DRM is so bad it isn't even wrong
This started off as a collection of links to go into a comment on 
naraht's journal, but it got a bit out of hand, and took rather longer than I intended, and....
Behind the cut, you'll find a very slightly ranty description of some of the evidence that using DRM not only increases costs, but actually cuts sales too. That is, if you have two identical (electronic) products for sale at the same price, one with DRM and one without, not only is the margin (and thus profit-per-sale) on the DRM-free version better, it will sell more copies as well. Big media companies tend to insist that everything needs to have DRM because all their customers (you and me, in other words) are thieves by nature: the evidence is that not only is that attitude highly offensive, it's directly costing them money as well. Where does the evidence come from? Well, mostly from sales figures provided by big (and some smaller) media companies, actually.
Baen's "Webscription" ebook system, which is DRM free, achieves a higher rate of ebook sales (as a proportion of physical book sales) than their DRM-using competitors. Anywhere from five to a hundred times higher, with no noticeable impact on physical sales. (That article by Eric Flint contains lots of information, along with an exposition of the late Jim Baen's opposition to publishers "soiling themselves" with DRM.)
But that was back in 2006; what about now? Well, technical publisher O'Reilly decided to change their DRM policy a couple of years ago. In January last year, they did an 18-month review of the effects: sales of ebooks more than doubled when they went DRM-free, (massively bucking the market) while their print book sales declined slightly, in line with their competitors in the marketplace.
Then, of course, there's the experience of graphic-novel artist Steve Lieber, who found that when his work was reviewed positively on BoingBoing, he got a sales spike. When it was scanned and distributed without authorisation through 4chan, he got a much bigger sales spike.
Still, maybe that's only books. How about music? Well, when EMI decided to switch to DRM-free downloads through Apple's iTunes store, sales of some electronic downloads for albums increased by a factor of four, with no change in the number of physical copies.
The big music publishers spent a lot of time explaining that Radiohead's online "pay what you like" DRM-free release of "In Rainbows" was a terrible disaster, and would lead to bands scavenging in the streets. Radiohead disagree - they made far more money from the online release than their total income from their previous album, and when "In Rainbows" and singles were later released on CD, the physical sales were up, not down. (Everyone cites billboard.com for the latter; I can't get it to work, possibly because of the piles of things I'm blocking.)
Then there's movies, of course. DRM-free movies are hard to come by, because everything gets released on broken-by-design DVDs. Then again, the MPAA warns every year that unauthorised copying is destroying the industry because people won't pay to go and see films; every year it posts record box-office takings. DVD unit sales go up every year too, so unauthorised copying (and transfer between regions) aren't exactly hurting there. Income from sales is increasing rather slower than number of units, probably because DVDs aren't a premium product any more (and because lots of people resent being charged twenty quid for a piece of plastic that cost less than a penny to make).
How about computer games, while we're here? Well, the evidence there is slightly trickier, but overall, it looks as though DRM doesn't make any difference to the ratio of sales to illegal downloads. So why put time and money into it if it only makes life harder for the actual paying customers?
On a related point, it's perhaps worth noting that the big media conglomerates - particularly, but not exclusively, in music and film - spend a lot of time shouting about how much money they lose to unauthorised copying. The problem is that as soon as anyone looks at the numbers they publish with those claims, the whole argument falls apart. Every single time, without exception. Googling will turn up huge numbers of articles examining this, but I'll finish with a few examples from the last decade: 2002, 2003, 2004, 2008, and 2010. [ETA: have one for 2011, as well.]
naraht's journal, but it got a bit out of hand, and took rather longer than I intended, and....
Behind the cut, you'll find a very slightly ranty description of some of the evidence that using DRM not only increases costs, but actually cuts sales too. That is, if you have two identical (electronic) products for sale at the same price, one with DRM and one without, not only is the margin (and thus profit-per-sale) on the DRM-free version better, it will sell more copies as well. Big media companies tend to insist that everything needs to have DRM because all their customers (you and me, in other words) are thieves by nature: the evidence is that not only is that attitude highly offensive, it's directly costing them money as well. Where does the evidence come from? Well, mostly from sales figures provided by big (and some smaller) media companies, actually.
Baen's "Webscription" ebook system, which is DRM free, achieves a higher rate of ebook sales (as a proportion of physical book sales) than their DRM-using competitors. Anywhere from five to a hundred times higher, with no noticeable impact on physical sales. (That article by Eric Flint contains lots of information, along with an exposition of the late Jim Baen's opposition to publishers "soiling themselves" with DRM.)
But that was back in 2006; what about now? Well, technical publisher O'Reilly decided to change their DRM policy a couple of years ago. In January last year, they did an 18-month review of the effects: sales of ebooks more than doubled when they went DRM-free, (massively bucking the market) while their print book sales declined slightly, in line with their competitors in the marketplace.
Then, of course, there's the experience of graphic-novel artist Steve Lieber, who found that when his work was reviewed positively on BoingBoing, he got a sales spike. When it was scanned and distributed without authorisation through 4chan, he got a much bigger sales spike.
Still, maybe that's only books. How about music? Well, when EMI decided to switch to DRM-free downloads through Apple's iTunes store, sales of some electronic downloads for albums increased by a factor of four, with no change in the number of physical copies.
The big music publishers spent a lot of time explaining that Radiohead's online "pay what you like" DRM-free release of "In Rainbows" was a terrible disaster, and would lead to bands scavenging in the streets. Radiohead disagree - they made far more money from the online release than their total income from their previous album, and when "In Rainbows" and singles were later released on CD, the physical sales were up, not down. (Everyone cites billboard.com for the latter; I can't get it to work, possibly because of the piles of things I'm blocking.)
Then there's movies, of course. DRM-free movies are hard to come by, because everything gets released on broken-by-design DVDs. Then again, the MPAA warns every year that unauthorised copying is destroying the industry because people won't pay to go and see films; every year it posts record box-office takings. DVD unit sales go up every year too, so unauthorised copying (and transfer between regions) aren't exactly hurting there. Income from sales is increasing rather slower than number of units, probably because DVDs aren't a premium product any more (and because lots of people resent being charged twenty quid for a piece of plastic that cost less than a penny to make).
How about computer games, while we're here? Well, the evidence there is slightly trickier, but overall, it looks as though DRM doesn't make any difference to the ratio of sales to illegal downloads. So why put time and money into it if it only makes life harder for the actual paying customers?
On a related point, it's perhaps worth noting that the big media conglomerates - particularly, but not exclusively, in music and film - spend a lot of time shouting about how much money they lose to unauthorised copying. The problem is that as soon as anyone looks at the numbers they publish with those claims, the whole argument falls apart. Every single time, without exception. Googling will turn up huge numbers of articles examining this, but I'll finish with a few examples from the last decade: 2002, 2003, 2004, 2008, and 2010. [ETA: have one for 2011, as well.]