The big media companies should have known from the beginning that Digital Rights Management would never work. The complexities and hurdles of such an idea, both technical and social, are just too vast. Most likely, the technical people tried to tell the management that this was a bad/non-sustainable idea, the management people said "Do it, or you're fired," and the technical people reluctantly began working on a project that was already doomed to fail.
Basically, the media companies claim that DRM is necessary to keep people from making unauthorized/unpaid for copies of their property in order for them to maintain steady revenue streams. However, the issue with DRM is that in order for it to work, they need to not only control the content, they also need to control the hardware, such as computers, televisions, and phones. This is beyond the reach of any one company.
For an example, let's take the download of a music file with DRM from Apple's iTunes. In order to download this song, you need to, of course, have iTunes. So far, Apple is in control of all of the software and content here. If you download the song to your computer, and do nothing but copy it over to your iPod (also from Apple) to listen to with your headphones, then the chain of protection is preserved, as Apple controls the hardware also. But what if you want to play it on your computer? Or hook your iPod up to speakers? This is where DRM will fail, because Apple doesn't have control of all aspects of your hardware, even if your computer is a Mac.
The reason is that the audio needs to be processed and delivered as a standard audio stream which can be recognized by the huge variety of speaker systems available. Once the content leaves the control of your hardware in the form that users want it, you have lost all control. All someone has to do now is hook a recording device up to the speaker output of the computer or iPod, and you have wasted millions of dollars on something my seventeen-year-old sister could work around. In order for this to be successful, you would have to establish a proprietary protocol which encrypted the audio stream so that it could only be interpreted by hardware which licensed your technology, and you would have to get all of the speaker companies on board with this. This would never happen, as the speaker companies have no reason to pay you to license this technology because no one else will be using it. Even if you gave it to them for free, they still wouldn't do it because people aren't going to buy them.
Even if you happened to manage to get the speaker companies to lose money doing such a silly thing, this would not stop dedicated pirates. All they have to do is record what is played by the speakers/television. Sure, it's not going to be the same quality, but pirates will take a sub-par product for free over your high-quality version which costs money. The thing is, if they're not paying for it now, they will never pay for it. There are songs in our music library that I listen to because my wife purchased them. Would I have purchased them myself? Probably not, but I like them enough to listen to them for free. This is the mindset of a lot of the casual music and movie pirates out there.
The impossibility of DRM (or, rather, the improbability of getting all tech companies on board with it) is the primary reason that it is failing, but there are several secondary reasons which have accelerated this downfall. In late 2005, Sony BMG released CDs with DRM that, when placed in your computer, would install a rootkit without telling you. This is not only morally wrong in and of itself, but this rootkit was so insecure that if it was on your machine, a hacker could get access to your machine.
Another problem with DRM that is speeding its demise is that it is preventing users from exercising their fair-use rights. Users are no longer able to easily create backups of their music or movies in case it becomes corrupted. Even libraries are unable to loan material with DRM for extended periods of time. DRM is so broken that it is astounding it has even lasted this long.
Well, maybe not. You see, the entertainment industry lobbied Congress to do something to save their "failing" businesses, and we were graced with the Digital Millennium Copyright Act. This law criminalizes the act of circumventing DRM, even if it's so you can exercise your fair use rights. Both DRM and the DMCA have been a constant controversy since they were introduced, and the people are lucky to have groups like the Electronic Frontier Foundation looking out for their rights in this age of technology and society's dependence thereon.
It's not all bad news, though. As I said, DRM is failing. As I write this, companies like EMI, Universal, and now even Sony are offering music free of DRM. Now if only we could get the media companies to ditch the DRM-heavy Blu-ray format. Unfortunately, that looks like it's going to be a longer battle.
Random Parting Thought:
I hate the eight hour work day. I think the ideal work day should be six hours. Someone make this happen.