In the world of business, the supply and demand for a product is driven by the competitive nature of the industry. In North America and other predominantly capitalist nations, the world of business serves as the ultimate exemplification of the adversarial growth system, where companies need to keep a keen ear both on the demands of the consumer as well as the rumblings of the competition. The driving concept behind business is to make money from a competitive advantage; to offer a product or service to the masses that could be utilized to meet a certain need. This time-honoured concept, however, is lost on the European Union’s hottest mini-industry: the management of digital rights, or Digital Rights Management (DRM). Digital Rights Management is a cash crop waiting to ripen, a potentially huge business opportunity that has yet to manifest itself. And sadly, much to the dismay of smaller DRM developers in the European Union, one that may already have been monopolized by the largest software producer on the face of the planet.
Digital Rights Management treats legal rights in regards to digitized media. The copyrights for files such as .mp3, .wmv, .wma, .avi, and several other types of digital media fall under the jurisdiction of DRM firms. DRM is an invaluable tool for multimedia creators and developers, with the potential to reduce much of the hassle that currently bogs down the entire copyright process. It ensures owners and users that digital copyright material is properly managed, and as such is an industry that will eventually deal with the digital distribution of such media. Those in North America who subscribe to Apple’s iTunes service have already gotten their first taste of what the future of digital rights management has in store. iTunes is a service that offers fully legal downloads of mp3 files for a small price, generating a heavy volume of downloads from a wide spectrum of consumers: musical purists and teeny boppers alike flock to iTunes and download millions of songs every month. This potentially ultra-lucrative industry could be the future of media circulation, replacing the soon-to-be outdated formats of compact discs and digital video discs. One can understand the heightened interest of major corporations in the long-term growth of the currently fledgling digital rights management industry. In fact, by the year 2007, the digital rights management industry is projected to produce over $550 million dollars of revenue, with almost 70% of the projected income estimated to hail from Microsoft’s Windows environment.
The DRM firm Contentguard, one of the European Union’s leaders in the research and development of digital rights management, seems a prime candidate to ascend to the heights of the industry as it grows and progresses. However, with the financial backing of its newest investors, Contentguard’s future prominence in Europe’s digital rights management industry seems nearly guaranteed, an eventuality that needs only to gestate until demand for digital media skyrockets. How so? How could one company already come to the forefront of an industry that barely even exists, let alone turn an abounding profit? Simple: with financial backing from big-name Western conglomerate behemoths Microsoft and Time Warner, anything in the world of business is possible.
Following Microsoft and Time Warner’s proposed acquisition, a deal that would effectively give them control of Contentguard and its European distribution (not to mention invaluable appeal to its target market), the European Union’s European Commission (EC) launched an investigation into the nature of the acquirement. The EC argues that “the transaction might possibly create or strengthen a dominant position by Microsoft in the market for Digital Rights Management solutions.” In lamen's terms, the European Commission fears that if Contentguard works as a transatlantic conduit of Microsoft’s DRM expansion, it would stifle the livelihood of other Data Rights Managements companies to do business within the EU, thus creating a monopoly of an industry that has yet to properly materialize. The biggest dog in the business would basically become the first out the gate, readily armed with the resources to extinguish the nearest competitor.
The EC will have an uphill battle to face in probing the commercial intentions of Microsoft and Time Warner. As of now, both corporations have registered nary a blip on the radar of the digital rights management industry in native North America. Since several different types of digital media files exist (files created with one program or encryption code compared with files created by another), the ability for files to be compatible with certain devices is imperative to the success of a DRM company. This variance in file types creates several compatibility issues between the differing file formats. For example, a Microsoft media file is incompatible with a portable audio device produced by its competitor, Apple. This incompatibility would effectually force the consumer to invest wholly in Microsoft products, even if doing so were to be against their will. The EC’s intentions with this investigation is to probe whether or not the Contentguard acquisition will disadvantage or slow the industry’s interoperability standards, thus giving the advantage to multi-faceted mega-corporations such as Microsoft.
But now the question looms: what if Microsoft is trying to monopolize an industry so unimportant it doesn’t even technically exist yet? What is the bother to you? How does this seemingly insignificant business proposition stack up comparatively to the other ills in society that need addressing? The findings of the European Commission’s investigation could very well change the moral foundation of the ethical conduct that is increasingly disappearing in the modern industrial climate. If Microsoft and Time Warner are permitted to seize control of an entire industry from the moment of its inception, to what further lows will big business descend to extinguish the supposed “competitive advantage”? What will some insignificant competitor hold to these corporate Goliath’s if they have already won?
Although our society is adversely affected by the numerous commissions of corporate crime, the way Time Warner and Microsoft have chosen to do business is simply unacceptable by any social standard. How can you make a difference in all this? First things first, educate yourself. Learn which companies partake in sound business practices, and let that information factor into your future decisions. Also, there’s nothing wrong with supporting the little guy. In lieu of using products produced by massive corporate conglomerates, support those companies who offer similar products. Try Linux or Winamp instead of Windows and it’s tyrannical media player! What harm will it cause to learn a new interface, with some slight variances in functionality?
Chances are, you probably won’t read a story in your local newspaper exposing the greedy behaviour of these corporations, and as such the burden of awareness lies squarely on your shoulders. You won’t see a commercial featuring a train of runway models touting Microsoft for its mastery of corporate deception.
The day our society gets to that point, the loss of the competitive advantage will be a far cry from our real troubles.
In the world of business, the supply and demand for a product is driven by the competitive nature of the industry. In North America and other predominantly capitalist nations, the world of business serves as the ultimate exemplification of the adversarial growth system, where companies need to keep a keen ear both on the demands of the consumer as well as the rumblings of the competition. The driving concept behind business is to make money from a competitive advantage; to offer a product or service to the masses that could be utilized to meet a certain need. This time-honoured concept, however, is lost on the European Union’s hottest mini-industry: the management of digital rights, or Digital Rights Management (DRM). Digital Rights Management is a cash crop waiting to ripen, a potentially huge business opportunity that has yet to manifest itself. And sadly, much to the dismay of smaller DRM developers in the European Union, one that may already have been monopolized by the largest software producer on the face of the planet.