Thinking about DRM & the subscription pricing model

It seems clear to me that companies, Apple (with Apple TV) and Microsoft (with the XBox) in particular, are pushing to eliminate the need for physical media to watch movies. It does, in many ways, seem inevitable – bandwidth is cheap, storage space is cheap and discs are prone to scratching, etc.

I’m not particularly offended by DRM for this purpose. I loathe DRM on anything I own. It’s my feeling that I’ve bought it, I should be able to make 2 million copies, remix it, re-edit it, transcode it to whatever formats I feel. But the rental system it makes sense. Currently, I can rent a movie, keep it as long as I like, watch it as many times as I like, then return it. And for that privilege, along with those restrictions, I expect to pay much less for a rental than I do to own it. I’m a Zip member, and my current subscription settings allows me to rent an unlimited number of movies, but only 3 at a time. For this I pay $25/month. And it works out well. Most months, I receive 7-8 movies, or +/- $3/movie. However some months I only get 1 or 2, so it costs me more. The point is thought, is that I don’t have to think about the cost of a particular movie. I’m far more willing to give any movie a chance when I’m not paying specifically for that rental. I’ve watched (and enjoyed) many movies that I would never have gambled on had I needed to pay for it individually.

And this is the problem with both the current Apple TV and XBox offerings (beyond in the embarrassingly small collections when compared to Zip or Netflix) – I have to evaluate the individual item for cost. The same holds true for iTunes – tellingly, I have an eMusic account, for the simple reason that the cost is aggregated out and so I can take risks on individual tracks, sometimes even entire albums, because I don’t have to judge, in advance, if that particular track is worth $0.99. It’s purely a psychological difference, but regretting 1/40th of my $12 monthly is, for me, much better than regretting a single dollar spent (of course, the fact that each track at eMusic in reality about $0.30 helps too).

So what does this all boil down to? for media, and rentals in particular, a subscription model works well – certainly NetFlix has proven this. Beyond that, the DRM system needs to be more flexible to support this idea – set it up so that it knows in aggregate how many movies I am currently renting. Allow me to watch each of them as many times as I like, for as long as I like – or at least for a month or so before automatically ‘returning them’. Restrict me only  by how many I can be renting at a given time, but don’t make pay per transaction. I’m not convinced that current DRM models, which are tied to the individual media, really supports this. What I’m suggesting is that DRM models be tied to the individual consumer, rather than the media, to allow greater flexibility in pricing and consumption models. We know enough about online identities at this point (viz – the standard ‘5 devices/1 account’ models of DRM’d media stores) to be able to accomplish this. My gut tells me until control over consumption is handed back to the consumer, we won’t see mainstream acceptance of current digital delivery initiatives on a massive scale.