Digital Rights Management (DRM) is the name given to technologies
that prevent someone from using a copyrighted digital work beyond
the uses the copyright holder intends for it. Content companies
believe such technology is necessary because they fear that once an
unprotected copy of a digital work becomes available, it will be
distributed over the Internet, and as a result, will lose its value.

One common approach to copy protection is encryption — the use
of a mathematical/computational process to scramble information so
that only those who have the right key or keys can obtain access to
it. This, for example, is how your DVD movies work — their
content is scrambled so that only DVD players that have the right
keys can decrypt the content so that you can watch the DVD movie.
Similarly, if you receive cable or satellite television, your TV
service provider normally scrambles content in ways that prevent
most unauthorized people (that is, nonsubscribers) from getting
access to it.

The basic approach for encryption is to encrypt the digital content
so that only a player with both the decryption device or software
and the proper key can play the content. The content owner can
broadcast the content to everyone but unless the recipient has valid
decryption keys he cannot play the content. Scrambling is a similar
copy-protection approach, but without a user-applied key; instead,
the key that includes the unscrambling algorithm resides in the
player device (which may be hardware, or software, or both).

The second approach to copy protection is something we can call
“marking;” it depends on adding a mark in some way to
the digital content. The mark may be used to indicate that the
content is copyrighted, and in some cases it also carries
instructions about what uses of the content are authorized. For
example, in theory a mark may label some content as “do not
copy” and another mark may label some other content as
“copy once but don’t re-copy.”

There are three general forms a mark may take in the digital world.
First, it may take the form of a simple label that is sent along
with the content. Second, it may be a “watermark”
— an arrangement of digital bits hidden in the background of
the digital content. Or, third, it may be a
“fingerprint” — a unique identifier that is
derived from the characteristics of the content itself.

Marking is typically used for one of three reasons. First, it is
used when an encryption-based method, for whatever reason, is not
viable. For example, if the Federal Communications Commission
requires that broadcast television signals not be encrypted —
that they be broadcast “in the clear” — any DRM
for broadcast television signals must be based on marking. Second,
marking is used in systems that attempt to detect copying after the
fact rather than preventing it — such use is among the
so-called “forensic” uses of marking. Putting a mark on
a piece of digital music, for example, allows one to create a search
engine that can find a marked clip on the Internet, which the
searcher might then assume is an unauthorized clip (on the theory
that authorized marked clips aren’t available at all via the
Internet). The third major use of marking is as a response to the
so-called “analog
hole.” The term “analog
hole” refers to the ability of a would-be infringer to
capture content as it is being played (or just before it is played).
An example of this would be playing of a DVD and capturing the
DVD’s content by using a camera with a microphone, or by
replacing an output device such as a television set with a recording
device, or by connecting to the digital player through analog
connectors.

A third method is called “selective incompatibility. In this
case, the manufacturer of a CD, for example, will add deliberate
“errors” into encoding of music content on CDs, with the
result that the CDs will be readable by some CD players (typically
consumer-electronics single-purpose devices) and not by others
(typically computer CD drives).

For a more full discussion of DRM, download the pdf “What Every Citizen Should Know
about DRM, a.k.a. ‘Digital Rights
Management’,” by Mike Godwin, Public Knowledge Legal
Director.