Interesting KPMG report on DRM

Peter Gutmann pgut001 at
Sun Oct 6 00:33:39 EDT 2002

KPMG have a report "The Digital Challenge: Are You Prepared?" available at in which they surveyed execs at
media companies and conclude that they're focusing too much on (trying to)
lock up content using encryption rather than how to do something useful with

  Digital content is getting a lot of attention - but not at the board level,
  where it is urgently needed. As a recent KPMG survey of top executives
  shows, media companies are focusing too much on encryption and other
  defensive technologies while failing to develop proactive strategies that
  recognize and leverage their online intellectual property assets.


  But the industry.s efforts to grapple with losses on this scale by locking
  away content behind multiple layers of protection - whether encryption,
  copyright protection, or authentication - have tended to detract from the
  user experience while failing to deliver the hoped-for revenue streams.

  Indeed, for all the publicity, expert attention, and corporate ingenuity
  devoted to digital piracy, it is striking that global content companies have
  not yet been able to find a working solution.

  This white paper, organized around a survey conducted for KPMG by The
  Economist Intelligence Unit, takes the industry.s pulse on The bottom line
  is that media companies need to shift their focus from a circle-the-wagons
  defense of digital intellectual property to innovative strategies for
  managing online content as a core revenue source. To achieve this shift,
  digital intellectual property needs to be valued properly, just like other
  assets on the balance sheet. Also, its protection needs to be treated as a
  key issue of corporate governance and given sustained and dedicated board-
  level attention.

  It is clear from the survey that media executives are trying to remain
  optimistic about the potential of digital content - but securing
  intellectual property rights is an uphill battle. In the quest for the right
  mix of measures to fight piracy, executives are relying heavily on
  encryption as well as reactive steps to police and punish violators. At the
  same time, however, many companies fail to conduct systematic accounting for
  their digital assets, or to pursue more proactive strategies to build new
  revenue streams from their online content.


  Media companies have so far failed to pioneer new business models that would
  rob piracy of its appeal. Preoccupied with defending the barricades against
  pirates, the industry has shown a deficit of creativity and innovation in
  rolling out products and services that can compete with the pirates. This
  was clear in KPMG.s survey, where only a handful of respondents saw offering
  potential abusers the chance to distribute content legally as a way of
  protecting digital intellectual property.

  In addition, the content industry remains hostage to its own strict
  interpretations of copyright laws and definitions of intellectual property.
  Most leading media organizations have their roots in traditional media
  formats - they still consider every bit of content they produce to be
  subject to copyright and they defend it - tooth and nail. However, today.s
  Internet world conflicts with this business model, as consumers expect more
  fluid boundaries and demand a free flow of information.

Good stuff, read the whole thing at


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