Quite often the topic of DRM's come up, and I often take heat for having a pro-DRM solution. To clarify I would like to say that I think all current DRM solutions are horrendous. They are either intrusive on consumer rights/fair play, lock the user into one system (Apple), create security issues (Sony), or report activity back to a central tracking system (Music leasing systems). I find these options to all be unacceptable. But I also see the importance of DRM's to the digital market. It is for that reason that I figured I post this here, since I wind up posting about it decently often.
My solution would be a hardware integrated system, which means it would be best implemented with a new medium (ie: HD-DVD/Blu-ray, holo disks, what ever comes next). It would also have to be implemented in all new old media players also (so that a new CD player could play content with this DRM). The driver for the hardware would be closed source, but open standard, and the assemblies would have to be available on all industry standard processors (ie x86, arm, etc). The goal there is to make the 'black box' portion of the DRM as widely available and ubiquitous as possible. Proprietary systems from different vendors just screw users(like the Apple lock in). Since we are going for total solution that also means ensuring that the 'black box' MUST work with Linux, albeit as a closed source driver.
The key to me is loosely defining the boarder between legal activity, and illegal. I don't want the DRM to enforce the law, I just want the DRM to make it more cumbersome to break the law. To do this we need an identifier, likely for a person, family, or household. The DRM would allow you to bind your personal/family/household identifiers to the hardware. And by identifiers I just mean some easy to entry code, maybe like 5 digits 1-6 (so even basic car stereos can be easily set up). Now that you have all of your hardware entered with your keys, you can stick your DRM'd content into it. The content, if marked as being just sold, updates it's acceptable key's with those that are on the hardware. You now have a piece of DRM'd content that is associated with all of your gear. You can burn it to CD, copy it, put it on the internet, what ever, but it will have that association to your gear. (Notice that the 5 digit identifier is not going to be an absolute unique identifier, so no one can 'track back' from the internet who gave who what)
But then comes the question about loaning media to a friend? Sure, pop the media in to your player of choice, if the content's key is not listed on the hardware, it just prompts you for it. That way, you can borrow all of your friends music, but mass distribution is significantly less likely because everyone would have to keep lists of their downloaded content and what identifier goes with each piece.
There are a few things that I don't have figured out, like what if you want to resell a piece of content? Do you need to content the original copyright holder to get the key reset? and what's preventing every user in the world from using 55555 as their household key? But if those issues could be figured out, you would have a system that reduces (not prevents!) casual piracy, and doesn't effect the user's rights under fair use.