Should the W3C, in turn, care about keeping Netflix happy? That seems like the relevant question to me.
The frustrating part is that my choice to be a law-abiding media consumer subscribing to a bunch of services makes me get a worse service in many ways than a pirate. I can’t use a player of my choice, i can’t have a single UI on top of all media, I can’t rely on content remaining available. Pirates don’t have these problems. The DRM legislation and media conglomerates power ensures that the market can’t fix itself. You can’t make a netflix competitor without DRM because you’ll never get access to licenses for popular culture products. Even had the W3C refused to deal, the situation wouldn’t be meaningfully better.
It's not like the next Netflix could legally start by just downloading the current Netflix. They'd have to go back to the media owners and negotiate their own contracts for it. At that point, anyone trying to compete with Netflix presumably winds up with the same contractual requirements from the media providers to use some sort of DRM.
From that perspective, the W3C adding web platform support for DRM surely enables more competitors than it stops, right? Now the startup engineering cost is to build or hire one EME-compatible DRM provider, you don't have to build proprietary apps for every platform, you can trust people's browsers to run your DRM as easily as Netflix's and quickly launch to every platform that has a supporting browser.
There's also still room left to compete with a DRM free product, assuming you find a way to negotiate media contracts without it, and figure out how to market that fact both to media companies and to users why that would be an advantage. From a web platform standpoint the work that goes into providing pleasant DRM experiences still floats some of the needs of DRM-free video playback, because browsers are going to engineer one on top of the other to save effort.
It furthers the whole concept of DRM, but as a standard open to any party, thus not really damaging competition on the scale of companies like Netflix, that if anything helps the next company to come along and wish to replicate the Netflix streaming experience, because Netflix "has" to share that baseline DRM standard with them (otherwise W3C wouldn't have endorsed it and browsers wouldn't support it).
Yes, DRM is used to abusively undermine the legal rights of users, but that doesn't stop competition for those users, and supposedly in a fair market the least abusive company you'd hope might be able to market a better value proposition. A DRM standard doesn't stop companies from being less abusive and using that as competitive leverage, even if it arguably furthers, or at least favors, the baseline amount of abusive behavior amongst that corporate ecosystem.
It damages (as the article states) the specific type of competition that is disruptive to the framing of Netflix-type business. I.e. there can be competition from a Netflix-clone but not from an innovative competitor who does something different building directly on Netflix in the way that Netflix themselves built directly on top of existing DVD markets to get started themselves.
Real innovation often involves this sort of non-clone, innovative, disruptive competition that doesn't just do something new but actually adapts the existing market in new ways. DRM certainly blocks a lot of that, and that is exactly what the DRM-advocates want to block and what EFF is talking about in stifling competition.
So too, the fact that you couldn't build a sharing service on top of Netflix has much more to do with the contract law and licensure of digital artifacts versus physical goods than anything at all to do with DRM. DRM is entirely orthogonal to the discussion. DVDs have DRM and that didn't prevent Netflix from building on top of them. What almost prevented Netflix from using DVDs was existing contract precedences with Blockbuster, but again that had much more to do with contract law than DRM.
DRM is a tool that is only as useful as law allows it to be, both for good and bad (how it gets regulated versus how it enforces legal structures). It does seem to me that many of the complaints about DRM are misdirected that there is no digital bill of rights and digital assets don't have regulations/protections that we take for granted for physical goods. Those problems remain even if W3C had blocked EME from becoming a standard.
The logical conclusion is that much of contract law is in the way of competition. But the point is that whether we think competition is good or bad or contract law should exist or not or be strict or whatever, the companies in this case are not following the Golden Rule.
Contracts were intended to block things like Cable TV or Netflix, but they came into existence by finding loopholes in those contracts. The argument is that their exploitation of the loopholes added real value, invented new services etc.
The arguments about competition here are anti-protectionist. They basically say that since we recognize that Netflix added value, we not only should be glad that they found the contract loopholes, we should probably eliminate all such protectionist contracts.
The argument about regulation in this case is that we don't necessarily need regulations to protect digital rights because it's trivial enough to technically enable them as long as we don't prohibit the rights legally. Take away the legal enforcement of DRM, and DRM becomes irrelevant for technical reasons. Thus, no digital bill of rights is needed.
It's not my argument (I'm not sure), but it's logically consistent.
In short: legal protection of DRM enables companies to have profit and power and avoid the threat from new types of companies, services, and innovation that would otherwise happen and would be in the public interest. The public isn't only interested in Netflix alternatives but in all the world of innovative developments that would be possible if we removed the protections of Netflix's business model (even if it doesn't protect Netflix as a player in that model).
Really short: it's about competition between types of businesses or between business models, not competition within a business model.
It's about cable competing with airwaves; about radio competing with live concerts; about books competing with priests, etc. not about competition between different books etc.
Which is why Netflix has around 200 native clients for all known hardware and platforms where DRM is implemented outside the web.
Why people think it’s reasonable to have apps for everything, but somehow Netflix is special and must run in a browser built on an open stack...
Now that is something I cannot fathom.
Install a goddamn app. Leave the web pure. Leave the web alone :(
But, now their originals are becoming a larger and larger part of what they provide, they've steadfastly stuck to having DRM on all their content (first and third party). So that prior argument kinda falls flat on its face.
Once you have streaming working with DRM on all devices you need a %@#$$@#$@ good reason to introduce DRM-free streaming. Netflix wouldn't want to discover that its own content plays with very low quality on, say, Panasonic TVs made between April and August 2016.
I wouldn't be at all surprised if some TV manufacturer broke some streaming variant (such as high-bitrate unencrypted smoothstreaming), discovered after a few months, and silently fixed it in new models without issuing an update for the old models.
EDIT: I wouldn't assume that TVs are better at playing DRM. Just from my experience, non-DRM works better (less code that might be buggy). What I'm saying is that once Netflix had a few hundred working devices that worked with DRM, avoiding player bugs became a really good reason to stay with DRM.
Everything on Netflix is DRMed, as far as the user is concerned. You cannot get a copy of the video file for offline playback. You cannot play the movie on a video player without the Netflix app. They remove stuff all the time and then you lose access. Hell, they even control the quality based on which browser you are using (only Edge can play 4k).
Netflix is in on it, plain and simple. They want to control your movie-watching. That's what earns them their monies. The only upside about Netflix original content is they don't put any kind of geographic lock on it.
I'm not sure where it gets stored, and it certainly isn't just an mp4 that can be used with my preferred player, but it does technically work.
Quite simply EFF had a weaker argument, even though there is a lot of sympathy for their cause from representatives in W3C, who also think US law is an arse, its simply not the correct forum for the battle.
That's not say that's a great argument, but the problem with making EME a battleground is that there is zero leverage over the content companies that insist on DRM, zero. Studios have the content people want to watch, if they can't watch it on the web they'll use proprietary apps. Technologists like to believe we shape the future, but browsers do not shape the content industry, rightsholders do. From their perspective, refusal to implement EME is damage they will route around, and they have the leverage to do it. Also note the inefficacy of DRM in general.
The place to win this battle is in congress. We need to move towards strengthening fair use and outlawing DRM, that's the only way to take the teeth out. The idea that the browser is an important battlefront is nonsense, EME is a sensible compromise that keeps the browser relevant. I respect the Stallman-esque view that the web should in no way be compromised but it's not a winning move in the long-term.