The news broke last week that Green Mountain Coffee aims to use some sort of DRM-esque authentication system to prevent non-Keurig cups from working in the new Keurig 2.0. Wired delivered what is perhaps the most hyperbolic reaction in saying that the company may “gut the Internet of things.” In actuality, things are likely to be a lot less dramatic.
First, let us look at why Green Mountain Coffee wants to add the authentication system to their coffee pods. The long and the short of it is to lock their loyal customers into buying their pods and only their pods. For the vast majority of non-tech savvy consumers, this will work. For consumers this is a catch 22. On the one hand, they are somewhat limited in choice, on the other, Green Mountain Coffee can afford to make less money on their machine because they will make more money on the coffee. You will probably get a better machine out of it, but in the long run you will be nickel and dimed into spending a lot more money. It is not about delivering a better experience to customers, it is all about making the bottom line.
The concern in this is that Green Mountain Coffee will take to the courts to defend their “intellectual property (IP).” If they pursue things in the courts, I am guessing that the IP in question will be the authentication system rather than the coffee itself – which will raise some slippery arguments. Green Mountain Coffee will no doubt try to make it difficult for anyone who tries to sell non-authentic pre-loaded pods Stateside and so – for the most part – their little scheme will work. It will not take long, however, for the folks in Shenzen to reverse engineer the authentication system. I remember the first time that I laid eyes on a chipped PlayStation. For the less adventurous, how long before we see a reloadable pod? It will probably only take a few weeks.
Will a DRM-equipped coffee maker destroy the Internet of things? The Keurig is an incredibly popular coffee machine, of that their is no question. There are, however, plenty of comparable products on the market – and there are vastly superior options for those who are prepared to spend a little more money. If the competition follows suit, how long before we see “open” alternatives popping up on Kickstarter?
The hyperbolic reactions to what Green Mountain Coffee has done are understandable – but we live in interesting times. The pessimistic viewpoint is that the Keurig 2.0 will spark something of a chain reaction, causing other manufacturers to follow suit. That suggests that people who own a Keurig are tied to the brand. I would argue that they are not. Does a Keurig make a better cup of coffee than a Nespresso, Mr. Coffee, or the Starbucks equivalent? Some would say yes, but I would argue that it is like comparing McDonald’s to Burger King – one might taste slightly better but none of them are very good. They produce a reasonably good cup of coffee and they are relatively cheap, but the coffee pods are overpriced and, dare I say it, bad for the planet. You can take home a pod machine for around $60-100 – they are a bargain.
The thing is that people these days are a lot more coffee savvy – and there are plenty of other options around. At work, I use an inexpensive conical burr grinder (it cost me $40) and a French Press. Occasionally, I will make pour over coffee, or fire up the Aeropress. These machines all involve a bit of clean-up, but not a lot. In the mornings at home, I tend to be a little pressed for time, so my all-in-one Saeco Odea Giro ($400-800 – look around) does the heavy lifting. It warms up in a couple of minutes grinds whatever beans I load and fires out a shot of pretty-good espresso at the push of a button. If you prefer pour-over to espresso then there are much cheaper all-in-ones around, there is a Cuisineart 12-cup Grind-n-brew on Amazon for a mere $85. What I am trying to get to is that there are reasonably-priced options out there that are as or more convenient than a Keurig – which will make a very decent cup of coffee. If Green Mountain Coffee pushes ahead with authentication, customers will probably start to head in other directions.
In the long run, Green Mountain Coffee is probably shooting itself in the foot on this one. Adding DRM to machinery might help them shore up their coffee sales, but it will be at the expense of machine sales. Without DRM, the Keurig 2.0 could have been huge – now it will probably be a huge disappointment, given that the consumer backlash is already well underway. As I see it, Green Mountain Coffee has a couple of options: A) they can spend up big on advertising to bamboozle uninformed customers into buying a DRM-crippled machine and on legal representation to vigorously defend their intellectual property rights; or B) they can keep their machine open and affordable and let it sell itself. One way undermines customer goodwill, the other way builds it.
For the rest of us, to ensure that this stupidity is not repeated in the future, all people have to do is not buy the Keurig 2.0. It really is as simple as that.