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Prepare a memo for DesignMax staff using the subject title ‘Digital Rights Management (DRM)at DesignMax', that outlines the advantages and disadvantages of a DRM system for DesignMax based on the interview with the ‘Charlie Chan’ company.


From an interview with Charlie Chan


Just a little bit of DRM...

Charlie Chan is a musician and composer who has been innovative in her use of technology both in producing her works and in selling CDs of her music from her website. She makes use of the APRA While she does not make use of a commercial DRM system, she has her own rights management system and keeps hard copy files and records of her agreements and contracts.

She makes use of the APRA collecting society for advice about copyright issues and contracts and to ascertain rights in externally produced materials.


Charlie assesses that her business is 40 per cent creating music, 30 per cent producing it, 20 per cent selling it and 10 per cent managing the content and the rights. Some of the time involved in managing rights is taken up with chasing payment for use of her work and in identifying rights of other artists for work that she wants to use in her own work. Charlie notes that being part of a bigger DRM system would assist in this task. She uses a lawyer to draw up contracts with other creators or performers whose work she uses. On occasion, she needs to be able to work with other creators without any formal agreement. If such creative exercises are productive and new works are created, agreements with other artists are developed, signed and recorded, after the work is finished.


As a creator, producer and trader, Charlie considers herself well informed about copyright issues. If she is wearing her producer's hat and makes use of externally produced materials, she does so on the basis of an assignment of the rights in the work and with moral rights and performer consents. This means there are no copyright problems with downstream uses or sales. The disadvantages are that negotiating the contractual assignment with agents or other creators can be time-consuming and messy, and insisting on written consents for acts that may infringe moral rights isn't always easy to negotiate with a fellow creator.


Charlie does not use copyright protection mechanisms on her website because she encourages people to access her work and listen to it. She is convinced that people who listen are encouraged to buy and knows that much of her paid work as a composer, performer and musical director comes from people who have heard her unprotected work. She agrees that it is possible that some of her materials are copied but does not consider it a major issue at this stage. Charlie also agrees it would be good to know the level of unlawful copying.


If it was not too expensive and it managed the copyright and payment aspects of her work, but allowed her to retain the personal relationship with buyers, users and fans, Charlie would consider investing in a commercial DRM system. She can see value in using a system to enable her to release copyright material with a limited period of usage - but currently considers this too hard to do as an individual creator. Although much of her income derives from sales of CDs over her website, she has not added an e-commerce or payment facility on the website, but would consider doing so if it was easy, inexpensive and allowed her to still keep contact with customers. Having composed and managed the musical score for several films and documentaries, Charlie would consider using a DRM system that recorded and managed the rights and rights-holder information on future big projects.


In the short term, Charlie would be interested in a system that managed the legal issues and left her free to create. It would be just a little bit of DRM and would need to include:

·                    a template/spreadsheet for recording rights information

·                    a checklist for managing rights for large projects

·                    a system for organising information and records for tax purposes and automatic debiting and crediting of GST as part of the transaction

·                    a payment mechanism that could receive payment for a track sold from her site as an MP3 and then deliver the relevant amounts to APRA, AMCOS and any artists involved

·                    an 'Aussie' version of Paypal ( so that local customers don't complain about having to send money off-shore and then back into her local account. 'It's unpatriotic!'