We’re talking about Digital Rights Management (DRM). As you’ll remember from last time, DRM is “secret” computer code built into commercial (for sale) digital media (software, music, movies, etc.) in order to prevent people who don’t purchase the digital media from being able to use it. Obviously, a record company wants to sell several million copies of a hot artist’s latest recording (either on CDs or through online services like iTunes), rather than sell one copy to a computer-literate music-lover who then “shares” it with several million other computer-literate music lovers via the Internet and peer-to-peer file sharing networks like LimeWire. The former is a far more desirable outcome for the record company, its shareholders, and the artists themselves.

But what about us consumers? Is DRM good for us? What do I get out of it? What about MY needs?

First some history. Although there were online music stores before iTunes, and personal digital music players before the iPod, it’s obvious the digital music revolution was accelerated by the “dynamic duo” of iTunes and the iPod. When Apple CEO Steve Jobs went to the music industry and said, “I have a way to sell music online”, the first thing the music industry executives surely asked was, “How can you protect the music from being pirated after it is purchased?”

Apple responded with a DRM system called “FairPlay”, which establishes where and how music (and now video and movies) from the iTunes store can be played. FairPlay lets you play purchased media on up to five “authorized” computers (Macs or PCs, as long as they have iTunes software installed), unlimited iPods (although you can’t use an iPod to transfer music between unauthorized computers), and virtually unlimited burning to CD (with some playlist restrictions to prevent mass copying). Note that you cannot burn movies or videos purchased from iTunes onto DVD-player-playable DVDs, at least without jumping through some major software hoops.

Other online music and video software and hardware “ecosystems” that have sprung up (the reformed and rehabilitated Napster, MusicMatch, Wal-Mart, and Microsoft/MTV’s “Urge” store, to name a few) all have DRM restrictions of their own, due in part to Apple’s refusal to license FairPlay to any of them. The Microsoft/Napster/Wal-Mart crowd responded with a DRM/marketing program called “PlaysForSure”.

The idea behind PlaysForSure is for companies like Archos, SanDisk, iRiver, and Creative Labs to build many and varied personal digital music players. Microsoft manages the DRM and runs the marketing campaign. PlaysForSure marketing emphasizes the irrefutable fact that music purchased at Apple’s iTunes Store cannot be played (again, without a bit of hoop-jumping) on any personal digital music player but Apple’s iPod. In turn, iPods cannot play DRM-protected music purchased from any online store but Apple’s iTunes Store. Microsoft and its partners hoped that surely the American consumer would see the light and choose choice over convenience.

Wrong. In the few years the PlaysForSure campaign has been in place, iTunes/iPod market share has actually increased. Roughly three-of-four songs purchased online are purchased at the iTunes Store and three-of-four players in use are some model of iPod. PlaysForSure has been so ineffective that Microsoft chose to change directions, build their own player, the Zune, and create a store and DRM system separate from PlayForSure. Another in a long list of reasons to not partner with Microsoft. But, I digress.

So, has the ability to purchase music online stemmed the tide of music piracy? Apparently not. A recent study showed only 3% of songs on people’s iPods are purchased from the iTunes Store. Where does the other 97% come from, then? More next time.