DRM and Media Companies

Knowledge@Wharton discusses digital rights management:

Wharton legal studies professor Dan Hunter says his problem with DRM has to do with the stringent restrictions favored by music labels and Hollywood. “Ultimately, those limits will lose customers,” says Hunter. He isn’t alone in that assessment. Ben Macklin, senior analyst at research firm eMarketer, notes in a report that “if the rightful owner does not allow consumers to get the content they want, when they want it and how they want to use it, they will get it elsewhere. Content providers can either get a piece of the action or put such tight [controls] on their content through DRM and restrictive terms-of-service agreements that consumers will simply avoid them.”

Mark Cuban, owner of the Dallas Mavericks and a partner in 2929 Entertainment, a holding company that has begun to release high-definition movies simultaneously in theatres and on TV and home-video, adds that DRM restrictions could easily alienate customers, especially as entertainment platforms such as the PC, handheld devices and television converge. “You could really [anger] your customers, so you better come up with something that puts the customer first,” said Cuban in an email interview.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.