Going Legit

May 28, 2002

Digital rights management has long been mismanaged

by Derek Broes, Chairman & Co-founder, Distributed Computing Standards Coalition


Over the past two years I have been actively involved in the Peer-to-Peer debate addressing the technical issues surrounding digital rights management and anti-piracy, and have heard the whining on both sides.

The studios have spent millions of dollars to litigate, while the peer-to-peer programmers build more efficient applications, and users guiltlessly download the latest Star Wars saga before it's released into theaters.

The enforcement situation resembles a game of "whack the mole." When Napster was successfully taken down after being sued by the recording labels and film studios, 60 million Napster users rushed to embrace P2P (peer-to-peer) programs based on a new generation of applications, such as the open-source Gnutella, to fill the void. During the Napster affair, a senior AOL-Time Warner executive, who obviously did not appreciate the capabilities of young programmers nor understand what decentralized networks meant, told visiting members of congress, "We are not concerned about Gnutella. As soon as the court shuts down Napster, Gnutella will have no choice but to shut down."

Decentralized P2P does not provide a bull's-eye target when trying to shut them down, as there is no company involved, only users. They would need to pursue individual ISPs, large corporate and university systems that host their copyrighted material or even go after tens of millions of end users--one at a time.

Meanwhile the ethical, technology, legal and business questions still linger. Are P2P networks the realization of a technology designed to destroy copyright, or are they merely networks used by individuals who decide to use the systems for piracy purposes, or both? And what about fair use? Can a person share a song with two of his friends? Are P2P networks inherently destructive to the economic stability of content providers, or is the MPAA's Jack Valenti crying wolf, just as he did over twenty years ago when he compared VCR's to the Boston Strangler?

Let's get serious here. I know change is difficult for some, but, with well over 150 million P2P applications downloaded and tens of millions of users online at any given time, it amazes me that the industries who enjoy the wild success of VCRs and DVDs have been ineffective thus far in leveraging this innovative and relatively inexpensive distribution technology for profitable purposes. The studios have major issues surrounding distribution windows, royalties, regions and worldwide pricing, not to mention the basic notion of control over production and distribution. In essence, the most important question of all is: who is really in control if every user supplies a portion of the network? Some say that copyright is already dead because the recording and movie industries have neglected to take early advantage of P2P and to find new innovative ways to build revenue streams.

I say copyright is far from dead, yet it is severely impaired. Consider the warring factions: the P2P community believes that it offers the most efficient and innovative way to deliver digital assets; the public wants access to rich media content on demand, quickly, and at a fair price; and the studios want more revenue coupled with inexpensive distribution costs. So what's the problem? Among the problem is that these two worlds rarely meet, except in a courtroom. A good first step is to encourage these factions to meet in a forum that represents neutral ground. The forum would need to tackle issues ranging from ethics to technical standards with the goal of creating a framework for legitimate distribution over P2P where all players are fairly compensated. This forum must not become a bureaucracy that takes months or years to make progress. With an entire generation forgetting what it's like to actually purchase their content, and becoming more and more comfortable with this free luxury, the critical call is now.


Derek Broes is Chairman of the Board of Directors and co-founder of the Distributed Computing Standards Coalition, a nonprofit organization working towards an agreeable framework for decentralized Internet Peer-to-Peer communities and copyright owners. Prior to founding the DCSC, Broes was the Chief Executive Officer of Vidius, Inc., a prominent digital media and information security company in Los Angeles and Israel. In 2000, he pioneered the development of key technologies used by copyright holders to globally monitor and prevent piracy over the Internet's decentralized peer-to-peer (P2P) networks. His keen observations on the volatile issues surrounding Internet piracy and new media technologies have appeared in leading news and Industry publications including the LA Times, Red Herring, New York Times and The Washington Post. He has sat on several heated congressional panel discussions as the software industry's strongest voice in advancing digital content's protection and availability. Broes is a successful entrepreneur, major motion picture producer and published songwriter. Raised in British Columbia, Canada, Broes is also an avid fly fisherman and amateur ice hockey player.

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