DRM-free doesn’t mean profit-free
Everyone knows that media and society are at a crossroads right now. I could tell you how the Internet is changing everything, how old media has to adapt to the fast new world of tech, how sharing and remixing are steadily becoming cultural norms. But you already knew all that.
It’s true that the Internet makes it a lot easier for people to share work like music, ebooks, or video games that they otherwise might have bought individually. And the natural response is to want to stop that sharing, to hang on the revenue we receive from each individual purchase and from each individual customer. It’s a simple equation in our imaginations: If people can share, they will share, and each time a product is shared we find our pockets one dollar emptier—right?
So to keep those dollars in our pockets we invent things like DRM, which prevents our customers from copying, sharing, or modifying the files they buy from us—even for their own personal use like backups, or on other devices they own.
It’s very tempting to take the path of punishing our honest customers to stop a handful of pirates. (And make no mistake, punishment is exactly what DRM is: we’re preventing honest customers who paid money for our product from doing what they want with it, and we’re putting them at the mercy of fickle, complicated, expensive, difficult-to-maintain technologies.) But it doesn’t have to be that way!
It turns out that customers are more than willing to pay for DRM-free content. Plenty of companies have made gobs of money—millions!—selling DRM-free digital content. Check out the Humble Bundle games and ebooks, J.K. Rowling’s ebooks, TOR ebooks, Louis CK’s comedy, CD Baby, and even Amazon and Google Play, which all sell DRM-free content. I’ve personally made money from DRM-free digital content at Standard Ebooks, and I even wrote about the success of our pay-what-you-want experiment in my blog.
As content creators, selling our content free of DRM—in other words, respecting our honest customers—has lots of advantages for our bottom lines. The biggest advantage—perhaps surprisingly—is the very fact that buyers can share the content they love with their friends. Why is that a plus? Take the example of a customer who passes an MP3 album to a friend. The friend loves the album too, and while the friend now has the first album for “free”, the band now has a new customer ready to pay money for the next albums they release. In short, removing DRM makes one of the most expensive—and most important—parts of producing content cheaper: marketing.
Not only can people act as guerrilla marketers for us by sharing samples with friends, but not tying down content with DRM is a huge win for keeping the cost of producing and maintaining that content down. Adding DRM typically requires servers to be running 24/7, which either means paying money for someone else to do it for you, or paying money to do it yourself with complex hardware, staff to run that hardware, and staff to talk to customers when their DRM inevitably confuses them or fails to work like they expected.
Even if you don’t buy those arguments, it’s a fact that people interpret buying a digital file online to be equivalent to buying a physical product, rather than buying a license to enjoy that product (which is typically what they’re really buying, unwittingly). That is, when people press “buy”, they expect the freedom to do what they want with their purchase, including using it on a different device or backing it up, just like they’d expect to be able to play a physical CD on both their car stereos and in their home theater. Breaking customer’s expectations makes them unhappy at the very least, and at the very worst increases our costs by having angry people calling in to support to ask why their files aren’t working.
Finally, it turns out that people who want to pirate content will find a way to do it regardless of the DRM restrictions placed upon it. The Pirate Bay is just one of many examples of this—even with the DRM imposed by Netflix, any TV show or movie imaginable is available at the Pirate Bay anyway, despite massive, long-term efforts by powerful governments and business interests. The same goes with ebooks encumbered by Adobe DRM, which are often available the same day they’re released on file sharing websites, and with digital music. By encumbering digital content with DRM we succeed only in angering our honest customers, while the dishonest ones continue to pirate without blinking an eye.
If that hasn’t convinced you, then take the world’s two biggest MP3 retailers, Amazon and Apple, as examples: They realized that DRM did nothing to stop piracy, and only confused and angered their actual customers. As a result they’ve long ago started selling DRM-free MP3s.
You might think that I’m preaching to the choir here. But it turns out that lots of tech-savvy people, and most importantly, tech-savvy content creators, are still afraid of releasing DRM-free content. I see that hesitation all the time on the writing community I run, where internet-savvy writers are following the lead of the major publishing houses and encumbering their self-published books with DRM out of a misguided fear of piracy. If only they’d believe me when I tell them that having customers sharing their writing is the best kind of marketing that could happen to an author!
It’s easy to be intimidated by the new paradigms of copying and sharing that the internet enables. But making a profit is still possible—and in fact easier than ever—without having to frustrate honest customers with DRM. Don’t be afraid—dive in!