As we've said many times before, DRM is not about preventing piracy, it's about giving entertainment companies control over disruptive innovation. Here's the latest example: tomorrow DVD-CCA (the entity that controls the CSS encryption standard for DVDs) will be voting on an amendment to the CSS license that is designed to put a disruptive innovator, Kaleidescape, out of business (read Kaleidescape's letter about it here).

As everyone knows, CSS has been broken for years, and despite early lawsuits against products like DeCSS and DVD X Copy, easy-to-use DVD copying software remains available for free from many sources online (the print magazine MacWorld reviews one of them, Handbrake, in this month's issue). Yet despite the fact that CSS has been reduced to a joke as a bar against DVD ripping, movie studios continue to embrace it, using it on every commercial DVD release. Why? Because by using CSS, the movie studios (acting through DVD-CCA) can force technology companies to sign a license agreement before they build anything that can decrypt a DVD movie.

This gives the movie studios unprecedented power to influence the pace and nature of innovation in the world of DVDs. Any new feature (like copying to a hard drive) must first pass muster in the 3-way "inter-industry" negotiation (movie studios, incumbent consumer electronic companies, and big computer companies) that is DVD-CCA. In other words, you must get permission (from your adversaries and competitors!) before you innovate. If these had been the rules in the past, there would never have been a Betamax or an iPod.

So this brings us back to Kaleidescape, which makes a highly-acclaimed digital "jukebox" for DVD movies. It's expensive (~$20,000), and certainly won't move the needle when it comes to unauthorized DVD ripping in a world that already has plenty of free DVD ripper software. Kaleidescape played by the rules, obtaining a DVD-CCA license to use CSS. Yet DVD-CCA sued anyway, but lost (the judge concluded that the CSS license was so convoluted that the "no persistent copies" requirement wasn't even part of the agreement).

Now three motion picture companies (Fox, Warner, Disney) have introduced an amendment that would change the CSS license to put Kaleidescape out of business. Cloaked as an amendment to permit "Managed Copies," it tells innovators "sure, you can add a copying feature, but only if you do it our way." But (always read the fine print), movie studios are not obligated to "enable" Managed Copying on any of their movies. So the only sure thing that the amendments will accomplish is to exclude Kaleidescape from the CSS license.

And that's the lesson for today: it doesn't matter whether DRM is effective at stopping unauthorized copying (it's not), so long as it gives the entertainment industry the ability to veto (retroactively, in Kaleidescape's case) disruptive innovation in the mainstream marketplace. And that's why we're likely to be stuck with DRM on movies for some time to come, whether or not their DRM systems (CSS, AACS, or BD+) are broken.

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