Business of Streaming and Digital Media

This section on technical background concerns content security. Unlike other mediums, digital audio and video content enables near-perfect duplication at a low cost. Therefore, copies of media are virtually the same as the original. Also, the original does not degrade over time or from the duplication process, so a single original can be the source for as many copies as a user wishes to make. This is why the profit margins of Microsoft and other software companies are 25 75 percent.
This is also why owners of digital content are paranoid about theft: If the copy is as good as the original, why should someone purchase the original? Below are four strategies currently employed to secure content.
Encryption scrambles the piece of content itself, so that it cannot be viewed without the decryption key. Encryption is separate from encoding: It puts the file in a virtual safe, while encoding formats the file for a particular media platform. Many DRM solutions use asynchronous systems, i.e., the key is not tied to the safe but kept somewhere else on the Internet. The user requests and receives the file but needs to perform a separate transaction in order to secure the appropriate decryption key. The danger with this type of delivery is that smart thieves crack open the safe and start spreading the file in an unencrypted format. Anarchist hackers fighting for free information...