Dennis D. McDonald ( consults from Alexandria Virginia. His services include writing & research, proposal development, and project management.

The Sony DRM Debacle Raises Bigger Questions

by Dennis D. McDonald 

Sony's woes from its DRM debacle proceed unabated. USA Today's Jefferson Graham provides one of the best reviews of the situation I've seen. His article also includes a list of infected discs that does NOT include my beloved Santana. PC Pro's Simon Aughton  reports that researchers have discovered that the Sony software in question may contain open source software whose origin Sony has not credited. (What, a copyright violation in software designed to prevent copyright violations?)

Clearly, this is a situation that was avoidable but has spun out of Sony's control.  I'm inclined to agree with Bill Rosenblatt, who is quoted in the PC Pro article: "It is time for record companies to get serious about technology, to understand it well enough so that they can foresee the impact of DRM technology without, as we suspect, being blindsided. Now we know that such technology can negatively affect consumers in ways that go beyond anyone's definition of  'fair use'.'"

Sony will eventually recover. Executives will probably be fired or reassigned, lawsuits will play out for many years in the courts (I expect that a corporation somewhere will sues Sony for damages caused by a corporate network being infected with Sony BMG DRM software), and Sony will mount a massive PR campaign designed to regain trust and admiration.

CD sales will continue to drop industry wide, largely because (a) no DRM technology can forestall the technological prowess of serious large scale pirates, and (b) CD's as a medium for selling music are obsolete. (While I'm writing this I'm sitting next to my fireplace with my laptop connected to my stereo and I'm listening to streaming audio via iTunes' "Radio" channels, not to anything in my CD collection. It's the availability of options like this that is driving down CD sales, and ironically, the mistrust raised by Sony BMG's actions just hastens the inevitable.)

I assume, however, that the "record companies" all know this and view technology in the long term as their savior as they move ever closer towards systems  that control usage through either subscription or pay per use business models that are similar to what cable TV operators have.

But there is a major flaw in this scenario that could severely damage the marketplace for entertainment and information. This flaw should profoundly worry both artists and consumers, as well as the companies that make up the supply chain in between.

The flaw arises from treating computer-enabled media production, distribution, and use as a system.

It's not a system. It's a complex network of interconnected systems and processes that is still evolving. Sometimes this "system" works. Sometimes it doesn't. Sometimes the people responsible for managing different parts of the system -- like Apple and Sony with their annoying stand-off on DRM approaches, for example -- let their business differences get in the way of consumer-friendly system interoperability.

DRM software is only small part of the overall system. But for DRM to be effective and do what the media companies want it to do requires a lot of other things to work right and according to plan. As we've seen from the Sony BMG debacle, things don't always work right, and it's not just technology's fault. 

As Rosenblatt suggests, management needs to have a much better handle on technology. In my experience, understanding the technology by itself is seldom the whole battle. From a corporate standpoint, the "business processes" that surround how the technology is developed, managed, and used have a much more important impact on whether systems' objectives are met. For DRM to work, a "whole lotta things gotta work right." We just saw with Sony a gross example of what happens when things go wrong. (Although, I am happy that Santana's new album does not contain the dreaded XCP software. But I am concerned that it took so long for the antivirus companies to discover the existence of the "rootkit" infection and the vulnerabilities it introduced.)

When I look at this situation while wearing my IT management consultant's hat, from the perspective of a company like Sony I see a situation involving technology where I do not control all aspects of the system. Critical elements of my supply chain are internal to my company, but many elements are outside, and the institutions I have created over the years for managing or at least influencing those elements are outside my direct control. In addition, some of my critical supply chain partners are threatened by new technologies and new players operating with new business models.

What should I do? As a manager, I first need to take an inventory of the processes that are critical to my goals. Then I need to understand -- and manage -- how technology supports these processes. Following this, I must then change the technology and the processes so that I meet my goals.

Perhaps Sony BMG's mistake was that, out of technical ignorance, it let the technology manage its business processes, not the other way around. It sounds like Sony BMG did not understand how to manage those things it thought it had under its direct control (the DRM software in question). This is despite the fact that Sony's other divisions create industry leading consumer and professional technology.

Also, in a typical corporate IT environment, you test your new systems before putting them into operation. You start small with highly technical code tests and, over time, work up to more complex real world tests that involve all players, not just the technologists. Perhaps what Sony thought it was doing with a couple of dozen music CD titles was a "test," but there are ways to test software that are less potentially damaging -- and expensive -- than distributing millions of copies around the world for installation on systems over which you have no control.

In the short term, I'm hoping that Sony's mistakes will be studied and learned from. I already smell the case studies being cranked out by business schools. This current situation may very well join the hallowed ranks of Classic Coke and the Edsel. (I'm being kind. If someone actually experiences a financial loss or, heaven forbid, injury or death from a Sony BMG infected computer network, history and financial markets will not be so kind.)

In the longer term, I am not optimistic about what will happen with the next generation of media, given the increasing complexities of the hardware and software that are being developed to support in-home high definition display systems and networks. I am greatly concerned that systems that are being developed for home use will employ such complex interlocking controls over duplication and use that system failures will, at minimum, make thousands of dollars worth of entertainment system hardware and software useless. Even worse, as home entertainment systems increasingly blur the distinction between computer and cable, the potential for massive unauthorized release of private information about personal media consumption patterns becomes very real, indeed.

Finally, another disturbing impact of the Sony BMG situation is that it may increase the likelihood of government regulation, something which I do not look forward to.



Media Convergence and Electronic Barnacles

Technology, Copyright, and Fair Use

Technology, Copyright, and Fair Use