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CD DRM: Attacks on Disc Recognition

January 26, 2006 by

Ed and I are working on an academic paper, “Lessons from the Sony CD DRM Episode”, which will analyze several not-yet-discussed aspects of the XCP and MediaMax CD copy protection technologies, and will try to put the Sony CD episode in context and draw lessons for the future. We’ll post the complete paper here next Friday. Until then, we’ll post drafts of a few sections here. We have two reasons for this: we hope the postings will be interesting in themselves, and we hope your comments will help us improve the paper.

Today’s excerpt is from the middle of the paper, where we’re wading through details about the copy protection systems and the techniques they use to recognize protected CDs.

Please note that this is a draft and should not be formally quoted or cited. The final version of our entire paper will be posted here when it is ready.

Attacks on Disk Recognition

The active protection mechanisms introduced earlier selectively regulate access to raw CD audio, blocking access to the audio tracks on albums protected with a particular scheme while allowing access to all other titles. To accomplish this, the schemes install a background process that interposes itself between applications and the original CD driver. In MediaMax, this process is a kernel-mode driver called sbcphid.sys. XCP uses a pair of filter drivers attached to the CD-ROM and IDE devices called crater.sys and cor.sys. In both schemes, the active protection drivers examine each disc that is inserted into the computer to see whether access to it should be restricted. If the disc is recognized as copy protected, the drivers monitor for attempts to read the audio tracks, as would occur during a playback, rip, or disc copy operation, and corrupt the audio returned by the drive to degrade the listening experience. MediaMax introduces a large amount of random jitter, making the ripped audio sound like it has come from a badly scratched or damaged CD; XCP replaces the audio with random noise.

Each scheme’s active protection software interferes with attempts to rip or copy any disc that is protected by the same scheme, not merely the disc from which the software was installed. This requires some mechanism for identifying discs that are to be protected. This section discusses the security requirements for such a recognition system, describes the design and limitations of the actual recognition mechanism employed by the MediaMax scheme, and presents an improved design that better satisfies the requirements.

Recognition Requirements

Any disc recognition system must involve detecting some identifying feature on discs protected by a particular scheme. Ideally, such a feature would satisfy these requirements:

  1. Uniqueness. The feature should identify protected discs without accidentally triggering the copy protection on unprotected titles.
  2. Detectability. It should be possible for the active protection drivers running on client systems to reliably and quickly detect the feature in protected discs. In practice, this limits the amount of audio that can be read from the disc before deciding whether to apply protection.
  3. Indelibility. The feature should be difficult to remove without substantially degrading the quality of the audio; that is, it should be difficult to make a copy of the copy protected disc that does not itself trigger the protection.
  4. Unforgeability. It should be difficult to apply the feature to an unprotected album without the cooperation of the protection vendor, even if the adversary has access to protected discs.

This last requirement stems from the business strategies of the copy protection vendors. As discussed in earlier, many of these vendors are pursuing a platform building strategy. The biggest obstacle to the success of an active protection system is getting the protection software installed on client machines. Once installed, the software can regulate access to all discs protected by the scheme, even if the user learns to disable autorun or refuse future CD DRM installation requests. Thus each completed installation increases the effectiveness of the protection platform and heightens its value to the protection vendor and its music label clients.

Being widely installed adds value to these copy protection systems, but it also exposes them to a new class of attacks. The protection companies earn revenue from record labels who license their schemes, typically paying some fee per title or per copy. This revenue stream may be threatened if disc publishers can mark their discs as protected without paying.

There are advantages and disadvantages for the person placing the unauthorized marks. Copyright would prohibit rogue publishers from distributing an installer for the active protection software, though they might depend on the existing installed base from licensed titles. They would also be prevented from employing the components of the protection software that allow users to access restricted copies of the music; however, they could create their own software to provide this capability if they desired. On the other hand, free riding publishers would not be restricted to marking their disc for only one scheme. By identifying their discs as copy protected with multiple schemes, they could invoke multiple layers of security and provide stronger protection than is available with any single technique, all without paying. (It is possible that protection producers could have legal remedies against such free riders, such as through a patented identification feature, but we are unaware of any patents that cover the identification features known to be in use. Even if some kind of legal remedy is available, it’s worth designing the mark to prevent the problem too, at least if the cost of doing so is low.) Preventing free riding by publishers requires some kind of disc authentication mechanism to control access to installed active protection software—a meta-copy protection technique.

How MediaMax Recognizes Protected Discs

To find out how the disc recognition mechanisms employed by CD DRM systems stack up the ideal requirements, we examined the recognition system built into MediaMax CD-3 and MM-5 systems. The MediaMax system drew our attention because MediaMax’s creators have touted their advanced disc identification capabilities, including the ability to identify individual tracks within a compilation as protected, and well as their platform-building strategy. (The XCP scheme appears to use a less sophisticated disc recognition system based on a marker stored in the data track of protected discs. We may talk more about it later.)

We determined how MediaMax identifies protected albums by tracing the commands sent to the CD drive with and without the active protection software running. These experiments took place on a Windows XP virtual machine running on top of a Fedora Linux host system, which we modified by patching the kernel IDE-SCSI device to log all drive activity.

With this setup we observed that the MediaMax software executes a disc recognition procedure immediately upon the insertion of a CD. The MediaMax driver reads two sectors of audio data at a specific offset from the beginning of audio tracks—approximately 365 and 366 frames in (a CD frame is 1/75 second). On unprotected discs, the software scans through every track in this way, but on MediaMax-protected albums, it stops after the first three tracks, apparently having detected an identifying feature. The software decides whether or not to block read access to the audio solely on the basis of information in this region, so we inferred that the identifying mechanism takes the form of an inaudible watermark embedded in this part of the audio stream. (By locating the watermark nearly five seconds after the start of the track, MediaMax reduces the likelihood that it will occur in a very quiet passage, where it might be more audible, and makes it more difficult to crop out.)

Locating the watermark amid megabytes of audio might have been difficult, but we had the advantage of a virtual Rosetta Stone. The actual Rosetta Stone is a 1500 lb. granite slab unearthed by French archaeologists in Rosetta, Egypt, in 1799. A single Ptolemaic decree is written on the stone in three scripts: ancient hieroglyphics, demotic (simplified) hieroglyphics, and Greek. Comparing these inscriptions provided the key to deciphering Egyptian hieroglyphic texts. Our Rosetta Stone was a single album, Velvet Revolver’s Contraband (BMG, 2004), released in three different versions: a U.S. release protected by MediaMax, a European release protected by a passive scheme developed by Macrovision, and a Japanese release with no copy protection. We decoded the MediaMax watermark by examining the differences between the audio on these three discs. Binary comparison revealed no differences between the releases from Europe and Japan; however, the MediaMax-protected U.S. release differed slightly from the other two in certain parts of the recording. By carefully analyzing these differences—and repeatedly attempting to create new watermarked discs using the MediaMax active protection software as an oracle—we were able to deduce the structure of the watermark.

The MediaMax watermark is embedded into the audio of each track in 30 clusters. Each cluster is made up of 288 marked 16-bit audio samples followed by 104 unaltered samples. Three mark clusters exactly fit into one 2352-byte CD audio frame. The watermark is centered at approximately frame 365 of the track; though the detection routine in the software only reads two frames, the mark extends several frames to either side of the designated read target to allow for imprecise seeking in the audio portion of the disc (a typical shortcoming of inexpensive CD drives). The MediaMax driver detects the watermark if at least one mark cluster is present in the region read by the detector.

A sequence of 288 bits we call the raw watermark is embedded into the 288 marked audio samples of each mark cluster. A single bit of the raw watermark is embedded into an unmarked audio sample by setting one of the three least significant bits to the new bit value (as shown in bold) and then patching up the two other bits, according to this table:

(This design seems to be intended to lessen the audible distortion caused by by setting one of the bits to the watermark value. The change in the other two bits reduces the magnitude of the difference from the original audio sample, but it also introduces a highly uneven distribution in the three LSBs that makes the watermark easier to detect or remove.)

The position of the embedded bit in each sample follows a fixed sequence for every mark cluster. Each of the 288 bits is embedded in the first-, second-, or third-least-significant bit position of the sample according to this sequence:

2,3,1,1,2,2,3,3,2,3,3,3,1,3,2,3,2,1,3,2,2,3,2,2,2,1,3,3,2,1,2,3,3,1,2,2,3,
1,2,3,3,1,1,2,2,1,1,3,3,1,2,3,1,2,3,3,1,3,3,2,1,1,2,3,2,2,3,3,3,1,1,3,1,2,
1,2,3,3,2,2,3,2,1,2,2,1,3,1,3,2,1,1,2,1,1,1,2,3,2,1,1,2,3,2,1,3,2,2,2,3,1,
2,1,3,3,3,3,1,1,1,2,1,1,2,2,2,2,3,1,2,3,2,1,3,1,2,2,3,1,1,3,1,1,1,1,2,2,3,
2,3,2,3,2,1,2,3,1,3,1,3,3,3,1,1,2,1,1,2,1,3,3,2,3,3,2,2,1,1,1,2,2,1,3,3,3,
3,3,1,3,1,1,3,2,2,3,1,2,1,2,3,3,2,1,1,3,2,1,1,2,2,1,3,3,2,2,3,1,3,2,2,2,3,
1,1,1,1,3,2,1,3,1,1,2,2,3,2,3,1,1,2,1,3,2,3,3,1,1,3,2,1,3,1,2,2,3,1,1,3,2,
1,2,2,2,1,3,3,1,2,3,3,3,1,2,2,3,1,2,3,1,1,3,2,2,1,3,2,1,3

The 288-bit raw watermark is detected by the active protection software only when it has certain properties, as shown in the sequence below. In the 288-bit sequence, 96 positions have fixed bit values, either 0 or 1. The trailing 32 positions have arbitrary values (as indicated by _), and can be used to store a 32-bit disc-specific value. The other 192 positions are divided into 32 groups of linked values (denoted a–z and alpha-zeta). In each group, three positions share the same value and three share the complement value. This allows the scheme to encode a second 32-bit value, though in actual discs it appears to be a different random value in each of the 30 mark clusters.

Attacks on the MediaMax Watermark

The MediaMax watermark fails to satisfy the indelibility and unforgeability requirements of an ideal disc recognition system. Far from being indelible, the mark is surprisingly brittle. Most advanced designs for robust audio watermarks manipulate the audio in the frequency domain and attempt to resist removal by lossy compression, multiple conversions between digital and analog formats, and other common transformation. In contrast, the MediaMax watermark is applied in the time domain and is rendered undetectable by even minor changes to the file. An adversary without any knowledge of the watermark’s design could remove it by converting the tracks to a lossy format like MP3 and then burning them back to a CD, which can be accomplished easily with standard consumer applications. This would result in some minor loss of fidelity, but a more sophisticated adversary could prevent the mark from being detected with almost no degradation by flipping the least significant of one carefully chosen sample from each of the 30 watermark clusters, thereby preventing the mark from exhibiting the pattern required by the detector.

The MediaMax watermark also fails to satisfy the unforgeability requirement. The mark’s only defense against forgery is its complicated, unpublished design, but as is often the case this security by obscurity has proved tedious rather than impossible to defeat. As it turns out, an adversary needs only limited knowledge of the watermark–its location within a protected track and its confinement to the three LSBs of each sample–to forge it with minimal loss of fidelity. Such an attacker could transplant the three LSBs of each sample within the watermarked region of a protected track to the corresponding sample from an unprotected one. Transplanting these bits would cause distortion more audible that that caused by embedding the watermark since the copied bits are likely to differ by a greater amount from the original sample values; however, the damage to the audio quality would be limited since the marked region is only 0.4 seconds in duration. A more sophisticated adversary could apply a watermark to an unprotected track by deducing the full details of the structure of the watermark, as we did; she could then embed the mark in an arbitrary audio file just as well a licensed disc producer.

Secure Disc Recognition

Having shown that the MediaMax watermark fails to provide either strong resistance to removal or strong resistance to forgery, we ask whether it is possible to securely accomplish either or both of these goals.

As far as indelibility is concerned, watermarking schemes have a poor history of resisting removal. This is especially true against an adversary who has oracle access to the watermark detector, as was the case with a previous application of watermarks to audio copy protection, SDMI, and with CD DRM systems. Making marks that are both indelible and unforgeable is likely much more difficult. There seems to be tension between marks that are difficult to remove and ones that are hard to forge. Enforcing both requirements creates two ways to fool the detector–by rendering the mark invisible and by making it appear forged. If, as in CD DRM, either situation leads to the same result (no protection), the attacker’s power is multiplied.

In contrast, a mark strongly robust to forgery is simple to create based on digital signatures if we aren’t concerned with its being easy to remove. A very simple scheme works as follows:

  • To sign an audio track, the licensed publisher reads a fixed portion L1 of the audio data (say, the first ten seconds), then computes a cryptographic hash of L1 and signs it using a public key signature algorithm to derive the signature SL1 := SignKS(Hash(L1)). SL1 is then stored at a second location in the track by setting the LSB of each sample in the region to the corresponding bit in the signature. A 320-bit DSA signature could be embedded in this way using approximately the same space as one mark cluster of the MediaMax watermark.

  • The publisher keeps the signing key KS secret, and builds the corresponding verification key KV into the client software. When presented with a CD, the software checks for a valid signature. First it reads the audio from the signed area of the track and hashes it, and it locates and extracts the signature stored in the LSBs in the second mark location. Next, it verifies the signature on the hash using KV. If the signature is correct, the watermark is valid and genuine; otherwise, forgery or data corruption is indicated.

Forging such a mark would require defeating the digital signature scheme or splicing both L1 and SL1 from a legitimately marked album. We set L1 to be several seconds of audio to make such splicing less appealing.

Clearly this watermark is highly vulnerable to removal. If even a single bit of the hashed region is changed, the mark will not be recognized as valid. Yet the watermark MediaMax actually uses is also vulnerable to corruption by a single bit too while being far less resistant to forgery. Robustness to removal, while desirable in principle, is of limited value in real CD DRM applications. Removal of the watermark is unlikely to be the weakest link protecting the audio, and while the gains from creating a more indelible watermark are slight, the loss to free riders from an easily forgeable mark is potentially much larger.

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CD DRM: Threat Models and Business Models

January 24, 2006 by

Alex and I are working on an academic paper, “Lessons from the Sony CD DRM Episode”, which will analyze several not-yet-discussed aspects of the XCP and MediaMax CD copy protection technologies, and will try to put the Sony CD episode in context and draw lessons for the future. We’ll post the complete paper here next Friday. Until then, we’ll post drafts of a few sections here. We have two reasons for this: we hope the postings will be interesting in themselves, and we hope your comments will help us improve the paper.

Today’s excerpt is from a section early in the paper, where we are still setting the scene before the main technical discussion begins:

Threat Models and Business Models

Before analyzing the security of any system, we need to ask what the system is trying to accomplish: what its threat model is. In the case of CD DRM, the system’s goals are purely economic, and the technical goals of the system exist only to protect or enable the business models of the record label and the DRM vendor. Accordingly, any discussion of threat models must begin and end by talking about business models.

It is important to note that the record label and the DRM vendor are separate entities whose goals and incentives are not always aligned. Indeed, we will see that incentive differences between the label and the DRM vendor can be an important factor in understanding the design and deployment of CD DRM systems.

Record Label Goals

The record label would like to prevent music from the CD from becoming generally available on peer-to-peer file sharing networks, but this goal is clearly infeasible. If even one user succeeds in ripping an unprotected copy of the music and putting that copy onto P2P networks, then the music will be generally available. Clearly no CD DRM system can be nearly strong enough to stop this from happening; and as we will see below, real systems do not even try to achieve the kind of comprehensive coverage of all major computing platforms that we would needed as a prerequisite for stopping P2P sharing of protected music. We conclude that the goal of CD DRM systems cannot be to prevent P2P file sharing.

The record label’s goal must therefore be to stop many users from making disc-to-disc copies or from engaging in other forms of local copying or use of the music. By preventing local copying, the record company might be able to sell more copies of the music. For example, if Alice cannot make a copy of a CD to give to Bob, Bob might buy another copy from the record label.

By controlling other local uses, the record company might be able to charge extra fee for those uses. For example, if the record label can stop Alice from downloading music from a CD into her iPod, the label might be able to charge Alice an extra fee for iPod downloads. Charging extra for iPod downloads creates a new revenue stream for the label, but it also reduces the value to users of the original CD and therefore reduces the revenue that the label can extract from CD sales. Whether the new revenue stream outweighs the loss of CD revenue depends on detailed assumptions about customer preferences, which may not be easy for the label to determine in practice. For our purposes, it suffices to say that the label wants to establish control over the uses made by at least some users, because that control will tend generally to increase the label’s profit.

We note also that the record company’s profit-maximizing strategy in this regard is largely independent of the contours of copyright law. Whether the label would find it more profitable to control a use, as opposed to bundling it with the CD purchase, is a separate question from whether the law gives the label the right to file lawsuits relating to that use. Attempting to enforce copyright law exactly as written is almost certainly not the record label’s profit-maximizing strategy.

Monetizing the Platform

Even beyond its effect on controlling copying and use of content, CD DRM can generate revenue for the record label because it installs and runs software on users’ computers. The label can monetize this installed platform in various ways. For example, the DRM software comes with a special music-player application which is used to listen to the protected disc. This application can display advertisements or other promotional material that creates value for the label. Alternatively, the platform can gather information about the user’s music listening habits, and that information can be exploited for some business purpose. If these tactics are taken too far, the DRM software can become spyware. Even if these tactics are pursued more moderately, users may still object; but the record company may use these tactics anyway if it believes the benefits to it outweigh the costs.

DRM Vendor Goals

The DRM vendor’s primary goal, obviously, is to provide value to the record label, in order to maximize the price that the vendor can charge the label for using the DRM technology. If this were the only factor, then the incentives of the vendor and the label would be perfectly aligned and there would be no need to consider the vendor’s incentives separately.

However, there are at least two ways in which the DRM vendor’s incentives diverge from the record label’s. First, the vendor has a much larger tolerance for risk than the label does. The label is a large, established business with a valuable brand name. The vendor (at least in the cases at issue here) is a start-up company struggling to establish itself. The label has much more to lose than the vendor does if something goes horribly wrong. Accordingly, we can expect the vendor to be much more willing to accept security risks than the label is.

The second incentive difference is that the vendor can monetize the installed platform in ways that are not available to the record label. For example, once the vendor’s software is installed on a user’s system, the software can control copying and use of other labels’ CDs. Having a larger installed base makes the vendor’s product more
attractive to other labels. Because the vendor gets this extra benefit from installing the software, the vendor has an incentive to be more aggressive about pushing the software onto users’ computers than the label would be.

In short, the vendor’s incentives diverge from the label’s incentives in ways that make the vendor more likely to (a) cut corners and accept security and reliability risks, and (b) push its software onto more user’s computers, even in some cases where the label would prefer to do otherwise. If the label knew everything about how the vendor’s technology worked, then this would not be an issue – the label would simply insist that the vendor protect its interests. But if some aspects of the vendor’s design are withheld from the label as proprietary, or if the label is not extremely diligent in monitoring the vendor’s design choices – both of which are likely in practice – then the vendor will sometimes act against the label’s interests.

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Open Thread: SonyBMG Lawsuit Settlement

December 29, 2005 by

SonyBMG has reportedly reached a settlement agreement in the class action lawsuits. Alex Eckelberry has posted the motion proposing the settlement, and a brief summary of its terms. The settlement must be approved by a court before taking effect.

We’re on holiday hiatus, so I won’t analyze the settlement now. Feel free to discuss it in the comments, though.

(Update: Discussion had already started in the comments on another post, starting here. It has moved over here now.)

(Update 2: Jim Tyre pointed out that what I had previously called the “settlement” was actually a motion asking the court to approve the settlement. I modified the text to reflect this, and I added a link to the actual settlement.)

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Sony CDs and the Computer Fraud and Abuse Act

December 21, 2005 by

We’ve written plenty here about the adventures of SonyBMG, First4Internet, and SunnComm/MediaMax in CD copy protection. Today, I want to consider whether the companies violated the Computer Fraud and Abuse Act (CFAA), which is the primary Federal law banning computer intrusions and malware. A CFAA violator is subject to criminal enforcement and to civil suits filed by victims.

A major caveat is in order: remember that although I have studied this statute, I am not a lawyer. I think I know enough to lay out the issues, but I won’t pretend to give a firm legal opinion on whether the companies have violated the CFAA. Also, bear in mind that the facts are different as to First4Internet (which designed and distributed the XCP software), SunnComm/MediaMax (which designed and distributed the MediaMax software), and SonyBMG (which distributed both software systems but may have known less about how they worked).

There are two relevant provisions in the CFAA. The first one, which I’ll call the “spying provision”, says this:

Whoever … intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains … information from any protected computer if the conduct involved an interstate or foreign communication … shall be punished …

The second one, which I’ll call the “damage provision”, says this:

Whoever … intentionally accesses a protected computer without authorization, and as a result of such conduct, causes damage … shall be punished …

(“Protected computer” is defined in the CFAA to include nearly every computer at issue here.)

Let’s look first at the spying provision. We know that the programs obtained information from the user’s computer (about how the user used the CD drive) and sent that information across the Net to either SonyBMG or SunnComm. In most cases that would be interstate communication. So the main issue would seem to be whether the companies, in installing their software on a user’s computer, intentionally accessed the computer without authorization or exceeded authorized access.

According to the CFAA,

the term “exceeds authorized access” means to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter

In the case of XCP, the software that gathers and sends information only gets installed if the user agrees to an End User License Agreement (EULA), so the company is authorized to access the computer. They might still have exceeded authorized access, if the EULA’s terms did not entitle them to obtain some information that they obtained. Given the vagueness of the EULA language, this seems like a close call. Eric Goldman has argued that a court would give XCP the benefit of the doubt.

Things look worse for MediaMax. The company sometimes installs its software even if the user rejects the EULA. In this case the company is not authorized to put software on the user’s computer or to cause that software to run. But they do it anyway. It’s hard to see how that’s not either accessing without authorization or exceeding authorized access. It looks like MediaMax is in jeopardy on the spying provision.

Sony’s position here is interesting. They shipped the affected software, but they may not have known as much about how it worked. The spying provision applies only if the company accessed the computer (or exceeded authorized access) “intentionally”. If Sony didn’t know that MediaMax installed when the user denied the EULA, then Sony may be in the clear even if MediaMax itself is in violation.

Let’s turn now to the damage provision. This provision covers access without authorization, but doesn’t cover exceeding authorization. As I understand it, this means that you’re not in violation if you had any kind of authorization to access the computer.

The provision also requires that there be “damage”. According to the CFAA, damage includes “any impairment to the integrity or availability of data, a program, a system, or information, that causes loss aggregating at least $5,000 in value during any 1-year period to one or more individuals”. As I understand it, the cost of detecting and mitigating a problem, including the value of time spent by people on detection and mitigation, can be included in the loss. Given that, there can be little doubt that each of these software systems caused damage of more than $5000 total. For example, if a system was installed on 100,000 computers and imposed at least five cents in detection and mitigation costs on each one of those computers, the aggregate damage is more than $5000.

It seems clear, too, that the installation of a rootkit, or the installation of software without permission – not to mention the security vulnerabilities caused by the software – constitutes an impairment to the integrity of users’ systems.

So the main sticking point in the damage provision would seem to be access without authorization. XCP gets a limited authorization to access the computer when the user agrees to the EULA, so they would seem to be okay. But when MediaMax installs despite the user rejecting the EULA, that looks to me like access without authorization. Again, it looks like MediaMax may be in trouble.

The word “intentionally” pops up in again in the damage provision, and again it might protect SonyBMG, if SonyBMG did not know that the software was designed to install without authorization.

There are two more issues regarding the damage provision. The first one is a possible objection from MediaMax, claiming that although the unauthorized installation may have been intentional, the damage was not intentional. As I understand it, courts have rejected this reading of the CFAA, holding that only the access must be intentional, but the statute applies even if the damage was an accident. It’s easy to understand why Congress would have wanted to write the law that way, to say that if you intentionally break in to somebody’s computer, you are responsible for any damage you cause to that computer, even if the damage happens accidentally.

The last issue is whether the companies had authorization to install or run software immediately upon insertion of the CD into the computer, even before the user is presented with a EULA. I think there’s a good argument that the companies ran more software than they were authorized to run in that situation, but it seems like a stretch to argue that they had no authorization to do anything at all. It seems reasonable to allow them to at least run enough software to pop up a EULA. In any case, it would be hard to find $5000 in damage from this behavior.

So here’s my very tentative bottom line: XCP is in the gray area but is probably okay; MediaMax may well be in violation; and Sony’s status depends on how much they knew about what the MediaMax software did. Perhaps a court hearing one of the SonyBMG lawsuits will give us its own analysis.

UPDATE (1:30 PM EST): In the comments, Sam points out an important issue that I missed in writing this post. Even if SonyBMG did not know from the beginning that MediaMax installs and runs without authorization, they did find out about it eventually, and they kept shipping MediaMax discs anyway. So the software’s behavior would seem to be intentional on Sony’s part, at least with respect to those discs sold after Sony learned about the MediaMax behavior. ]

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Is DRM Good for You?

December 19, 2005 by

Randy Picker, a principled DRM (copy protection) advocate, had an interesting comment on one of my prior posts about the Sony incident. Here’s the core of it:

Assume for now that you are right that DRM leads to spyware; all that means is that we need to figure out whether we should or shouldn’t favor active protection/supervision environments.

That gets us to the central point: namely the fact that consumers don’t want it doesn’t tell us anything about whether it is in the joint interests of consumers and producers. I spent the morning writing my exam and then will have to grade it after the students take it (no grad student graders for law profs). By far and away the worst part of the job, and I certainly don’t want it as part of the job, but that doesn’t mean that it isn’t jointly sensible.

Putting that point slightly differently, consumers may gain more from a DRM world than they would from whatever alternative world emerges without DRM; those subject to restrictions rarely want them but restrictions are frequently welfare maximizing; the fact that one party would like to get rid of the restrictions tells me little (nothing, probably) about whether the restriction is in the joint interest of the parties to the transaction.

It’s true in principle that an arrangement can be unwanted but ultimately good for those on whom it is imposed; but I don’t think that observation matters much in the specific case of CD DRM.

To understand why, let’s look at a case where a similar argument has traditionally worked: copyright. Copyright can be understood as an agreement among all of us that we will not infringe. Even though each of us individually would prefer to use works without paying, we understand that if we all refrain from infringing this increases incentives for authors, leading to the creation of more works we can enjoy. By making and keeping this copyright deal with each other, we come out ahead. (That’s the theory anyway. We all know what happens when the lobbyists show up, but work with me here, okay?)

One of the practical problems with this kind of deal is that each individual can gain by defecting from the deal – in the case of copyright, by infringing at will. If enough people defect, the deal could collapse. This danger is especially acute when it’s technologically easy to defect. Some people argue that this is happening to the copyright deal.

Anyway, what Randy is suggesting is that there might be a similar deal in which we all agree to accept some kind of DRM in order to boost incentives for authors and thereby cause the creation of more works than would otherwise exist. I think that if we weigh the costs and benefits, that would be a bad deal. And I’m especially sure it’s a bad deal for CD DRM. Let me explain why.

First, it turns out to be easy technologically to defect from the CD-DRM deal. Experience with the copyright deal teaches us that when it’s easy to defect, many people will, whether we like it or not.

Second, the costs of the CD-DRM deal seem much clearer than the benefits. Allowing spyware-DRM on our computers will open loopholes in our anti-spyware defenses that will foster more spyware infections. And as we have seen already, spyware-DRM will itself expose us to security risks. That’s the cost side. On the benefit side, we have only the dubious premise that CD-DRM might boost record sales. The costs are more certain, and larger.

The best argument against the CD-DRM deal, though, is that it is inferior to the copyright deal. If we’re going to make and keep a deal of this general type, the copyright deal is the one to pick. Compared to the copyright deal, the CD-DRM deal is a loser: costs are higher, benefits are the same at best, and the deal is just as easy to defect from. If we can’t keep the copyright deal, then we won’t be able to keep the CD-DRM deal either. But more to the point, we shouldn’t make the CD-DRM deal in the first place.

I’ve looked here at the specific case of DRM for CDs, but I think the same argument holds for other types of DRM as well. Leaving aside the mythical side-effect-free DRM systems and perfectly just legal regimes that some DRM advocates dream about, and looking instead at DRM systems and legal rules that could actually exist and how they would work in practice – as I am sure Randy and other principled DRM advocates would want us to do – the available DRM deals look lousy. Certainly they look worse than the original copyright deal.

Now I’m not arguing here that the current copyright deal is perfect or even close to perfect. The copyright deal is under stress and we need to keep thinking about how we might improve it or how we might renegotiate it to work better in the digital world. I’m not certain what the best deal would look like, but I’m pretty sure that it won’t try to lock in any kind of DRM.

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