Do I have to protect my content with DRM ? (The DRM equation)

by Ploum on 2007-05-02

So, you are the producer/publisher of a content. You want to make money of it. As much money as possible. You are wondering if you must use DRM or not.

First question

It might be obvious but, at first, ask yourself : « Why do I want to use DRM on my content? ». To fight piracy or illegal copies? Bad answer! Your goal is NOT to fight piracy! Your goal is to earn money. Lots of money. If you could make more money with the help of piracy, would you still fight it? Of course not. So keep in my mind that you want to use DRM to make more money of your content. Nothing else.

But piracy will make me lose money…

Now, rename « piracy » by « a free network that promote my content everywhere in the world ». It’s not anymore that evident that piracy will make you lose money. Simply replacing one word by a synonym can give you a brand new vision. Would you fight against « a free network that promote my content everywhere in the world »? So, here we cannot reply surely. Let’s focus on « making money », not on piracy or anything else.

The DRM equation

Now, the question is and only is « Will I earn more money with DRM or not? ».

There is a simple answer call the DRM equations :

DRM profit = Wins – Devel – Unit – Court – Boycott – Hardware – Support – Refund

With the following terms :

DRM profit : the difference between the money you will make with DRM and the money you will make without. Might be negative.
Wins : The exact number of people who tried to illegally obtain your content but could not due to DRM and that finally bought the original, legal version.
Devel : The full development cost of your unbreakable DRM solution, including years of salary for engineers, specialists, …
Unit : Due to the DRM, the unit cost of fabrication of one of your product is slightly more. Multiply this accordingly with your whole production.
Court : The total cost of all your trials that try to forbid this 12 years old child to publish his crack of your DRM on the Internet. You might include here all the legal stuffs related to the fact that your DRM method was patented by someone else before you.
Boycott : Include here all the sells that were never done because a tiny group of people boycott content with DRM. You can include here the bad press linked to DRM.
Hardware : Include here all the negotiation to have hardware manufacturer support your DRM format.
Support : The whole support cost of the DRM. You will have indeed plenty of clients that will call because « your product is not working on their device ». You have to carefully explain the whole thing to them and to double the number of your hotliners.
Refund : All the products you have to refund because it was not working as expected due to DRM. People don’t understand basic principles like « to read my content, you have to use only my hardware and my software ». So, if they buy your content without having your hardware/software, you will have to refund them.

That’s the theory. Now, the practical part implies that you have to compute every term. To help you a bit, you might want to now that the experimentation shows that Wins is null or negligible[1].

In the best cases, Wins might be almost equal to Boycott.

So, now you can easily compute how much money you will earn with DRM. Simply do the math and make your choice accordingly.

Notes

[1] Indeed. Most piracy is done by downloading illegaly the content. Which does not contain any DRM. The DRM is only available on the original medium, it means only people who actually paid for your content might be annoyed by the DRM