Better user experience could combat illegal P2P filesharing

Valerie | 10 Jul 2009, 12:27

Studios and content owners need to improve online user experience, and make effective use of digital rights management (DRM) technologies, or risk boosting illegal peer-to-peer downloading, according to a new report from In-Stat.

The report, “Adopting Digital Rights Information Management” which analyses content consumption behaviour in the US, calls for a shift in monetization strategy to counter the illegal downloading of video content.

Key findings include:
•    US broadband households download 14 billion videos each year; 85% are illegal
•    In-Stat sees watermarking becoming a growing technology to track licensed usage rights
•    Converting’ power user’ households from P2P to legal video services would generate $1.4 billion in subscription revenue and $1.1 billion in advertising revenue

DRM has long been a point of contention in the content industries, with critics arguing that restrictions on the use of content will limit creativity.  A number of recent high profile decisions to remove DRM technology from their products, announced by companies such as Orange and Virgin have been welcomed.

Keith Nissen, an In-Stat analyst, argues that the best way forward for DRM technology is to enable consumers to watch content in more ways on more devices, rather than using it to prevent consumers from making backups or transferring content to devices. In addition, he says that ISPs, cable companies and electronics manufacturers could use compatible DRM in their devices to ensure the user has paid to watch the film or TV show on the device they are using.

Nissen concluded:

“What is needed is a new approach to monetizing digital content including moving a relatively small group of consumer households that do the bulk of P2P downloading (power users), to legal services. The question is whether the video industry wishes to control its own destiny, or get crushed by technological change, similar to what is occurring in the music business.”