A big part of how today’s digital content economy functions is through digital rights management, where content owners use digital asset management systems and other DRM tools to require payment for access to their material.

While DRM tools are great for locking down content, they also deliver additional benefits to organizations that use them.

This article explores the benefits of implementing digital rights management software, and how DRM tools can help organizations across a wide spectrum of industries stay compliant with licensing agreements, protect profits, and keep sensitive information out of the hands of unauthorized users.

What is digital rights management?

Digital rights management (DRM) is technology created to prevent illegal use, theft, and distribution of digital content. DRM protects digital content by employing multiple strategies to eliminate methods for creating duplicates of protected files or sending those files to others.

DRM solutions are multifaceted and IP holders can configure them to meet a variety of use cases. Limitations that organizations can implement via DRM include limits on sharing, printing, forwarding, downloading, saving copies, editing, or maintaining access to content outside a defined (subscription or rental) window.

Why is it important to protect digital content?

Because of the open architecture of the internet, most files by default can be downloaded and shared freely. But marketable digital assets — those designed to be sold or licensed to businesses and consumers — cannot remain marketable under these conditions. And businesses creating these assets can’t remain solvent without a way to limit transmission by requiring purchase or subscription for access to this content.

The benefits of digital rights management

For rights holders and others on the income-earning side of digital content, digital rights management delivers numerous benefits. In some cases, it singlehandedly enables profitability and allows for the continued viability of digital business models.

1. Protection of intellectual property

First, digital rights management protects intellectual property.In an online-first (or even online-only) world, many businesses profit solely or primarily from digital goods. The most obvious example is TV and film content.

While you can still buy movies on disc, the numbers show that most people don’t anymore. From 2011 to 2021, the total number of annual physical video transactions dropped nearly 5 billion, from 6.1 to 1.2 billion.

Consumers now pay for a digital copy of that video content, or they use streaming services they’re already paying for.

Without digital rights management, those downloaded files could be transferred, stored, given away, resold— anything you can do with pictures and video, you could do with the latest movie or Netflix series.

For businesses that rely on sales of or subscriptions to their digital content, DRM is often a necessary component of protecting that intellectual property and the profits the IP generates.

2. Prevents unauthorized use of content

Even in today’s market where businesses have access to DRM systems, an estimated 20% of potential revenue on video content is still lost to piracy.

DRM in most cases prevents users from getting their hands on a usable, transferable high-fidelity copy of whatever file or digital asset is being protected. And by preventing users from stealing this content, DRM reduces the possibility of unauthorized uses of that content.

3. Safeguards income streams

How Digital Rights Management Solution Benefits A Business
How Digital Rights Management Solution Benefits A Business

Additionally, digital rights management helps to safeguard income streams. When users cannot gain free, illegal access, they are left with a choice, to either gain legal access (which typically involves payment) or to go without.

Preventing piracy through DRM ensures more people will pay for a digital asset when they have no other easy option to access it.

4. Educates users about copyright and intellectual property

Part of the problem with online piracy is that users don’t always understand how copyright and intellectual property laws work.

Many who pirate content have a cursory understanding that what they’re doing is vaguely unethical and maybe illegal. When users run into DRM limitations, those guardrails can help to further understand what’s okay and what’s not.

5. Ensures regulatory compliance

Digital rights management is a valuable tool in ensuring regulatory compliance. This is a part of why users in the U.K. and the U.S. have different experiences of Netflix (and virtually every other streaming service with a multinational presence).

Copyright law and content licensing are not universal. Different countries and regions have different regulations and laws, which content distributors must follow if they are to operate in a given country. Additionally, a copyright holder could license content to one group in North America but another in the EU.

Let’s imagine a TV show produced in Australia. Let’s say a local distributor has rights to an Aussie-produced show, but Netflix purchases the rights to distribute in the U.S. Netflix operates in Australia — but it cannot show this TV show there. DRM (specifically, geolocation) is one tool Netflix uses to limit content and ensure compliance.

But DRM isn’t limited to entertainment.

Healthcare records are protected, surrounded by a litany of local, national, and global regulations. DRM can be used to lock down electronic health records and ensure compliance with the relevant regulations.

6. Enables content localization and enhanced analytics

The other less visible side of geolocation within DRM is how it benefits both customers and content providers. By recognizing where a user is, global distributors can localize content to that user. In some cases this looks like a different default language, but it could cover numerous other elements, like branding, required display information (such as content ratings), and default currency.

7. Improved data security

Traditional data security is entirely credentials based. If a user can establish their credentials (via one or more factors of authentication), they can access the data. If a user cannot establish credentials, they cannot gain access.

This system works better when organizations use two-factor authentication (2FA) or multifactor authentication (MFA), but it focuses on only one part of the problem with data security, access.

Data security has at least two facets, though: access and control. Credentials grant access, but what if you want finer control on what users do with that access?

Digital rights management has a role to play here. Instead of leaving files wide open for anyone with credential access to use as they please, DRM protection could limit what those with access can do with the materials they can access.

For example, imagine a sensitive company document or one with confidential information. You may need to control access, allowing various users to have differing kinds of access, with some in each of these categories:

  • Full access (can download the file)
  • Edit access (can make changes to the file but cannot download)
  • View access (can see and use the file but cannot download or make changes)

This is one relatively simple example, and DRM technologies can go even deeper and more granular as needed.

Who benefits from digital rights management?

Digital rights management can be used in numerous contexts and for many purposes, so the list of groups and industries that can benefit from DRM is long and diverse.

  • Authors, composers, content creators: Anyone creating original works of intellectual property can benefit from DRM as they seek to monetize their creative works. (Implementing DRM software on the solo or solopreneur level can be logistically burdensome, though some DRM protections may be available through popular distribution networks.)
  • OTT and VOD digital media providers (streaming services): Preventing downloads and ensuring the right people access the right content is core to the business model.
  • Video games, mobile apps, and software applications: Limiting use to paying customers is vital to commercial viability in some software and video gaming contexts.
  • Businesses dealing with confidential documents, trade secrets, and otherwise proprietary or sensitive data
  • Digital music distributors and streaming services: Artists and copyright holders require payment for sales, downloads, and streams; DRM systems help contain music so that more of these streams are counted.

Of course, this is just a sample list; the real-world use cases are more numerous and more varied than those listed here.

Best practices for effective digital rights management

Implementing DRM effectively is not always simple. You need to do it in a way that meets your company’s needs and obligations without alienating customers through poor user experience or pushing end-users to alternate (including illegal) methods.

As you build a digital rights management strategy for your business, consider these best practices:

  1. Understand your customers, both internal and external: If DRM creates an obnoxious user experience, you’ll create an incentive to bypass it.
  2. Take a nuanced approach: Not every piece of content needs to be protected, and some pieces (free lead generators and advertising-oriented content) should never be.
  3. Realize the downsides: Especially on the consumer level, DRM on fully purchased content (rather than rented or subscription-based) can create a negative experience for users and could leave them without long-term access to something they believe they own.
  4. Prioritize scalability: Put yourself in a position where your company — and its DRM solutions — can grow.

Protect your intellectual property with Digital Element

Digital rights management is a powerful way to protect assets, reclaim lost sales, demonstrate compliance, and keep sensitive documents secure. Core to many DRM applications is a clear understanding of where users reside geographically.

Sigma DRM provides superior geolocation data and global IP solutions that power digital rights management on a global scale.

Ready to explore Sigma solutions for powerful digital rights management? Get started today with a pricing request.