A recent report found that when you remove digital rights management from albums, revenue actually increases. TorrentFreak reports that music revenue increased 10% on general content and 30% on what it called long-tail content -- proving that buyers don't like it when you place restrictions on content.
Back in the '90s, probably about the time Napster surfaced, it suddenly occurred to executives in the entertainment industry that they might have to confront this Internet thing. But they feared this new distribution channel too much to embrace it, and instead they sought to control it with digital rights management (DRM).
Movie studios and record companies were already regretting the digitization of their content. For them, CDs and DVDs were bad enough, allowing for perfect digital copies, but the Internet was much worse: a channel through which people could share these digital copies and bypass the entertainment companies altogether.
Reactionary fear just seems to come natural to the entertainment industry. It had feared cassette tape players ("Mixtapes are stealing our revenue!"). It had feared radio ("Who's going to buy records when they can hear music all day long for free?"). And of course the movie and television industry had feared cable and VCRs and fought them tooth and nail.
With that history, it isn't exactly surprising that entertainment executives didn't engage the Internet phenomenon with forward thinking. They weren't about to build distribution networks of their own to battle Napster and its ilk. Instead, they fell back on their default mode, a defensive crouch, and came up with what they thought was a way to control digital distribution by attaching DRM to the digital content they sold.
It was warped thinking, and it produced bizarre results. Does DRM punish pirates? Not really. The people it hurts most are the entertainment giants' paying customers. It says in effect, "If you play by our rules and buy our content, you will be limited to a single copy, and you had better hope it never gets damaged or lost, because we've made it impossible for you to save a backup copy. But if you steal our content, you can use it on an unlimited number of devices and share it with all of your family members and friends."
And the content could be stolen because, of course, DRM, like all technology, could be broken. This effort to use brute force to control the uncontrollable was doomed to fail, but the entertainment industry seemed incapable of even imagining that it could find a way to take advantage of the best distribution platform the world has ever known.
Is it any closer to seeing the truth today? A few enlightened executives might be, but for the most part, the entertainment companies are still obsessed with control.
Let's look at two contemporary examples. The first one is House of Cards, a popular series that was produced by Netflix and is available only via the Internet. The show's star and executive producer, Kevin Spacey, pointed out in a speech before the Guardian Edinburgh International Television Festival earlier this year that when you give people what they want, they will pay for it.
"And through this new form of distribution, we have proved that we learned the lesson the music industry didn't learn," Spacey said. "Give people what they want, when they want it, in the form they want it in, at a reasonable price and they'll more likely pay for it, rather than steal it. Well, some will still steal it, but I think we can take a bite out of piracy."
Contrast that with HBO's Game of Thrones. HBO tightly controls its distribution. It generally doesn't syndicate with networks, cable or streaming services like Hulu Plus or Netflix. That means that if you aren't an HBO subscriber, you can't see Game of Thrones. Yet millions of people want to see it, and many of those manage to do that by stealing it. The series topped TorrentFreak's list of the most pirated shows list in 2012, a dubious honor indeed. And Mashable reported that through June it was the most pirated show of 2013.
But it seems the big media companies never learn. Studies and real-life examples like House of Cards might show otherwise, but big media believes what it wants to believe and still tries for total control, even when it's clear that it doesn't work.
Ron Miller is a freelance technology journalist and blogger. He is an editor at FierceContentManagement and a contributing editor at EContent Magazine.