Info & Answers
What Happens to Your Digital Content if the Provider Goes out of Business?
HDGiants' bankruptcy raises questions about DRM-protected downloads; even Walmart customers feel the pain.
June 08, 2009 by Julie Jacobson

If you purchase music or movies online, what happens if the vendor goes out of business? Will you have trouble accessing your content?

The question came up recently after HDGiants—provider of high-quality audio and video downloads—filed for Chapter 11. (The company hopes to emerge from bankruptcy this summer.)

A customer contacted us to say he couldn’t access his purchased content:

I have been trying to access media rights to my music library and cannot link to the MusicGiants server. I am using Windows Media Player like most. If you move your songs from one computer to another (not synchronizing) the music file is moved but must confirm the rights to it. When you try to play a file that has been “moved” or “copied” the computer automatically connects to the Internet and verifies your rights to play and/or copy the file.

I did find that the media rights are carried with the file when you burn a CD and use that to rip to the new computer. But then it counts as one of the limited times you are allowed to burn that file. If you sync the file, it also carries the media rights with it, but the sync is only one way. You can’t rip from a sync device, clear or overwrite.

This experience “would be odd,” according to HDGiants founder Scott Bahneman. “Our servers are up and running and the licensing servers are in place. Once people purchase our content they own it. They have control of it. It’s not like they’re accessing it from us.”

The HDGiants user now reports, “Suddenly the server is available. After constantly getting the ‘unavailable’ message, I just tried it and it worked!”

Perhaps this incident was just a fluke, but it still raises serious questions about downloaded content wrapped in digital rights management (DRM).

The Problem with DRM
Last year, when Walmart went to a DRM-free model, the company shut down its licensing servers, leaving customers unable to work with the protected content they purchased.

Walmart told its customers, “We strongly recommend that you back up your songs by burning them to a recordable audio CD. By backing up your songs, you will be able to access them from any personal computer.”

Still, at least users had that option.

Proprietary solutions like Vudu could keep content locked up forever. If Vudu goes away (which is not unfathomable), you may be at the mercy of the company’s hardware. Eventually the hard drive will fail.

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Julie Jacobson - Editor-at-large, CE Pro
Julie Jacobson is co-founder of EH Publishing and currently spends most of her time writing for CE Pro, mostly in the areas of home automation, networked A/V and the business of home systems integration. She majored in Economics at the University of Michigan, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. Julie is a washed-up Ultimate Frisbee player with the scars to prove it. Follow her on Twitter @juliejacobson.

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