Bitmunk: An End to Digital Rights Management?

Bitmunk personal edition.

It was 1997 and in the midst of the dot com boom when Shawn Fanning's revolutionary program "Napster" took the world by storm. Though unremarkable from a technological standpoint, Napster revolutionized – some might say destroyed – overnight the very foundations of the entrenched American music industry, upending a decades old revenue model and sending a multi-billion dollar industry into chaos.

In the aftermath of the dot com bust, the recording industry and its now iconic trade group, the RIAA, spent millions of dollars and thousands of man hours seeking to preserve the physical media based revenue model that a Northeastern University student had so handily defeated. Lawsuits were filed, injunctions were ordered, legislation passed and an entire branch of software development was born: DRM – digital rights management.

Digital Rights Management, in conjunction with the Digital Millennium Copyright Act, creates an oligopolistic market in music, concentrating market dominance and power in the hands of a small number of very large recording studios. While Napster made possible the distribution of a huge volume of illegally acquired music, it also provided equally powerful distribution channels for small and independent groups and artists. The RIAA's reliance on DRM technologies necessitates an exclusive rather than inclusive marketplace – like iTunes – effectively protecting intellectual property, but also protecting an elitist marketplace from aspiring artists.

But there is another way.

Enter Bitmunk, the world's first completely legal, copyright conscious, peer-to-peer network. Flagship product of Digital Bazaar, a small company in South Western Virginia, Bitmunk rejects traditional DRM, which relies upon access restrictions to authorize content, and instead depends on a proprietary watermarking technology.

The system is elegant in its simplicity. Bitmunk capitalizes upon the scalability of peer to peer networking, allowing each purchaser to function as a quasi-independent retailer to other customers. This model allows Digital Bazaar to compensate not only artists for their music but Bitmunk users for their contributions of hosting and bandwidth to the network as well.

This vast distribution system is only the beginning. "We plan on providing many more tools to help people integrate our sales software into their blogs, RSS news feeds, podcasts, video blogs and personal websites," says Manu Sporny, CEO of Digital Bazaar. "Our software ensures that advertising is not the only source of revenue available to bloggers, entertainment portals and news services - we are providing a sales vehicle that anybody can integrate into their website."

It's a model that has met with success in the past. Youtube, the now famous internet video distributor and recent Google acquisition, found popularity in large part through the ability of users to integrate the service with blogs and other social and communication services.

With a version 2.0 release under its belt and more than a half million files in the catalog, things look good for Digital Bazaar; but it is not all roses and champagne from here on out. Bitmunk 2.0 and the promised future features could put Digital Bazaar on a direct collision course with the corporate Goliaths of the recording and movie industries. While it would be easy to depict Bitmunk as David, that's not what Sporny and his team want.

Notes Sporny: "I want to make it clear that we are absolutely not fighting the RIAA. We are attempting to work with them so that they can navigate this problem - there is a way for everybody to get what they want. We believe that we have built that system, we just need to talk with a couple of key people to explain why our system is better than the current set of approaches to the problem."

The key, says Sporny, is market choice. "Artists will eventually have the choice on Bitmunk to wrap their content in DRM. Just like customers will have the choice not to buy anything wrapped in DRM." This choice, and the free market it creates, is possible because Bitmunk's watermark ties each file distributed on the network to the user that purchased it.

Bitmunk's watermarking technology makes customers accountable for what happens to their files and thus the restrictive side of DRM is something Digital Bazaar thinks the music industry could do without. Even so, the company acknowledges that the technology has a foothold and is unlikely to vanish anytime soon. Sporny says that the Bitmunk technology can accommodate (but does not recommend) DRM protected files, providing perhaps a bridge for artists and labels still concerned about the inherently non-invasive nature of Bitmunk's watermark.

Presently playing host to nearly 40,000 independent artists, the Bitmunk network is still expanding fast. Sporny expects "a 1.3 [Terabyte] shipment of albums from some of our digital content suppliers," in December with continued growth throughout 2007. He notes that the company plans "to start approaching the mid-level record labels starting at the early part of next year - people like Neko Case, Sarah McLachlan, Avril Lavigne, Barenaked Ladies, Sum 41, and Dido."

Price-wise, Bitmunk is competitive with other services. Unlike iTunes, Bitmunk tracks and albums vary over a range of prices. Sporny notes that most songs are "around 84 cents per track [and] albums hover around $7.90 to $8.00" but that pricing is up to the artist. That means that tracks can be had for as little as 15 cents in some cases.

What happens next with Bitmunk may very well have a profound impact the future of digital media sales. In a standards war with iTunes, Bitmunk's open and unrestrictive watermarking technology is the clear favorite based on features alone; but Apple's massive market penetration and brand recognition represent a daunting hurdle for the fledgling challenger. Despite the advantage, it's not a war that Sporny wants.

"Nobody wins if we start a format war with our competitors… On Bitmunk, artists have the choice of wrapping their music in DRM - and customers have the choice of buying something wrapped in DRM or buying something else that is not locked down. Digital Bazaar should not be the ones making that decision, it is not our prerogative nor should it ever be. Bitmunk operates as a free market - we let the artists, distributors and customers decide what works for them."

Interested users can download Bitmunk Personal Edition 2.0 at http://www.bitmunk.com/download/.

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