Ray Gifford was impressed by a talk given by Chicago Prof. Randy Picker at a recent Silicon Flatirons program on The Digital Broadband Migration. His major point:

Meaningful DRM may need to be identity-based, meaning that we can glean the identity of the content purchaser from the content itself. . . . We may [also] need to give content purchasers reasons to be reluctant to deal with professional decryptors. Put differently, we may need to add mistrust to DRM schemes.

Here is Prof. Picker's discussion of his ideas. One of them -- Hostages:

Watermarks are a form of identity-based DRM. The embedded watermark would allow a content owner to scan p2p networks in search of available content. Having found the content and the associated identity, the content owner would be able to respond to the illegal distribution.

But respond how and won’t the anti-DRM software just strip the watermark anyhow? This is where mistrust comes in. In embedding identity into content, we may also need to embed access to something valuable, a hostage or mini-bond as it were. Consider a couple of versions of this. If access to content brought with it full-access to a customer’s account, customers would be quite careful about sharing access to the content. As I noted in a prior post on Amazon’s announced Amazon Upgrade, this appears to the path that Amazon is taking. Alternatively, we could imagine that the identity information embedded in the content gave someone with access to the content the ability to spend a say $50 account balance at the site in question.

The point of this is to raise the cost of sharing content and to drive an incentives wedge between the content purchaser and the professional decryptor. If the content purchaser can’t be sure that the decryptor will act as an honest agent in stripping the DRM scheme—if the purchaser instead fears that the decryptor will harvest the account information—the content purchaser may back away from sharing.