DRM and Profits

Are companies using DRM just to stop leaks and to ensure security of their documents, or are they trying to use it to plump up profits as well?

There are applications in streaming media, for example, where people are using DRM to go to the same Web site and are being able to have a very customized view of what they can and cannot see. Applications governing usage can save an organization from having to make multiple copies or multiple slices of the same content, and so you can store it once and publish it in many ways, many customized ways. So there are also cost-saving implications there as well.

There are other applications that, say, would let a company touch the user, allow training in certain courses, know when somebody's logged on, and how long they're looked at materials, and so forth.

Is DRM something that you think all companies, eventually, will be doing?

I think it certainly is, but it's going to take a while—like most new technologies. I think there are applications that will take off much sooner than others, you know, working in healthcare, financial services. And I think once the media companies know what their business models are going to be for their content and how they are going to distribute that content electronically, you will see a great upsurge. But I think that like most technology, you go after certain verticals first—where there are pains that this technology can solve. Then we will see a much wider acceptance of this across industries.

What's the CIO's role here?

The CIO really has to partner with the business manager when he or she is talking about this technology and the benefits that this technology brings to the business manager. I talk to financial institutions and I was telling people at one of them that they can resell their research online and control it from being reprinted, using DRM.

Suddenly, one marketing guy said, "You mean to tell me that you can determine how many times something has been forwarded?" I said yes. Let's say I'm a subscriber to some research, and I send it to 20 of my friends.

Now when my friends open up the document, it will say, "Okay, this document was received from Ranjit Singh and by the way, would you mind answering a couple of questions first, before you read on?" You can have it for free, you can read it. Now if those people become customers at some point, you can actually give me a reward by giving me two stock transactions for free.

For too long we've been in this mode of saying I don't want pirates to take my content away for free. But I believe we should turn those pirates into customers, or at least those who can help us distribute the content. Rather than let them steal it, pay them a commission to simply pass it on. Turn the pirates into customers or into your suppliers and distributors.

That's your new business model right there.

Exactly. That's what I was saying to the media companies about Napster. If you can now track who has material, then you can deputize them, and pay them a commission for distributing stuff for you.

It's essentially turning the people who are taking your content into sellers of your content.

Exactly. Turn the pirates into your distributors. With DRM, you know exactly where your content is and where it's being used and how it got there. You also have to pick and chose where you are getting return on investment, limit your first sets of deployment, make it manageable, and don't make it intrusive for the user.

Because as soon as you start to put limitations on the user, they will start to dislike the use of these type of systems more and more.