As most people who are savvy internet users know, DRM is a system that punishes legal users and provides sport for pirates. To my knowledge there is no software that has not been pirated and plenty of users that I know of that have turned to pirated software because they would rather have a full product with no hassle.

One success story in the piracy market has been Valve Software. Their source code for Half-Life 2 was stolen and in response Valve delayed the game, and created Steam. Steam has become the most easy to use form of DRM. Most users don't consider it DRM. Steam allows users to join a robust community and buy games off the internet.

I personally think more people would be using legal copies of software if it came in the form of a Steam-like client. This only pertains to gaming of course.

The bottom line though is that many of the techniques used by companies to protect their content often have a detrimental effect on users who buy them legitimately (as in the Sony rootkit). The solution for that music, again, seems to be services like iTunes.
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Consumers who illegally break copyright laws should be prosecuted, period, but by adding DRM to their products, companies are punishing all users, of which only a small percentage are actual criminals. It be like buying a corvette that the manufacturer has altered so that it cannot go over 25 mph because they are afraid that someone will drive 50mph in a 25 zone. Go after the pirates and leave the rest of us alone!
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I understand the idea of DRM, to protect a work from piracy and thereby retain its economic value to the company/publisher/artist. In that regard I do not think there is anything inappropriate or malicious about artists and creators of content seeking to protect their livelihoods.

DRM does not work this way in practice however, and its implementation to date has probably forever doomed it in the hearts and minds of consumers. DRM is really nothing more than proactive copyright enforcement. While some people, myself included, feel there are issues with intellectual property law in the United States and elsewhere, the underlying notion that an inventor or artist should have the right to profit from their work, and the means to defend that profit, is a legitimate case in my view.

DRM falls apart because of the pricing structure of content, and the inefficiency of the content distribution channels (meaning the production houses and companies). Let me suggest an alternate theory of DRM, a passive, "tracking" version. You pay $0.60 for a song* and download it once. For every copy you make of that song you pay an additional nickel, because it has internally embedded DRM (we assume some technical miracle to make that happen) which tracks copies made of your instance of the song. You can listen to it on your PC for free. But it will cost you $0.05 more to burn it onto a CD for yourself, or a friend, of $0.50 cents more for 10 friends. If you have 5 MP3 devices that you absolutely have to synchronize for some reason, you should simply count on every song costing an addition $0.25 cents. This is because it is a reasonable assumption that you cannot listen to all five devices at once (but also fair to assume you might be giving them to friends, you cannot automatically determine the nature of a copy very well).

Of course, if you upload your file to a file-sharing service, you might be charged tens or hundreds or thousands of dollars. That would significantly deter piracy, without specifically making it harder to play the file anywhere on any device (I am thinking of some take-off on audio-watermarking, I do not pretend to have the audio engineering or programming knowledge to carry that off myself).

The problem, as I see it, with something being absolutely DRM free is not the large scale piracy by any individual organization, but the loss of word-of-mouth advertising, which has always been the main way any product is advertised and succeeds or fails. If one person buys an MP3, five of their friends hear it and say "hey, I should get a copy of that," do we assume the content purchaser will take the high road always and say "well then by all means go to the artists website and buy it." Or do we make the human assumption that he or she will say "oh, glad you like it, here's a copy." It's not any more unusual than sharing popcorn at a movie theater. Much as the theater might like to sell you each an extra large tub, they learned long ago that people will buy one and share it. But that's a loss of five possible sales, without any hope of recouping them. In my passive model, at least there'd be a nickel recouped, and for no additional cost in advertising or distribution on the part of the content provider.

That supplies some minor consistent revenue, which is fair to the creators of content, while still making distribution and playback simple. I do not support DRM in its current form by any means, but I think that the elimination of protections for artists is perilous as well. Please understand the above thoughts are based on the ideal that artists are distributing more or less directly to consumers, I am not seeking to defend the systems or structures put in place by the various agencies and organizations that neither creatively produce or seek to advocate for the consumer.

* Footnote: That is not an arbitrary figure, a 2 hour movie viewed for $7 is approximately 17 cents per minute. 3.5 minutes per song gives you a similar value. I am not saying music and movies are the same cost to produce, I am suggesting the consumer values minutes of entertainment in approximately the same way, and if they prefer one type or another, they will simply seek that out.
Source(s):
Personal familiarity with the issue for use in classes I teach, a general attention to the technology and details involved.

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DRM is fine as long as its not overused. The problem is, I can't think of anything protected by DRM where the DRM is not overused. iTunes DRM would be fine, but it unfairly limits you to the iPod/iPhone. DRM for music/videos is fine, but only if you are given the option to redownload your music by entering your account information, like the way the iTunes music store works, and only if it will play on any device, not just some overpriced piece of s--t. I'm talking to you, Apple. As for DRM on software/games, it too is fine but you should be given an unlimited number of reinstalls. As for iTunes going completely DRM free, it is going to take awhile.
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How I see it is...
-DRM was invented to stop pirates from sharing songs and software on the Internet.
-Every time a new DRM scheme comes out, pirates just circumvent it anyway.
-The people who pirate the stuff are completely unaffected, while the people who buy the stuff and want to use it are left scratching their heads and kicking their computers.
-Fail.
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In general, I am strongly against DRM as, but it has some very good uses, too.

First, what I don't like:

If you buy something, it should be yours to do with as you please, and you shouldn't have to jump through ridiculous hoops to get where you want to be (like burning CDs with iTunes music). You should be able to back up your DVD, or compress it on to your laptop so you can watch it on an airplane without bringing a library of discs along.

If something is yours, some of the DRM schemes have been very restrictive considering this. If they are going to pin you with usage requirements, they'd better offer some sort of value added service to go with it! Only allowing one re-download for a song? Ridiculous. If it has DRM, you should be able to log in on your account anywhere, and play the song or use the software wherever you are.

DRM, however, does have its uses!

First, music subscriptions - these are a fantastic idea. Pay $10-15/month, and listen to as much music as you want as long as you're paying. So, for the cost of purchasing 1-2 albums per month, you can listen to tens and hundreds of new albums per month if you have the time. If we say that the unlimited subscription service is the cost of 2 albums, look at where you are in 5 years (60 months):

Cost: 120 albums ($1200)
Music available to buyer: 120 albums
Music available to subscriber: millions of albums

If you listen to the same music over and over again, you might want to buy it outright, but if you like to try a new stuff, subscriptions are a very good value. Emusic fits in between, which gives you a lot more music for a far lower cost than buying normally, but you need to fill up your quota every month. For $25/month, you can get as much as 10 or so albums worth of music. And it has no DRM. This is the best of both worlds, but not without downsides. I can't re-download everything, nor can I be at a friend's house with no mp3 player at hand, and say "Hey, check this obscure song out that isn't on youtube somewhere".

Let's look at software, now. Specifically games. Console download games use DRM so you can't just copy the files around, but it is handled in a relatively seamless manner. You can even log in on someone else's Xbox and play your own live games... but this functionality is awkward at best.

Steam, however, presents a perfect DRM solution for games. You have an account, and pay for the games. In the US, the prices range from being slightly cheaper or similar to good retail prices, to some amazing deals from time to time (Just over christmas, they had a deal where a large chunk of the store was 50% off - I bought something like 20 games for $100, including quality titles like Civilization 4, Rome: Total War, Left 4 Dead - it wasn't a pile of junk games - this weekend's deal is the all of X-com UFO defense games for $5 - there are 5, and a few of them are older, but one can not deny it is a good deal).

Now, I can log in to any computer with Steam using my account, and I can install, and re-download these games as many times as I want. While 8GB for Bioshock (It was $5 over christmas) might not be realistic, there are a lot of games that are of sizes that can be downloaded pretty quickly. I have used this on more than a few occasions and really like the ability to do this.

Lastly, the price needs to be right. If I am paying for DRM protected content, it had better be priced significantly better than the non DRM'd competition if it offers no or few advantages. Not worse. Why should I pay more for use of a more restricted product? I won't. I won't buy it, and I won't support companies that do this. Would I pay 10 cents for "download once" DRM'd music files that I can play on my three computers, my mp3 players, and nothing extra? Yeah. I might buy a few. But $1? For a song? Forget it. Not when 25-30 cents per non DRM song is the going rate.

DRM done poorly is a horror of horrors. But when used in a non intrusive manner in order to provide the best, most comprehensive service and availability of the DRM laden product, it can be used in a positive manner.

Digital distribution is the future, for better or worse. If it is going to be the future, it is going to be about making anything you own seamlessly available to you where ever you go. It won't be about draconian schemes. It will be about making the things you own to you available to you wherever you might be. People will be a lot less against DRM if they can buy a movie and watch it on any device they own, at any time, AND at a reasonable price. And, yes, this means that something like a movie should be able to be re-downloaded in any appropriate format to watch on any device as many times as you please, forever. Bandwidth will of course be important, but, 20 years from now, I can't see us buying software and media on stupid optical discs at all.
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