One of the biggest insider debates in the world of digital entertainment over the last couple of decades has been whether or not big content conglomerates should use what is called “Digital Rights Management,” or DRM, to protect their content.
The idea behind DRM is that it ensures anyone who uses a digital product, such as a movie or an album, has purchased the right to said product. In a way, it makes sense. After all, companies that invest billions of dollars in content rightly don’t want to see their content stolen and distributed on the Internet.
But DRM had a dark side. Not only did organizations like the Motion Picture Association of America go overboard and make consumers’ lives more painful by pushing to have DRM slapped on everything, but DRM also became a way to effectively hold consumers captive, reduce choice and hurt the overall consumer experience. Anyone who tried to make a copy of an HD movie DVD circa 2008 can attest to this.
Which brings us to the kitchen. With the modern kitchen becoming ever more digital, are appliance and food makers in danger of falling into the same trap?
Some already have. The first big digital kitchen “DRM” attempt was by Keurig in 2014 when they announced the Keurig 2.0 would require that consumers only use Keurig approved pods. This was an affront to anyone who values consumer choice. Not only did hackers create a workaround, but consumers responded and eventually forced Keurig to reverse their position.
Others like Juicero followed suit (and we know what happened to them, though they had bigger problems than their juice-pod DRM). The big lesson I think we’ve learned is that consumers resist being held captive in one product ecosystem.
Which brings us to this tweet from Jeremy Stretch (hat tip to my friend Stacey Higginbotham for bringing this tweet to my attention):
Do you know what this is? It’s the RFID reader @GEAppliancesPR put in my new $2000 refrigerator to force customers to buy their GE-branded filters at $50 every 6 months, instead of the identical $12 version from a 3rd party.
Calling Lowe’s today to return it. pic.twitter.com/jtCW0q4LSs
— Jeremy Stretch (@packetlife) June 18, 2018
Jeremy recently purchased a GE fridge and quickly noticed his $2k appliance had an RFID reader to verify whether or not he was using a GE-branded water filter. Because of this, he opted to return the fridge.
I understand the business case for requiring consumers to use a particular brand of filter. And, to be honest, I am much more likely to be accepting of a first-party water filter vs. being held captive to a premium food consumable. But, that doesn’t mean as a consumer I wouldn’t jump at the chance to use a third-party water filter.
Stepping back, however, it’s worth examining if appliance brands should use this technology to restrict consumer choice to a brand’s own products. In a way, RFID-enforced “DRM” can certainly help to accelerate a recurring revenue business like water filters or drink pods. On the other hand, consumers bristle when it comes to less choice.
And, perhaps even more importantly, these restrictive systems can also be shortsighted. Keurig owes some of its massive success to the availability of cheaper coffee pods; in early markets, the more choice, the better.
This is a lesson early connected kitchen startups like PicoBrew already recognize. While users of the Pico beer brewing appliance currently have to use a new PicoPak purchased from PicoBrew every time they make a batch of beer, the company is working on a beta for fill-your-own disposable pods and also has a reusable polycarbonate ingredient holder on its product development roadmap.
Others like Tovala (and the soon to ship Suvie), which offer food subscription services for their hardware, have wisely chosen not to restrict consumers to only using only their food “pods.”
As for GE, I have no doubt the company will continue to use RFID to enforce the use of their own water filters. And, because a water filter is something consumers only buy every 6-12 months, I don’t really think this will create the same type of anger that a food-consumable DRM would (i.e. Keurig 2.0).
That said, I would still encourage appliance makers to use DRM judiciously. While most consumers have been trained to use hardware DRM by the likes of home printers, they certainly don’t like it, which of course means they’ll eventually they’ll find away around it. If there is an option for a non-captive alternative for a consumable, many consumers will opt for that.
And if it’s a food consumable? Forget it. Not only have we seen the kind of anger something like Keurig’s DRM created, but brands should realize that they don’t need DRM to get consumers to buy first-party products. There is a significant percentage who will choose Keurig pods even if they are more expensive. In other words, there are always those consumers pay for convenience and are loyal to brands, at least if you treat them right. If you don’t, these consumers will stay away, and the overall market suffers.
Bottom line? Appliance makers would be wise to learn the lessons of past mistakes around using DRM and understand that by giving consumers more choice, there’s a much better chance of being rewarded in the marketplace.
This is one sure-fire way to annoy customers and slow adoption of digital appliances. I would suggest food and appliance makers keep things as open as possible, especially in the formative stage of this market.
Two words: Hell no.
A few more: Has this ever gone well for anyone? Media companies, printer manufacturers—even Keurig? Customers always find a way around it, so what’s the point? It annoys customers, creates bad will, and ultimately doesn’t have the desired effect of protecting a company’s IP. A better approach: license the IP for 3rd parties to manufacture consumables.
@richard – I agree completely. Especially if DRM “bricks my fridge”
Seriously – there is really no need for lock in on food. If Keurig couldn’t do it, I think that should be a warning for pretty much everyone.