On DRM and the Darknet

I just read an interesting paper written by some Microsoft engineers on the subject of the futures of darknets and illicit file sharing on the Internet.

Pretty interesting stuff:

…the darknet will be a competitor to legal commerce. From the point of view of economic theory, this has profound implications for business strategy: for example, increased security (e.g. stronger DRM systems) may act as a disincentive to legal commerce. Consider an MP3 file sold on a web site: this costs money, but the purchased object is as useful as a version acquired from the darknet. However, a securely DRM-wrapped song is strictly less attractive: although the industry is striving for flexible licensing rules, customers will be restricted in their actions if the system is to provide meaningful security.

It seems so obvious, yet…this paper was written several years ago.