Because of the success of Apple's iTunes music store, companies are now focusing on the next great frontier in the world of digital media, which is the market for legal movie downloads. But companies entering that space are faced with a dilemma: In order to gain access to the most marketable content, they need to implement services that large movie owners will find acceptable. That typically means imposing severe restrictions on what consumers can do with the content after they download movies. The need to impose restrictions, however, conflicts directly with another critical requirement, which is to create something that paying consumers will want to use. Most of the time, the developers of movie download services have opted to create implementations that satisfy movie owners. Unfortunately, these implementations are best described as consumer-hostile. Not surprisingly, consumers have been slow to start using these restrictive movie download services, meaning movie owners get little return.

The ability to distribute large volumes of digital content on the Internet has created unprecedented opportunities for new offerings that can better enable consumers to enjoy movie downloads in more convenient ways. But at the same time, the Internet has also created opportunities for people to illegally distribute large quantities of content, preventing the rightful owners of that content from being compensated. The effort to prevent unauthorized use of content has led to the creation of download services that attempt to control what consumers can do with their purchases. Thus was born the concept of digital rights management (DRM), a technology that is intended to force consumers to only use purchased content in ways approved by the copyright owner.

In order to be at all effective, a DRM system must maintain control of content at all times. Consequently, consumers that download movies from legitimate sites are frequently not allowed to then burn those movies to recordable DVDs that will play on standard DVD players. Most DRM-based systems do not allow burning since recordable DVDs cannot currently be both encrypted and also playable in standard DVD players. Some companies have attempted to add copy protection to recordable DVDs. But all of these efforts only provide a temporary illusion of copy protection. That is because in order to be at all useful to the consumer, the recordable disc must be readable by a DVD player. Since most DVD players are not designed to work with DRM, any effort to make a recordable DVD not copyable is limited to inserting “errors” into the DVD structure or on the physical disc that will confuse a disc ripping program, but not a DVD player. Protection schemes that have attempted this approach are typically broken within hours.

Consumers are painfully aware of the use restrictions imposed by DRM; however, very few people are aware of the long-term implications. Most of the well-known services that allow consumers to download movies utilize Microsoft's DRM. It is not surprising, therefore, that these services invariably only support computers running Microsoft Windows. And while a few sites allow consumers to copy downloads to a limited number of Windows computers, some do not even allow that. What could you do then with all of your purchased content that is locked up in Windows DRM if you want to switch to a Mac or Linux? The dirty little secret not advertised by DRM-based movie download services is that your likely reward for buying DRM-encrypted movies is that someday you will either have to throw away all of the content you paid for along with an old PC, or you will have the privilege of needing to buy the same content all over again.

Faced with the prospect of losing content that you paid good money for, you may decide to try a hack in order to get your movies out of the DRM system that restricts them. Since just about every DRM technology is broken at one time or another, there is a good chance that you will find a utility that can circumvent the DRM system. What many people don't know is that in the United States, circumventing copy protection is illegal. That is due to the anti-circumvention clause in of the Digital Millennium Copyright Act (DMCA) of 1998. The DMCA makes breaking copy protection illegal, even for personal use. So, if you pay your hard-earned cash to download movies legally and then try to copy those movies from your old Windows PC to your new Mac, you may well have to commit a crime in order to do it.

The video industry has undergone two important transformations in the last few decades: the introduction of VHS and the transition to DVD. Both times, those who fought change profited least, and those who found new ways to deliver value to paying customers profited the most. The business models left standing after the Internet transition will surely be the services that find a way to make things better for paying customers. Consumers should try the new legal movie download services that are springing up nearly every day. People should know, however, that not all Web sites allowing consumers to download movies legally were designed with consumers' best interests at heart. So, before you take out your credit card to pay for a movie download, you should beware of the restrictions that the service provider may be trying to impose on you.