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Disney Loves DRM

BOULDER, Colo. — Even though a huge amount of daily Internet traffic is bits of evidence showing people trying to avoid it, Digital Rights Management (DRM) technology is the juice behind Disney’s breakout online moves, a company exec said here Sunday.

thumb_preston_padden.jpgPreston Padden, executive vice president for government relations at the Mouse House, told attendees at the Silicon Flatirons telecom conference here that Disney’s recent successes in online offerings have happened largely because of DRM. While acknowledging that no DRM was ever likely to dry up BitTorrent sharing of content, Padden said that DRM does make it possible for Disney to offer more flexible distribution of content, from hard-copy DVDs to online rentals to download-to-own options. And the more ways Disney can offer content, he said, the more chances it has to compete against the pirated flows.

“There’s actually far more use permitted because of DRM,” said Padden, who like most at Disney is somewhat of a recent convert to any digital reproduction of the company’s prized creations. In fact, another speaker Sunday, a government regulator, recalled a time about 10 years ago when Padden angrily pounded his fist on a desk, claiming that Disney would never put its content in a digital format.

Now, of course, Disney is looking to offer at least some of its content to just about any online experiment, even to small players like MovieLink or CinemaNow, “no matter how much viability they may or may not have,” Padden said. The Disney decision to move aggressively online, which Padden said was made by CEO Robert Iger about 18 months ago, has paid off already, with 20 million Disney shows downloaded off iTunes over the past year, and 1.3 million movies downloaded so far since September, Padden said.

And it’s DRM, he said, that helps make Disney comfortable putting its creations into consumable bits.

“Without DRM, we would not be able to differentiate between a sale and a rental,” Padden said. “It allows us to differentiate the consumer experience, and price each one differently. And we have to be able to protect our investment and be able to monetize it.”

When a questioner from the audience asked why Disney bothered with DRM since just about every DRM scheme so far has proven crackable, Padden noted that “every stop sign that’s been put up has been run [through] — that doesn’t mean you take them down.” Padden did say that Disney had originally been waiting for a “more secure environment” to emerge, but eventually Iger and Co. decided that “the best antidote to piracy is to get out there ourselves.”

4 Responses to “Disney Loves DRM”

  1. Well Jobs’ letter was carefully crafted to only refer to digital music and not digital video. He is unable to make the same definitive statements of the availability of DRM-free video that has not been obtained by cracking DCSS on DVDs, downloaded from P2P and FLV based sites…for now. And there is no widespread discontent among among ordinary (as opposed to bleeding edge) users – yet.

    I find it very interesting the way people are interpreting what Jobs did NOT say.

  2. Paul Kapustka

    Forgot to add this — I did ask Padden about Steve Jobs and DRM. His tongue-in-cheek reply: “Steve Jobs is a member of our board of directors, which sets my compensation. That’s all I have to say.”