Watermarks, a friendlier DRM?

The Digital Watermarking Alliance, a group that encourages content owners to embed unique identifiers in media as a way to combat piracy and promote new distribution models online, released a study this morning on the prevalence of illegal downloading and the motives behind it. (Download the .pdf here.) Done by market research firm Interpret, it used an online survey to gauge how many U.S. residents were downloading media legally and illegally. Then it did what amounted to a push poll of 996 downloaders (again, both legal and illegal) ages 13 to 49, exploring their behavior in more detail and measuring their reaction to watermarking technology. Not surprisingly, given who was paying for it, the survey found that embedding watermarks (called "digital serial numbers" in the survey) could deter people from sharing content online. In particular, a third of the downloaders said they definitely or probably wouldn't use file-sharing services to obtain content if watermarks were deployed, and half said the same thing about uploading.

I take some of the  findings with a grain of salt, such as the assertion that using watermarks would lead illegal downloaders to buy more content from legitimate sources. Watermarks may very well drive some people away from file sharing, but they won't stop them from going to sites that stream free songs or bootlegged movies. As the survey points out, multiple factors influence how people choose to acquire content. Nevertheless, the study provided a number of intriguing insights, including the following:

• The initial survey found that legal downloaders significantly outnumber illegal ones. Specifically, 75% of the teens and 53% of the adults said they had paid to download media in the previous three months, vs. 34% of the teens and 21% of the adults who had used file-sharing software. But the second survey -- the one that talked only to those who had downloaded content -- produced a conflicting result. It found that only a fraction of those surveyed had used legal services exclusively. The vast majority of the rest made at least some use of file-sharing software.
• A significant percentage of those who download illegally also pay for content. This is the "don't attack your customers" finding. On the other hand, even these "hybrid" downloaders showed a marked preference for free (and illegal) downloads over paid ones for music and TV shows. "For movie studios, [these hybrids] are the group most at risk for increased illegal movie downloading in the future. However, they also represent the lowest hanging fruit for converting illegal activity to paid downloads," the survey found.
• "Passive" uploaders -- those who share files online because of the default settings of their software -- are more likely to be deterred by anti-piracy measures than "active" uploaders -- those who deliberately offer online the material they've bought, downloaded or ripped from rented DVDs. The population of passive uploaders is "vast," the survey found (roughly 80% of file-sharers fall into this category), and most members of this group have a hazy understanding of the legalities of their actions.
• The DRM technology used by online movie stores contributes to piracy by making those outlets and the goods they sell harder to use. But so does the studios' strategy of releasing movies in windows, which results in legitimate outlets having less content than illegal ones do.
• Although most illegal downloaders know they're violating the law, they don't believe they're downloading enough to be caught. The average BitTorrent users downloaded about two movies per month, but they told Interpret that they wouldn't face a serious risk unless they increased that rate to nearly 500.

One might assume that such surveys underestimate the amount of copyright infringement that's taking place -- after all, the participants are asked to admit to doing something that tens of thousands of people have gotten sued for. But unlike other illegal activities, file sharing is "something that people are perfectly happy talking about," Interpret co-founder Jason Kramer said.

Kramer and Raj Samtani, director of business development at Digimarc (a member of the Digital Watermarking Alliance), said one point of the study was to present watermarks as a less cumbersome alternative to DRM. "We've seen the stick really doesn't work," Kramer said. "The way we presented this to consumers is more of a carrot" -- part of a "new compact" between content companies and consumers. He framed it this way, speaking from the perspective of the studios and record labels: "If we're going to make this [content] available to you, if we're going to make it free of DRM, make it useful on multiple devices and not a big hassle for you, you're going to have to expect that if something illegal is done, we're going to have some sort of recourse."

Consumers have trouble accepting restrictions on the media they pay for, particularly when those limits make the media harder to consume. That's one reason the record companies ultimately dropped DRM from their 99-cent downloads. But Kramer said that when consumers understand the quid pro quo sought by the content companies -- that buying a copy of a movie or a song doesn't give the purchaser the right to share it with the rest of the world -- they're more willing to accept the terms of the deal, provided that the restrictions aren't onerous.

Samtani said he didn't believe encryption-based DRM "is going to be abandoned wholesale any time soon." Although watermarks are used today to trace content leaks and identify the sources of some infringements, the kind of system envisioned in the survey -- where infringing content can be detected as it travels through the Net -- would require a significant amount of work by ISPs and content owners. Some Hollywood executives harbor even greater ambitions for watermarks, using them to disable the playback of bootlegged movies. Such a feature may yet become routine in Blu-ray devices, although it remains a long shot for standard-definition discs.

Ideally, Samtani said, anti-piracy technologies like DRM and watermarks would be used not as a traffic cop but as an accountant, monitoring the flow of content online to support new modes of distribution. "We are at the early stages in some of those changes in business models," Samtani said. The shift enabled by new mechanisms such as watermarks will make the market much bigger, he added. "It's just a matter of getting through this transition, and getting people to embrace new modalities of doing business." That's no mean feat, but Samtani -- who used to work for a DRM company -- says he's seen a real change in the nature of the discussions with content providers. Part of that is a greater recognition of the need to balance the desire to protect content with consumers' interests. Said Samtani, "There are things you will hear about more openly in the next several months that I'm very, very encouraged about."

-- Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division.

Comments

[Davis Freeberg]

The way I see it watermarks have two fundamental flaws. First, it only addresses supply not demand. It may temporarily deter some people from posting videos, but it wouldn't take long for the professionals to find a way around it. Secondly, once a watermark can be spoofed it invalidates the entire scheme. Someone could argue that because technology to counterfeit the watermark exists, it raises reasonable doubt that it definitively came from them. Watermarks already exist on many devices, but if they ever started enforcing them, you can bet that people would start flooding the net with bogus files just so that this defense would exist.

[Henry]

No, it is not a "friendlier DRM" - properly implemented digital watermarks should be viewed as a receipt that can animate commerce & provide proper double-entry accounting for copies.

SDMI was an attempt to standardize the technology but fell victim to politics & continues on without any help from the likes of DWA.

Misleading information & dis-infomration concerning the technology has further been distorted by poor analysis as per this very article. Napster, anyone?

[Jon Healey]

Henry, you've described only one possible implementation of watermarks. Look at how the AACS standard uses watermarks for playback control -- how could that possibly be construed as "a receipt that can animate commerce"?

[Henry]

Jon:

With due respect, you too provide a narrow interpretation of the term "digital watermark". Broadly speaking my comment was referring to steganographic techniques in combination with cryptographic techniques. But steg provides what crypto cannot - plausible deniability. It is also about obfuscation & actor intent (someone has to "hide" the information & those attempting to erase have DMCA issues &/or unworkable content, correct?).

Your example is not "DRM", per se, which is a crypto-type wrapping of rules around content, AKA just another file format. And, "copy control" code being embedded is not "friendlier DRM' but smart use of bandwidth. It enables the AACS "control" to be integral with the signal (perhaps to survive transformation and also for robustness against compression? crypto alone can't do that; neither can DRM without wrapping & unwrapping with wasteful computation). It is a form of receipt as the content carries the code in order to work. Your $20 bill is worthless without a serial number. Plus that playback control code is likely to be unique to trace leaks & traitors, alike.

So, "animating commerce" is not only receipts as you have interpreted them IMHO (forensic/transactional/traceable/traitor-tracing watermarks, et al.) but also measured complexity utilizing crypto & steg. Meaning, we cannot stop copying but we can use speed bumps & understand that their is no long tail, just a need to grab as much revenue in as many channels as possible in shortened time frames.

Some things you might want to investigate to bear out your points - 1) does AACS count plays or offer additional goodies as a carrot to the consumer (DRM does not) 2) does AACS identify the device &/or mediums being fed it in some steganographic way (DRM does not) 3) does AACS enable upgrade of code in the ecosystem of the content being "protected" (DRM could do this but is not as robust to manipulations of the signal carrying code) 4) can AACS re-encode the signals in which "watermarks" are embedded? (DRM cannot).

The press was quite aggressive & IMHO misguided about watermarking & yet none seem to think there is anything wrong with DoubleClick or cookies or the way SEO is branded to small business owners and looks like spam to the rest of us. Digital watermarks are a very important but widespread field with many varied implementations and deployment scenarios - always have been.

Thanks for the response ...

[Jon Healey]

@Henry -- Fair points, all. I can't answer your questions about the AACS standard, but the better question is what the studios intend to do with the technology, rather than what it could do.

I do understand the technical distinction you were making between DRM and watermarks, but Kramer and Samtani both discussed watermarks as a tool for digitally managing rights. Samtani clearly shares your goal of using watermarks to expand commerce, not constrict it. But one of the purposes of the study was to persuade Hollywood that watermarks could be used to "manage" and protect content, reducing the need for encryption-based DRM systems that alienate consumers.

[Henry]

Indeed.

One issue that goes undiscussed, is that the industry that spent 10s if not 100s of billions of dollars on DRM is simply not willing to pay for watermarking, whatever the characterization. These folks did shut down a District Courtroom for DVD CCA over CSS several weeks ago: that Court presided over by the Judge who decided the Napster case. Meanwhile, deCSS lives on in song & haiku, etc. (Dr. David Touretzky at CMU).

Unless & until it becomes clear what it is that the "major studios" are defending against, consumers should not bear the cost of the business model[s] the studios seek. Recent studies show that alleged "pirates" buy up to 10Xs the amount of music as their "non-pirate" peers. I cannot be sure of these types of studies or the applicability to the movie business; but, the music industry is allegedly loosening terms for licensing to music start-ups (whatever that means?). In contrast, U2's manager was again on a rant recently - the Negativland experience seems to have lingered?

Perhaps the best case scenario is to use these myriad of techniques to objectively determine fair (use) & an equitable balance between what can be defined as "privacy" and what should be labeled "piracy". Copyright theft has been criminalized; yet, it is unclear that we have any idea how to balance the interests of the public with that of private industry. The technology & expertise exists & it must be paid for.

As to your last point, misguided efforts appear to drive consumers into end-to-end encryption schemes from which there will be no easy answer or solution. Though, answers and solutions require appropriate questions.

Again, I have always enjoyed your take! & appreciate the response. And, kids, please stop piracy!

[Henry]

sp error? "millions" ...