Those of you who have been reading my blog for a while know that I’m not a fan of DRM. Perhaps it would be more accurate to say that I’m fine with managing digital copyright but I’m not thrilled with limitations placed on product use and sharing in DRM’s name and limiting paying customers’ use of a product under its aegis.
At the end of last week, Keurig reported earnings and at first, it seemed like it admitted that sales were down because customers didn’t like the restrictions on coffee pods in the Keurig 2.0 machine, released in time for the 2014 holiday season. The 2.0 machines did not have a use-your-own-coffee option as the previous Keurig machines did and customers were unhappy. Of course, there were those that hacked the new machines to accept any coffee pod, but the true, loyal and less-inclined-to-hack customers were hurt and angry and sales of the machine were down.
So, was it a win for the DRM protesters? Not so fast. This wonderful post by Jessamyn West analyzes Keurig’s earning report and statements around it. While it is true that Keurig did admit that sales were down and customers didn’t like the DRM, they believe that the customers simply haven’t been educated about the features of the 2.0 machine and were not aware how many compatible (if expensive) pods exist that are compatible with the 2.0. These are not necessarily made by Keurig, but by their “trusted partners” as well. Their one concession was to bring back the K-cup, which is the ability for customers to use their own coffee in the 2.0 machines. Even then, the new K-cup is protected by patent and won’t have cheaper, unofficial imitation until that patent expires. Her conclusion is “Be careful what you wish for. Keurig users get their My K-cup back but it will have DRM just like everything else that functions in a 2.0 Keurig coffee maker, a coffee maker that is not changing at all.”
As someone who prefers to brew my coffee without pods, and based on Ms West’s interpretation of the earnings call, I find Keurig’s approach akin to sticking one’s head deeper into the sand. Thanks to the glory of the internet, it’s not hard to get authentic customer feedback about products and Keurig customers weren’t shy in their many negative reviews of the 2.0 that specifically cite the DRM issue as a deterrent to sales. There’s no need to guess why they’re not buying the product. Yet Keurig still believes that it’s only about education. As I wrote in December, the more inventive owners of a Keurig 2.0 had already found a way (with scotch tape) to bypass the DRM, while the customers that weren’t willing to “hack” their machines ended up with limited options.
I tend to get upset with DRM when products that are “protected” with it cause loyal users the most harm, and by harm I mean that it severely limits the use of the product. Yet in most cases, the price doesn’t reflect that limitation.
The reason I find the Keurig case so interesting is that it provides some insight into the number around a DRMed product vs one without limitations where I don’t have numbers on paper vs digital cookbook sales. The bad news is that based on Keurig’s response, customers shouldn’t expect any abandonment of products with DRM any time soon.