SEC filings ...
  • information used for training and maintenance, from user manuals to software device drivers ...
  • information used for public relations, marketing and sales, from annual reports to price lists and catalogs
  • information in defense of non for profit objectives, such as advocacy ideals, lobbying positions, personal weblogs
• free publishing is inherent to the economic model. The goal is to attract and retain customers by providing independently desirable content. This is the case for:
  • content provided to prospects and customers in the hope of selling more products and services (see pharmaceutical companies and professional services)
  • content provided to users to support ad-based revenues

• the unit quantity offered, whether:
  • a record: chapter, article, song, movie...
  • a file: book, newspaper, album...
  • a data base: library, archive...
  • a live feed: news feed, syndicated column...
• the way access is managed timewise, whether it is granted:
  • a single time
  • a limited number of times
  • for an unlimited number of times during a limited time window
  • permanently with no reproduction rights
  • permanently with limited rights of reproduction
  • permanently with unlimited rights of reproduction

-6- By reviewing the list of economic models in the light of our previous discussion, we can study model robustness in more details.
We maintain convenience is the primary actuator of user behavior. It is therefore the yardstick one should use to rank economic models, including the rogue model based on illegal reproduction and distribution of information. Convenience however derives from many considerations, including:

• catalog management, from the simplest type, an alphabetical list of authors and/or titles, to the most complex, with search capability based on keywords or criteria
• access management, including decisions relative to unit quantity and time but also player availability, since access to digital information depends on the latter
• cash payment management, from the simplest type, its absence, to the most complex, with prices varying according to unit quantity, access type, author's notoriety etc...
• advertising management, from the simplest type, its absence, to the most complex, with personalized ads based on interaction context or user profile
• sharing management, from the crudest type, total interdiction, to the most liberal, total freedom
• illegal copy availability, from the easiest type, downloading an unprotected copy via a well known peer to peer network, to the most difficult, the breaking of a protection scheme
• legal risk, from the hollowest, such as a threat of FBI action against a Chinese resident, to the highest, such as being physically caught stealing masters from a studio

• Convenience is not directly proportional to complexity. In the case of catalog management for example, search capabilities will make it more, not less user friendly.
• Access management is the stake of a war between content publishers and player manufacturers as a DRM must run on the player to be effective but ends up controlling it.
  The preferred architecture would model current practices of the computer industry: a universal player (the computer) able to support any DMR (software programs) whose role is to supervise freely exchangeable information files (data). This model cleanly separates hardware manufacturers and software providers. On the contrary digital information publishers today prefer closed players, which cannot run anything but their chosen DMR, going as far as integrating both businesses together such as Apple iTune and iPod for music.
• The inconvenience of having to pay for digital information is very high today, much higher that one could expect from a purely economic basis, in view of three factors:
  • the absence of a universal, satisfactory, anonymous, digital cash standard, giving the credit card industry the role of a de facto payment standard
  • the existence of a significant fraction of potential customers, teen agers especially, without a cerdit card and hence no access to means of payment
  • the low regard in which many organizations hold customer privacy, considered a compliance cost (banking, credit, retail...) or a shield for terrorists (FBI, department of Homeland Security)
• Digital advertising management is still in its infancy for new technologies are likely to change two sources of inconvenience:
  • today personalization, while highly desirable, goes against the legitimate desire for privacy. Moreover no popular standard exists for sharing profiles among advertisers (Microsoft retired Passport in December 2004), and advertising agencies simply compile their own databases of customer profiles (DoubleClick purchased Abacus in 1999).
  • the traditional advertising model is adversorial: advertisers intrude on targets to the maximum acceptable level, target evade advertising with all available weapons, from channel surfing to fast forwarding on Digital Video Recorders (DVR)
• The impact of sharing on convenience stems from the way people react to information: if it is good, they will want to share it and resent any obstacle put in their way
• Since what counts is relative convenience among competing models rather than absolute convenience, it is natural for publishers to try to raise the inconvenience of the illegal copying model by making copies less available and making prosecution of offenders more likely. But publishers must be aware of potential risks to their image:
  • if penalties are thought to be disproportionate, they can turn off more potential customers than illegal copiers
  • some publishers have left themselves opened to hypocrisy charges by indulging in the same illegal practices that they attempt to stamp out:
    • lip-synching by singers performing live, for which penalties might in comparison appear underwhelming
    • attacking the copy prevention mechanisms of competitors, a charge which has dogged NDS, a News Corp subsidiary, and has never been disproved in court (legal action was terminated after friendly acquisitions by News Corp of a controlling stake in Direct TV, one competitor, and of a subsidiary from Vivendi Universal, the owner of another).

-7- The study of convenience shows how payment is but one aspect of information publishing when the act of publishing is primary to the economic model.
It should therefore not be a surprise that some of the decisions to be made about convenience extend to the case when publishing is secondary and information free as a matter of course.
As an important example, consider pricing information for some consumer goods category. The organization concerned may want to prevent third parties to collect this free information and feed it into a comparative shopping site. This choice will decrease customer convenience as it makes category searching less efficient and raises legal issues for comparative shopping but might be seen as legitimate to bolster marketing strategies.

Solutions:

If one faces the prospect of publishing digital information for the first time, the previous discussion shows that one ought to determine:

• whether the objective is secondary to the business model, which implies free information, or not
• in the case of publishing as a primary objective, whether information value can be limited in time, either by making it live or perishable, or not
• in all cases, how to design and implement the factors which influence convenience, with an eye towards some overall convenience level

• manage a critical transition period during which most of their revenues are tied to the sale of non digital formats
• deal with a world where most information is released in an open standard to be run by players with a built-in copy facility, making it convenient to make and circulate illegal copies

Tools available:

• Weblogs and RSS For the non professional publisher looking to propagate his or her personal opinions, Internet offers two related developments.
  The first is the setting up of an Internet site as a Weblog or blog, a journal by another name. The reference quoted from the Wikipedia Encyclopedia provides this link list for tools.
  The second is RSS, an XML syndication service which allows interested readers to subscribe to web sites for update feeds by downloading a software client.
  .
• Disabling browser copy and paste
  Ordinary browsers act as the de facto player for a significant portion of published digital information. Hence one may want to compel this player to prevent copying. While the following solution is far from being perfect, it makes it inconvenient for unsophisticated users to do a copy and paste, which is the goal. The solution tackles the problems of disabling:
  • "Copy" from within the html page to be displayed
  • "View Source", which would allow the text to appear inside notepad or wordpad, whose "copy" feature cannot be controlled remotely
  • "Save As", which would indirectly have the same effect as "View Source"
  One uses a combination of:
  • some javascript to disable the mouse command necessary to select the field to be copied (courtesy of etLux)
  • an ancillary window to hide Explorer menu functions
  • some more javascript to prevent the bypassing of the ancillary window
  For a more serious protection, one needs to further encrypt the text to be displayed.
  .
• encryption
  These tools require the cooperation of the player or can be implemented on top of a browser using some javascript or Java programming. Data encryption techniques per se are outside of the scope of this document.
  
  Special mention must be made however of so-called watermarking techniques. Watermarks act as a stamp hidden inside otherwise unaffected digital multimedia information, such as music, pictures and video, which enables the publisher, a DRM or a law enforcement agent to track information ownership. For more information, one is referred to Frank Hartung's link page.
  .
• Digital Right Management
  This overall solution for digital publishers combines:
  • unauthorized access and copy prevention, using for example one of the encryption techniques described above
  • access management, which implements the authorized use of the associated player
  • cash payment management, which input rights into the access management subsystem and is often implemented as a separate, centralized module
  When choosing among the different solutions on offer (see the reference), one is reminded of the two issues of player support and overall user convenience. In particular some may consider adding the play function to the features of a DRM and subsume the player into its architecture. A closed iPod fits this model.
  .
• Software License Management Software has, by definition, been the first type of digital information to be systematically distributed. Although software is itself subject to the copyright laws, software publishers really sell usage licenses and this special case of DRM is often considered under the name of license management.
  Software licensing has some special characteristics:
  • a usage license is often unlimited (the case we labeled "permanently with no or limited reproduction rights"), reducing DRM to license activation
  • the types of reproduction rights allowed are influenced by the needs of network computing and include such things as "per seat" or "per connection" limitations
  • business or professional users, a significant market for software publishers, are more likely to accept DRM's based on special hardware keys or "dongles"
  For commercial sources, see this Google search.
  The special character of software distribution must not be overemphasized.
  • application service providers with a software client component offer non permanent types of access, like any other information publishers
  • some dongles may well evolve into DRM-controlled players, as digital "play" functions become commodities, in which case consumers will adopt them readily
  • similarly the distinction between software sharing over a network and digital information sharing among friends is more in the mind than a technical issue
  
  .
• tEC
  One might wonder of what use in this context can be tEC, the Electronic Confident, by ePrio Inc., which has already been described in chapter II-2 on marketing as a solution for sending personalized emails which requires neither opt in nor opt out. The fact is that:
  • tEC can create and manage ad streams without the two sources of user inconvenience listed above since:
    • tEC allows both personalization and total privacy, without having to trade one for the other
    • tEC enriches ad management with more flexible and more accurate options, in particular allowing the user to be directly rewarded for interacting with the ads at times picked by the user rather than by the information publisher
  • tEC has a built-in peer to peer mechanism for sharing information among friends and family
  By making information players tEC-aware, one can build a user friendly system to distribute free information paid by advertising.