Digital Rights Management (DRM) has been in the news a lot lately. A principal in a school in a village in the Urals in Russia (a hotbed of pirated software) faces imprisonment in a Siberian camp for using unlicensed Microsoft software in computers at his school. Closer to home, early adopters of Microsoft’s new Vista operating system found that the music they had previously purchased from Apple’s iTunes Music Store won’t play in iTunes on Vista (a patch is available, but Apple recommends waiting for a new version of iTunes to be released in the next few weeks). This week Apple CEO Steve Jobs published a Jerry Maquire-like manifesto on Apple’s web site focusing on DRM and the music industry.

So what is DRM? It is “secret” computer code built into digital media (software, music, movies, etc.) to prevent a user from using the media past the rights bestowed on them by the creator or seller. Some examples? The serial numbers without which some software won’t install or function properly. Apple’s “FairPlay” DRM code that prevents playing a song purchased from the iTunes Store on more than five “authorized” computers.

Our lives, even away from our computer desks, are controlled by rights management of some kind or another: the keys that allow only you (or whoever has your keys) to drive your car or enter your home, or the PIN number you use to get money out of an ATM. Rights management is a fact of life in our technology-laden world.

Let’s look specifically at the music industry. Digital rights management wasn’t really that much of an issue back when music was delivered and enjoyed only on physical media, like records, cassettes, or CDs. Consumers recorded music from their record collection onto cassettes and duplicated cassettes and music CDs, and everyone, even the Supreme Court, was fine with that, as long as it was for the consumers’ personal use. The “personalized music compilation recorded for a specific change of geographical location by means of the automobile”, or “road tape” was born.

As personal computer use became more widespread and music “codecs” (compression/decompression) were developed to decrease the physical size of music files without compromising too much quality, folks began “ripping” their CD music onto their computers, and then back onto CDs. The “road CD” replaced the “road tape”.

Then a dark cloud (at least if you’re a music industry executive or shareholder) came over the land. A dark cloud in the form of… a cat wearing headphones (OK, I know its obtuse, put that’s the logo of Napster, the original and most notorious peer-to-peer file “sharing” network).

The rise of Napster and today’s networks like LimeWire and Kazaa, created a nightmare, almost doomsday, scenario for the music industry. One person buys Artist A’s new CD, rips it onto their computer, and millions of potential purchasers download it onto their computer instead of buying it at their local music store. Not a good business plan.

So, it’s easy to see, from a capitalist’s perspective, why the recording industry requires DRM to be encoded in music sold online by Apple’s iTunes Store, Microsoft/MTV’s “Urge”, the present-day “reformed” Napster, and the like. DRM coding becomes even more important (again, from a profit perspective) when the music is “rented” via subscription plans that allow unlimited downloading for a small flat fee. This music can be enjoyed by the consumer as long as the monthly fee is kept current, and you need DRM to control that.

From a consumer perspective, DRM is both a blessing and a curse. We’ll delve into that, and see what the future may hold, next time.